Rahul, determined to cultivate a resilient mindset for success, now delves into the realm of business. Recognizing that business is about solving problems, he embraces the idea that the magnitude of the problem solved correlates with financial success. From shoe polishing to aircraft sales, every problem presents an opportunity for earning.
In the pursuit of financial growth, Rahul faces a challenge—limited funds and a household with minimal investments. The conventional advice of starting a Systematic Investment Plan (SIP) over 40 years doesn’t align with Rahul’s need for rapid progress. He contemplates job opportunities but hasn’t landed one yet, prompting a search for alternative avenues.
Enter the concept of starting small—a notion that Rahul grasps with a keen understanding of the business mindset. In his exploration, he encounters a friend running a momo stall. Although this may seem inconspicuous in the pursuit of financial transformation, Rahul discerns the essence of the business mindset.
Curious, Rahul engages his friend in conversation, probing for insights. The friend reveals that setting up a momo stall requires an investment of Rs. 20,000 to Rs. 25,000, offering a glimpse into the world of small-scale entrepreneurship. The key revelation lies in the simplicity and profitability of the venture; the friend consistently earns Rs. 20,000 to Rs. 25,000 monthly, with occasional spikes to Rs. 40,000.
However, Rahul, ever the strategic thinker, assesses the situation critically. He questions the choice of location, suggesting that setting up the stall near a university or corporate building could amplify profits. His friend acknowledges the potential but cites the challenge of finding a suitable spot.
Rahul’s discernment extends beyond the surface of momo sales. He contemplates the fluctuating profit margins and envisions optimizing the business for greater financial gains. This seemingly mundane momo stall becomes a canvas for Rahul’s budding business acumen.
Rahul’s journey into the world of entrepreneurship takes a strategic turn as he contemplates the staffing aspect of his momo stalls. Armed with a newfound business mindset, he realizes the need for additional hands to ensure the smooth functioning of the business. Returning to his friend, Rahul learns that the stall operates from 5 pm to 10 pm—a five-hour window.
Analyzing the potential of hiring someone for the job, Rahul gauges that a friend could be enlisted for Rs. 10,000 a month. Delving into his savings, Rahul accumulates around Rs. 70,000 to Rs. 80,000, but hesitates to risk the entire sum on a single stall. A strategic decision emerges—Rahul opts to set up two stalls, doubling the initial investment to Rs. 40,000 to Rs. 45,000.
With a keen eye on cost management, Rahul enlists two of his friends to man the stalls, offering them Rs. 10,000 each from the anticipated monthly profit. This leaves Rahul with a surplus of Rs. 15,000 per stall after accounting for the labor cost. While Rahul refrains from personally working in the stalls, his strategic thinking propels the business forward.
Expanding his venture, Rahul reinvests his earnings into opening more stalls. With each new addition, he hires additional friends to manage the increasing workload. The compounding effect of this approach becomes evident as the profits multiply with each added stall.
In a calculated progression, Rahul transitions from a single momo stall to a burgeoning empire of ten stalls. Reflecting on the earlier scenario where one stall yielded a profit of Rs. 15,000, the cumulative profit from the ten stalls now becomes a substantial sum. Rahul’s foresight, coupled with strategic hiring and reinvestment, transforms his modest beginning into a thriving business empire.
In the journey of entrepreneurship, Rahul’s success with 10 stalls and a profit of 1.5 lakhs highlights the potential for growth. However, the key lies in transcending the individual effort and adopting a business mindset focused on multiplication.
Rahul’s choice to avoid stagnation by not merely working but getting work done underscores a crucial distinction. The blog emphasizes the prevalent middle-class mindset that often leads individuals to start small businesses independently. The risk arises when others emulate the success, saturating the market and diminishing opportunities.
The core message centers on cultivating a business mindset that envisions expansion and scalability. The analogy of starting with a single stall and envisioning a network of 100 stalls or multiple factories underscores the importance of multiplication. The narrative shifts from personal effort to creating a system that can function independently.
The blog delves into the intricacies of business operations, citing examples like ice cream scoops and momo plates, where standardization and systematization are crucial. It encourages entrepreneurs to think beyond the initial venture, contemplating how a brand name can lead to franchising and the establishment of a business empire.
The concept of asking, “How can this be done without me?” serves as a pivotal statement. It prompts individuals to transcend the role of a sole proprietor and envision a self-sustaining system. The narrative deliberately moves slowly, ensuring accessibility even to those with minimal educational background.
The blog concludes by stressing that the size of the work doesn’t matter; what counts is the mindset. Whether it’s starting an institute or a momo stall, the key lies in thinking about multiplication and expansion. The ultimate goal is to create a brand that can be leveraged for further growth and opportunities.
In the realm of business and entrepreneurship, the key to sustainable success lies not just in individual effort but in the ability to create a system that can thrive independently. It’s a paradigm shift from the common belief that one’s presence is indispensable. The essence lies in asking, “How can it happen without me?” This fundamental question serves as the catalyst for exponential growth.
Consider a humble momos stall owner, tirelessly earning 15,000 rupees. No matter how hard he works, he can only do so much – perhaps 30,000 with extraordinary effort. Yet, the transformative moment occurs when the focus shifts from addition to multiplication. If that momos entrepreneur opens ten stalls, the earning potential skyrockets. The same principle applies to a person running a ladies’ suit shop; expertise in one shop might yield 1 lakh rupees, but replicating that success across ten shops brings the prospect of earning 10 lakhs.
Embracing a business mindset involves understanding the power of multiplication. While the risk of expanding may seem daunting, it pales in comparison to the potential rewards. The journey towards becoming a powerhouse in the business world begins with realizing that success should not be confined to individual efforts but must transcend into a scalable model.
In the context of India’s economic landscape, there exists a profound gap between the rich and the poor. The rich, with substantial capital at their disposal, invest in businesses with the potential for exponential growth. This stands in stark contrast to the middle class or the poor, constrained by limited financial resources. The disparity is such that a wealthy individual can effortlessly afford a night in a 5-star hotel, while someone earning a modest salary finds it a significant financial burden.
The crux of this distinction lies in the ability to think beyond personal contributions. A rich entrepreneur, armed with a capital of 50 crores, invests strategically in ventures that multiply returns. This approach signifies a departure from the linear growth seen in traditional employment scenarios. A person in a job may experience incremental salary increases, but a business-minded individual opens the door to exponential wealth creation.
In the vast expanse of India, a multitude of individuals wield a capital of 50 crores, emblematic of a thriving entrepreneurial spirit. Consider the perspective of a builder engaged in the real estate business. This astute entrepreneur embarks on the creation of five sites, each with an investment of 10 crores, anticipating a 30% profit margin. Over a span of 2 to 2.5 years, these properties are sold, generating a substantial profit of 15 crores. The remarkable aspect is not just the initial success but the relentless pursuit of multiplication.
Within two years, the initial capital of 50 crores burgeons into 65 crores, a commendable achievement. However, the true essence of the business mindset lies in continuous expansion. Instead of resting on laurels, this entrepreneur reinvests the earnings to develop another site, repeating the cycle of growth. This iterative process transforms five sites into ten, maintaining the same profit percentage but compounding the overall returns.
The profitability is not solely reliant on the percentage; it’s the exponential power of compounding. A 30% return, when applied to an increasing capital base, propels the entrepreneur into a trajectory of rapid wealth accumulation. The Rule of 72 serves as a beacon, elucidating how swiftly money doubles with a given yearly return. In the span of 12 years, this visionary entrepreneur, starting with 50 crores, catapults into a staggering 1600 crores.
This thought experiment underscores the stark contrast between the trajectories of the rich and the middle class. While the middle class meticulously saves, the wealthy engage in strategic investments that leverage the power of compounding. The crux of the matter is not merely the attainment of wealth but the willingness to push beyond perceived limits. The journey from 1 crore to 16 crores may seem daunting, but it’s the same principle that applies to the earlier stages of financial growth.