The prospects of one of the largest and most advanced airports in Kerala coming up at Kannur, is going to change, not just the economy of Kannur or Northern Malabar, but possibly the entire economy of Kerala.
It's a relatively virgin economy with extraordinary possibilities in general tourism, health tourism, industrialisation, agriculture, education and service industries.
But the key agent that could trigger this change is that, some of the richest NRI businessmen hail from this region. That means investment in terms of NRI funds or even heavy FDI Investment (thru Arab investors) is high possibility. Next major trigger is the present Govt has a significant number of ministers who are from this region and they are politically interested in its development. This means North Malabar is going to be more peaceful and attractive to investors, promoters, entrepreneurs and employees.
The North Malabar Chamber of Commerce did a great job, in creating awareness thru it's "Invest In North Malabar" function at Marriott Kochi. Now they have to organise a series of events that creates not only awareness, but also opportunity for small, medium, large and extraordinarily large projects to meet and get investors.
This can be through series of seminars and project exhibitions across GCC countries as well as across Malabar.
A series of educative workshops are to be conducted across North Malabar, to educate startups, promoters and entrepreneurs to tap this opportunity.
A series of educative workshops across GCC is needed to educate NRI investors on how to invest in groups, have diversified portfolios, select the right investment and the ethical-practical investment habits and attitudes they need to have.
The chamber should also act as an information point, where potential promoters or investors can get statistical data, information about legal procedures, documentations, list of various service providers, etc.
Lots to be done. It's going to be fun.
Business Insights by Ameen Ahsan @
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Managing NRI Investment Plans
Almost all NRIs wish to save enough to invest in their home country, but for various reasons cant do it well. Because investing in Kerala is not an easy decision nor process. So it is always better to invest as groups.
So how to do it?
NRI Associations can play a major role. Presently they are usually involved in lots of charity activities but they must focus more on the future and benefits of its members first. They should take the initiation to facilitate group investment programs. Because many things that a working person cannot do, can be done by an association or a group of people.
Traditionally, NRI groups opt for land investment. This is not a perfect strategy. Instead they should divide their group investment into 4 categories,
1. Fast Return Investments
2. Asset based Investments
3. Technology Startup Investment
4. Social Ventures Investments
Fast Return Investments are investments into presently running successful businesses. These are businesses that is presently in operation and doing well, but need funds for expansion, diversification, brand development, or mechanisation etc. Joining these businesses avoids the risk of startup failures, unproven business models etc. The investment group, should ensure they select the best company, and should ensure they are represented in the board, and that the business updates are on time. Select only those businesses that run professionally and have a good reputation.
Asset Based Investments are the businesses that are real estate based or have a significant part as investment into land or construction. And not just buying of land and selling. These businesses usually take 1 to 2 years to complete land buying, finalise architectural drawings and getting Govt permissions. Then another 3 to 5 years to complete construction. Then another 1 or 2 years to realise full rental capacity. That is by the time decent revenue comes it takes about 5 to 9 years! But unlike the Fast Return Investments, these have solid value and is safer though not very liquid. And once on-track the failure chances are low.
Technology Startup Investment is a high risk and high profit modern investment opportunity. It is about investing into startups that have a great potential. Few lakhs invested today can have a valuation of several crores in few years, sometimes even if the business is not making profit. The key is to find great ideas with great people. Its an investment we should not ignore.
Social Ventures Investments are businesses or ventures that if successful can reap extra ordinary results either as profits or social benefits, like agriculture, education etc. Why this investment? Because these investments helps the overall community to be more educated, healthy , safe or helps the economy in creating more quality jobs, security etc. This boosts the economy in general supporting our other investments to group. It's like charity, except that it's result oriented.
Investment groups should make portfolios to invest in all these. They should educate the investors into the art and ethics of investing. Investors should be taught not to expect high return on investment, but accept that having low investment return expectations like 5%p.a gives them a wide choice of investment opportunities, and over a period of time (by the time they retire) these businesses would have grown into a large tree of great value, high return and market value. Today no business tastes good to investors as they are expecting returns as high as 20-25% or more in first year itself.
Groups should focus on investing for future not to reap returns for today. This patience from investors is vital for them to win. Being greedy or oversmart, is not a smart move.
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Hospitality is the business of entertaining guests and visitors. It is a business that involves selling accomodations like hotels or hotel apartments (of different stars ranging from 1 star to 5 star or beyond), or food serving services (like restaurants, bakeries, pasteries etc) or entertainment (like event halls etc). Many a times it comes in combinations. Today the hospitality business model is so complex that you might want to include shopping malls and business parks as well into this sector!
In a beautiful state like Kerala, there is, no doubt, scope for hospitality from Kasargode in the north to Trivandrum in the south. In fact every district in Kerala has scope for hospitality. But what kind of hotels, restaurants, events actually work out in the place where you wish to start, is a totally challenging question. It needs to be planned properly. It should begin with a business model and a feasibility study.
First you have to understand, not all hospitality business will be successful everywhere, you have to customize it. Targeting everybody, as your potential customer, is a recipe to failure.
You may either have your own land or you may be planning to buy one.
If you already have a land, then assess the amount of capital that you can invest (alone or as a group into that project). Based on the possible capital, you can decide if it’s a restaurant or a hotel or a star hotel that you wish to start. It is to be noted that, its not just about capital. Its also about your passion. That also has to be factored in.
Then do the market feasibility. The market feasibility study should be aimed at studying the competitors (that is how many are there, what do they all provide in general, what do they provide individually that makes them different from others, how much do they charge, how are customers responding to them, etc). Once you know the competitors, you know their strenght and weakness. Their weakness is the gap that you have to fill, if it is a profitable gap.
Now study the customers. This is a difficult part, as customers are scattered across the place and they will never really tell you what they want. Since doing a survey is an expensive and not so effective method of knowing the customers, the most practical option is to use your business acumen to decide what the customers might be lacking. This is a tricky part, and you need lot of business experience to do this. Because if your assumption is wrong, you are starting a business that nobody wants. If you get it right, your business will succeed. One way to hack this, or to improve your acumen is to attend seminars, conventions, journals and read industry books related to your area and industry. If it is available. Or engage professional consultants to do it.
Now once you have studied the location, its strategic importance and potential, the competitors (strenght and weakness) and the possible gaps that needs to be filled for the customers, your market feasibility study is ready.
Then you can develop a business model to it. That is design your business model to target a specific group of customers, customize solutions/services for them that make them happy. Set your business wholy to achieve this target.
But you are still not ready to go. You need to know if your selected target customers, the expected business volume, is profitable. That’s why you should prepare the financial feasibility study.
The financial feasibility study, should assess the capital required to set the business up and running. It should assess the operation cost components, the variable and fixed costs involved, tax matters etc and based on all these prepare the projected balance sheets, profit loss projections and cash flow projections for 5, 10 or 15 years or more (depending on the nature of the project). Then evaluate the ratios to know if the profit meets your Return on Investment expectation.
Financial consultants, who usually prepared financial feasibility studies make a mistake of preparing projections without knowing the business model. Knowing the business model affects the cost and revenue inputs in a projection. It is very crucial. In preparing financial reports, understanding the business to the minute level is important.
Once the market and financial feasibility studies are done, you will know if you should proceed with the project or not. If its positive, you should move to the next step of drafting your “Strategy Report”, that is a report that will list how you are going to achieve your ideal business model.It will involve your Branding, Marketing, HR, Investor Management, Operations, MIS etc strategies, budgets and action plan.
If you have the time, expertise and knowledge to do all these tasks, then you are good to go. But if you don’t have the time, expertise or knowledge, then you should engage experts who have experience to bring you a good study report.
At Ameen Ahsan Strategy Consulting (AASC), we are experienced in preparing feasibility studies, project reports, strategy reports, business model development and general business consulting for businesses that aspire to grow. AASC has worked on several project studies across Kerala over the last few years.
Biscuit has become a very important part of our life. And as the population grows, the demand for biscuits is bound to increase as part of everyday morning and evening snacks. For those interested in food industry this is a good industry to be in. The biscuits can be sold as a commodity, without much branding and as a branded product. The approximate investment as per NIIR (www.niir.org), is Rs 8 crores, with an expected return of 52% and a break even at 45.55%, for a production capacity of 30 tonnes/ day
The above figures by NIIR are approximations, and will be different as we customize to your land cost, the capacity you really plan, the extend of branding and marketing investment you make, and a host of other factors that affect your business model.
If you are interested in this industry you have to do the following essentials;
1. Study the competitors to find the gaps (unmet demands) that you can cover (market study)
2. Study the exact product category that you will fill in (product study)
3. Study the HR requirements, the operating processes and the cost of operations (operation plan)
4. Study the fixed investments that you have to make (land, machineries, patents etc)
5. Study the legal requirements, licenses and procedures
6. Study the industrial zones available, and evaluate if which zone is better (location plan)
7. Study all the processes that you can outsource
8. Study all the 3rd parties with whom you can establish business partnerships
9. Study how you can brand, market and sell your product
10. Design a business model that will make you different from your competitors (business model)
11. Workout the financial viability of the project (is it really worth it for you to start)
12. Work out the risk analysis and what are the risks involved and can you handle it (risk analysis)
13. Work out how much capital should you get from others and how you will do it (investment plan)
Do you have any experiences (good or bad) or concerns/opinions regarding this industry? If so please share with us.
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If you are interested in starting your own “Biscuit Factory” we can prepare the customized, actionable project reports, feasibility studies and business plans for you to have it right. You may contact us at email@example.com or call +91-9995-900-800
If you already running a business and wants to develop it to the next level, you can avail our Business Consulting support. Know more at
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With an approximate capital that can range from 30 crores plus, and an estimated return of 31% and break even at 38%. This can be an opportunity.Source: NIIR
The actual capital (returns and Break even) will change based on the capacity of the manchinery, cost of land and branding, marketing and other operational strategy. The above figure is just an approximation
At AASC, we prepare customized feasibility studies, projects reports, strategy reports and business plan presentations for projects in Kerala.
To know more about us, please visit www.ameenahsan.com
1. Land: Location, Location, Location is everything!
· Make sure the land is easy accessible, ideally on the main road
· Is not too far away from the nearby city
· Has enough “own” parking facility
· Does not create traffic congestion
2. Market: Is your market ready for a mall? The construction cost and maintenance cost of a mall is higher than a normal shopping complex. So this means, you will have to charge a higher rent from tenants, and hence tenants will charge a higher margin from the customers. So is the market ready to pay higher for a “Mall” shopping experience? So take time, to interview the tenants and land owners in that location, and know the market pulse
3. Customer Segment: Who should be your visitors? Nobody likes something that is built for everybody. People have varied tastes and preferences, and these people can be categorized like high income/middle income/ low income, Educated class/professional class / uneducated class, Teenagers/Youth/ Matured etc. If you target a specific class, you can have a tenancy mix that answers the need of that specific class, you can bring in facilities, themes and features that appeals them
4. ‘Something Different” Factor: What will call as the USP or Unique Selling Preposition? Why should tenants or shoppers come to tour property when it offers the same as other commercial premises? A solid “difference” in the form of a theme, special amenities, facilities will help you attract the your customer segment of choice
5. Case Studies: Learn from those who started before you. Visit leading successful and failing malls and study what works in them and what does not. You can avoid the costly mistakes they did and copy the good things they did, or come up with a totally new idea!
6. Research: Visit other malls are not enough. You have to know the technical aspects about planning footfalls, the tenancy mix, the industry best practices etc. For these you have to read relevant books, online resources etc.
7. Finalize your idea of the Mall: Finalize what theme it will be, how much square feet area you plan to build and sell/rent, the common facilities and amenities to be provided, etc.
8. Branding your mall: The investment needed to develop a mall is not limited to the construction cost. It is only the major component, but there are many other important components as well like branding, marketing and sales expenditure. You can decide, how you will be doing it, identify the cost of doing it and set it as the budget for the same
9. Operation & HR Expenses: Unlike shopping complexes or normal commercial buildings, a mall has to be managed 24/7. It should have a promotion team, administration team, security, cleaning and maintenance team. You have to calculate how many staff are required, how much should you pay them, when you should recruit them, how you should treat them etc. All this goes to your operational budget
10. IT & Technology Plan: Is your mall going to be high tech? Is the administration going to be fully computerized? Will the mall use technology for security monitoring? Will there be more technological usage? Get the costing and add these to a respective budget.
11. Investors: Do you have the funds to invest? Or do you need investors? If so, how much should they invest? What returns on investment will they expect? What break even period will be ideal for them? How do you attract the investors? What tools are required to attract them? How do you manage the investors so that I get to keep control over the business? How do you manage the investors when there is a dispute?
12. Financial Plan: Once all the budgets are ready, you should do a financial feasibility analysis in various scenarios. This will be based on the revenue and cost you have created. The projections will show the projected balance sheet (your assets and liabilities, in future), profit and loss statement, cash flow statement and ratios (stating the pay back periods, ROI and break even points), in each scenario.
13. Rework the business model: If the financial projection (ROI, Pay Back Period and Break Even) are not meeting your expectations, then you have to make changes to each of your planning (reducing your budget accordingly), until your financial plan is more acceptable. But it should not be unrealistic. It should not be based on making unrealistic assumptions to please oneself or the investors.
14. Selecting the architect: The architect should come only at this stage. At this stage, the total capital is finalized, the budget set aside for the mall construction is finalized, and the specific theme, amenities, facilities and features required are all well documented. This requirement should be given to the Architect. The architect’s duty should be to build an aesthetically beautiful mall, complying with legal and safety requirements, within the budget and meeting the full requirements of the client. At present, since the most clients do not know, how their malls should be, authorize the architects to do all the above steps. And since architects are not specialists in the mall business model, design based on their limited knowledge. Besides, they allocate a more than required capital for the construction itself, which will seriously affect the financial viability of the mall.
15. Start Branding Early: As soon as the construction starts, start branding works. Branding is the process of creating a desired impression in the minds of the people. The more people like your branding, the more they will be looking forward to take spaces at your mall or shop at your mall
16. Hunt for right tenants: Unlike shopping complexes, the tenant mix is important in a shopping mall. The more brands, the better. And it’s not wise to sit idle and wait for them to come. Instead, hunt for the ideal brands to setup at your mall. Market to them very early. So that they have enough time to plan fund and resource allocation in advance.
17. Inauguration with a bang! A Mall is often the pride of a city. So the whole town should know about it. Also when hundreds of people flow in, the mall should have all its shops open for business. A mall that is not fully functional is not something shoppers like to see.
18. Professional management: Unlike shopping complexes, a mall has to be managed that too professionally. There should be regular events to bring the crowd in, the security should be good, the mall should always be clean and tidy, the maintenance should always be preemptive.
Building a shopping mall is an exciting journey, and so are the rewards. Mall does not come with just higher rental income. It comes with higher land appreciation (it appreciates the entire locality). It brings a strong brand image to its promoters (as a mall is a local landmark).
So if you can do all the 18 steps, then you are fit to go and start one. If not, engage a strategy consultant do those work for you, representing your interests. At AASC, we are ready to serve you at each of the 18 steps.