Entrepreneurship

Stories

1. MADHUCHANDA TRAVELS
Neelima Dhumakhe

The Entrepreneur
Neelimas parents were teachers in the Zila Parishad school in Satara district. Despite the strained economic situation, she was encouraged to pursue on her college education in Kolhapur and complete her B.Com degree. She recalls her first travel by rail to Mumbai with her husband who had secured a job with Reserve Bank of India. The couple set up house in the distant Mumbai suburbs of Dombivli. Neelima recalls the great difference in the social environment, pre and post marriage. Mr.Dhumakhe had a varied friends circle and knew people in different walks of life, from stage performers to business types. He was very fond of traveling, collecting information and discussing with people. As he involved me, I too started taking interest, which encouraged him further to socialize me. With marriage, Neelima moved up from a lower income to middle income household.

The Opportunity
Neelima remembers her first trip as a tourist, in 1981, the year of her marriage and setting up house in Dombivli. The Dhumakhes visited Kashmir and experienced a very enjoyable trip that set her husband thinking. Dhumakhe observed that, like themselves many middle class Maharashtrians in Dombivli were inclined to spend too, not merely save, They seemed keen to see the countrys tourist and spiritual spots. However, the impediment in Dombivli was the so near yet so far factor-very near to Mumbai to get bitten by the travel bug but very far from a reliable, friendly travel agent who could be approached to make the desire to see the world a reality. In the early 80s, there were no travel agents in Dombivli, This was the opportunity that struck Mr.Dhumakhe. The need was emerging but the need fulfilling mechanism was missing. Besides, for the typical Dombivli social circle of the Dhumakhes the travel agents of Mumbai proper were too smart to be of comfort to them. Spotting the opportunity window, Mr.Dhumakhe discussed the business idea with Neelima and obtained her consent to start the venture. Thus was born Madhuchanda Travels.

Start Up Challenges
As with most mom-and-pop start ups, Madhuchanda Travels began operations from home. The customer segment was the marathi mandal drawn from the middle class society of which the Dhumakhes were part of. With assistance from her husband Neelima developed the basic props of the businessthe bus operators and the budget hotels in the tourist destinations. For the launch of the service she conceptualized the Ashthavinayak tour and tours for school children. As for the market, she tapped the couples network of friends, drawing upon the social credibility of the couple. Recalls Neelima, I began as someone pushed into a pool-organising a tour to Kulu Manali for which I had to book 2 buses. The tour was a hit and I did not look back.. Neelima hesitantly took up the role of supervisor-cum-escort for these 10 to 15 day trips. The price for the first 12 day tour was Rs.3000 per head without food. Madhuchanda Travels was run from home for the first decade, offering one trip at a time.

Start Up Challenges contd.

As business grew, they felt the need to move into an office which they obtained through a contact of Mr.Dhumakhe who was involved in the construction business. Getting the place meant investing whatever resources they possessed. Madhuchana Travels opened office on 9th Jan,1990. By 1991, the venture took shape as a proper business with an office and reservations and commitment for cash credit facility of Rs.1 lakh from Bank of Maharashtra. The business needs cash for advance payments to hotels ,bus operators. Madhuchanda Travels logged revenues of Rs.1.25 lakhs in the first year with a start up bank loan of Rs.25,000 It was the first office to promote tourism in Dombivli, a milestone that is recorded. Subsequently they moved to their current larger premise in 2001. Neelima says that right from inception , she was clear on the value proposition : budget tours offering comfort and community, delivering more than promised. This meant, as Melinda learned from experience, being prepared for the unscheduled breakdowns and overextended hotel bookings and the occasional raucus, tourist group. Right from the beginning, Neelima accompanied the tourist groups thus picking up the skills of crisis management by doing, with back up support from her husband. If the bus broke down and the operator failed to provide back up as happened on occasions, alternate arrangements would be made to save face with the customers and ensure that they were not branded as cheats, irrespective of costs. With experience, she learned to identify the bus operators and hoteliers with whom relationships could be developed as partners. She also realized the benefits of giving attention to details while planning a tour.

On the Upswing
Not surprisingly, growth has been steady, defined by the business learning and risk absorption capability of wife and husband. The catchments area remains middle class, though it has expanded beyond the community. It also caters to the SME segment and the geographical scope has extended to Karjat, Virar and unto Pune.
Neelima estimates there would be over 50 travel operators in the greater Mumbai area and observes that the business is quite competitive leaving little scope for fat margins or inadequate planning. The steady annual growth of around 10% is the result of not losing focus on the essentials of the business: a package of popular destinations, comfortable travel, good hotel accommodation, customized food and unfailing customer attention, topped with reasonable rates. Value for money, in short. As for marketing, the major effort is in bringing out the annual brochure that is mailed to around 5000 prospects. This effort, along with agents, ads in Marathi papers and participation in exhibitions, generates 400 to 500 customers annually. To service the business, Madhuchanda Travels operates with a staff of nine.

On the Upswing
Neelima reveals that a basic competency required of a successful travel agency is managing and influencing the eco-system comprising of rickshawalas in Agra, hotel managers in Simla, bus transporters, car and jeep owners in all towns, the boatwalas in Srinagar, local guides, accompanying cooks, agents, contractors and staff, It is not surprising that she has a yen for remembering names, faces and good (and bad) deeds done! The travel business is susceptible to the environmental situation in the country. For some years Punjab and Kashmir were out of bounds, The Kargil skirmish and Rajiv Gandhis assassination also affected the business. Availability of budget hotels offering comfortable stay is another deterrent in some locations. However, the biggest spur to internal tourism is the increasing tendency among middle aged and elderly families to travel beyond their habitat. Neelima has successfully tapped the senior citizens segment who have the means to travel but not the support system, by organizing dedicated tours for them. The next customer segment she is planning for is the socially handicapped.

The Thoughts and Beliefs

If Dhirubhai Ambani, a semi educated, petrol attendant could grow his business into Indias biggest enterprise, why could not the Dhumakhes scale up beyond 10% p.a? The response is characteristic- It makes a big difference if you are not born within the support of a business community. The sub text being that the odds are weighed against a lower middle class, entrepreneur from a non-business community to manage the risks involved in business, more so in a service venture. What about taking on board a manager or two? Our son is serving his apprenticeship and will soon assist in marketing. Yes, now we no longer escort every group ourselves, as we have a couple of reliable escorts (married ladies) who can manage the group and because we are on 24/7 mobile contact with them. The unspoken assumption is of having actual success as pioneers- in terms of bettering the standard of living and societal respect What has been Neelimas greatest challenge? This was while escorting a group of medical practitioners who got drunk on tour and acted unruly hurling rotis at the female cooks. Taking control involved threatening police action, serving bed tea in person (as the staff revolted) and enforcing check out time. That was when Neelima realized she had what it takes to run a business. As for resistance from the family, Neelima recalls no such handicaps. Rather, it was encouragement from her husband all through that set her on the path to entrepreneurship.

The Road Ahead

Madhuchanda Travels today offers a package of services centered around the core product of escorted group tour. These add- ons include customized family trips, air bookings, passport and visa services, money transfers and foreign exchange. What of the future? With husband having opted for VRS his services are available full time for the business. The changing business environment has thrown up opportunities for travel packages from corporates where her husbands better communication and entertaining abilities will help while she manages the hotel contracts (250 and growing), the bus operators and the staff abilities will be of help. And Neelima is seriously considering sending the son to a hospitality services course so that they can extend the family business to lease management of hotels among other options for growth. Neelimas tips to potential women entrepreneurs-avoid technical ventures, keep your emotions always under control, do not say no to any customers(not businesslike), pay attention to details and keep within budget. Madhuchanda Travels now focuses on arranging tour packages to employees from financial institutions, government undertakings and business/professional groups. Madhuchanda Travels has also begun consultancy services to companies on total travel solutions.

The Road Ahead

One the anvil is extending the core product to inbound tourism for NRIs. The price range varies from Rs.5000 to Rs.18,000 or more per head. For Neelima., marriage was the stepping stone to realizing her latent potential for entrepreneurship. She is conscious that the Dhumakhes are perceived by the community as successful pioneers in business. There is also no denying the higher standard of living the family can enjoy thanks to their profitable enterprise. And business continuity and growth seems assured with the induction of the son. Turnover is poised to cross the Rs.1 crore benchmark. Neelima is convinced that her B Com degree helped her start and grow the venture, particularly the accounting and financial aspects. Besides, as an educated person, she could convince travel and tourism related organizations to associate with Madhuchanda Travels. As for dealing with competition, being the pioneer has its advantages. Madhuchanda Travels has retained the no.1 position in the area due to quality service and subject under one roof in a manner the competitors cannot match ,we move with the times. We have built a reputation of honest and straight forward dealings that enables us to handle financial requirements with out suppliers over a phone call. We have a dedicated staff who joined us raw and have been trained into responsible performers whom my husband and I back up with our commitments.

The Road Ahead

Neelima is conscious of her weaknesses too. Our location is a minus point-even though we provide the best service in the business our Dombivli chap is an initial disadvantage with organizations. We cannot spend much on promotion. And my lack of familiarity with English also comes in the way of expanding sales. Neelima has not thought of retiring. Her philosophy now is remain peaceful, accept whatever comes but learn from your failures and take care not to repeat mistakes.