Cracking the Code: Insights from Brand Founders on Navigating Business Challenges and Finding Solutions

From building the right business strategy to staying ahead of the competition and from tapping on market trends to managing the cash inflow and outflow, the founders of a few brands across food, clothing, beauty and lifestyle, talked to us about how can one meet the challenges in businesses for a smooth flow of operations.

In the ever-diversifying technological world, as much as it is easy to think of a business idea and work on it, the harder it is to sustain it and be persistent in the operations while also ensuring a loyal customer base. Technology like Artificial Intelligence (AI) that is expected to propel advancements is also seen as a threat to emerging businesses in India, according to a few reports. However, these are only a few of the hardships to be named as, in actuality, be they small or large, there are a lot of challenges in businesses, the heat of which is always borne by not just the founders of the businesses but also the entire team.

Recently, we got into a candid conversation with the founders of various brands like TagZ Foods (snacking brand for GenZ), De Moza (clothing brand), Aastey (athleisure wear), Assembly (luggage brand), Plix (plant-based wellness and nutrition brand), and Aadvik Foods (brands offering camel milk and products) - all of which are claiming heights in their respective industries and discussed a few of the problems that the owners face and the solutions to them. Below is the excerpt from the interview.

Planning for the right business strategy is the basis of the business. But if that goes wrong, it poses a challenge to the business. So, what, according to you, should be the right business strategy?

Sagar Bhalotia (Co-founder of TagZ Foods): Business strategy has to be accompanied by the execution. The strategies need to be bifurcated into short-term goals, long-term goals and the execution process. It should be a combination of basic research, hygiene checks, and competitors to determine what is adding the cost and the revenue and what is cutting it.

Agnes Raja George (Founder of De Moza): The first consideration is the product; what product do I want to bring in? So, by product, I also mean understanding customers, what is the market gap, and what problem of the customer I am solving. You should also have a plan in hand, year-wise, on your sale and reach strategy. Most businesses fail in their third or fourth year. The moment you cross the fourth year, you are sustained. Businesses fail in the absence of clear planning. The second is where I want to sell. Then, how I want to sell it.

Jeevika Tyagi (Co-founder of Aastey): At Aastey, we don't look at it as just a business strategy as we focus on the community that we called, the 'Aastey tribe' and that is where all our strategies start. So, how to engage with our tribe is our business strategy which includes organizing events and considering other women who might not necessarily be part of our tribe (to look for a different customer base).

Aditya Khanna (Co-founder of Assembly Luggage): It is important to go narrow in the early stages. If a few products are working well in the market, then it is always better than having multiple products. Cracking one or two 'hero products' and one channel, if you are picking digital distribution, like a web marketplace, is beneficial. So, it is about determining one segment so that you can tap into the consumers accordingly.

Akash Zaveri (Co-founder of Plix): It is very important to experiment and validate your experiments. The more you experiment, it allows you to come up with strategies that are mid-term and long-term. It is a fast-paced world and hence, your strategies also have to evolve continuously. Don't deviate from larger visions.

Hitesh Rathi (Co-founder of Aadvik Foods): In order to understand what strategy is working, the best way is to try it out. In the case of start-ups, go on a smaller scale. Don't invest too much money to understand what is working and what is not. Define your vision before determining your strategy.

In the absence of brand awareness, a business deals with a great crunch for recognition. So, what is your way of building brand awareness?

Jeevika Tyagi: We always get in touch with our customers and understand their feedback and launch the products according to their demands. One should go through the smallest of the small messages, see what their community is saying and build the brand accordingly.

Akash Zaveri: We look forward to razor-sharp advertising. We constantly keep in touch with the trending content that goes viral on social media. We create ads that are very native to the platforms. We stay away from CPC advertising or any advertising methods that are very commoditized because it is not sustainable. I think all the forms of media buying are very outdated today, and you have to constantly evolve.

Hitesh Rathi: When you are building a brand, the important thing to have is a hook. The hook gets you first-time customers. Build on your hook and define why your product is useful. Secondly, you should have good customer service. You have to be very transparent, very honest so that people remember your brand for as long as possible.

Keeping up with the market trends is very important in the absence of which the brands fall behind the contemporary choices. How to keep up with it?

Agnes Raja George: Study your business, be involved, talk to your customers, and understand how they are experiencing your products. Determine if they are happy, then what is the element in your product making them happy, and if they are not, then check on how you can improve. First, you need to be ahead of your own business.

Jeevika Tyagi: If you like to be part of a certain market, go back to following them, which could be their prime channel. I believe that the website has now become the last touch-point. If it is a homeware brand, check their Pinterest. Maybe, that is where they are active. If you are a clothing brand, check out the Instagram brands of other clothing brands. Always follow the brands' primary touch point to know what they are up to and plan.

Aditya Khanna: Consumer trends change. You have to make sure you are good with innovation and that you can monetize the innovation quickly in a one or two-year time frame. Timing is crucial, and a lot of products are copied. So, before it gets copied, you need to be ready with your other products too.

Akash Zaveri: I think innovation is the stepping stone for success. The more feedback you take, the more you capture enough points of view, perspectives, and data points where you can come up with an informed decision. You constantly have to evolve your offerings in a manner that finally you achieve the product fit for the market.

Hitesh Rathi: The best way to understand the market is through customer feedback. Have an open communication about the products.

One of the greatest challenges is posed by the competitors. So, how to stay ahead of the competition according to you?

Sagar Bhalotia: The product has to be different. In our case, what worked best was that we are providing the best possible alternative to the potato chips available in the market, although we are not claiming it to be healthy. So, it is about staying honest and transparent with the customers. If you are into the snacking segment, you might also have to work around packaging a bit.

Agnes Raja George: Part of your strategy is to understand the competitors as well. In fashion, there is hardly any different brand. All of us cater to some specific needs of the customers. But start offering what your competitors are lacking and tap the customers. Plus, you should keep studying your competitors.

Jeevika Tyagi: In our case, we focused more on building our product which even took a year. So, that is how we have been cutting the competition.

Aditya Khanna: Choose the category that allows you to play well in that category. Brands need to grow in their own niche and get to a particular size before competing with other brands.

Akash Zaveri: It is about figuring out a better way to engage with your customers. In the end, you have to be delivering more value to the customers than your competitors to be ahead.

Hitesh Rathi: You need to have a worthy rival for sure. Otherwise, how will you innovate? How will the consumers get a better product, and who will they compare you with? Competitors also give yomarket validation if your product is different.

Managing cash inflow and outflow in businesses is challenging. But how can one solve the problem?

Sagar Bhalotia: The problem occurs when you spend Rs. 400 to get make a sale of Rs. 100. So, understanding the margin is important so that one can optimize the cash inflow into marketing. In retail businesses, it becomes challenging as the working capital is small. There is some kind of investment required with every product launch or change in locations. So, your arrangements with your distributors and collections need to be focused on.

Jeevika Tyagi: You have to be really conscious of the cash outflow. About cash inflow, we believe that why would a vendor work with us if we will also pay at a cash cycle which is far away from other cash cycles? We make sure to pay before everyone else. We keep a very close eye on our PnL (Profit and Loss). We have also been able to crack certain deals in which the cash cycle is post-paid so that we can use that amount to flow into our eco-system instead of blocking that amount by directly paying the manufacturers.

Aditya Khanna: Consumer businesses, unlike tech businesses, need to make money per customer and transaction. So, the unit economy needs to be strong. This is essential and follows other planning as well. If you have a high investment incurred because of a website, you can counterbalance it by doing well on third-party channels like marketplaces or offline.

Akash Zaveri: You should be well capitalized. You should be very critical of your PnL and your margin structures. In terms of managing cash, you should always prioritize — in your early days when you are looking to multiply and grow digitally — channels that are offering much more favourable payment terms. Build your own D2C website where you can collect in a day or two. Work with partners like Amazon and Flipkart that pay on time. Stay away from B2B distributors or other channels that are working on longer credit cycles if cash is a concern. Always demand credit from your suppliers, sell them a story of your growth, and that's how to manage the cash in a healthy way.

Hitesh Rathi: You need to identify the key dates and timelines in the month when the cash flow is expected. You can also try your hands at asking for credits from your vendors and advance from your customers.

Also Read: A quick glance at the growing culture of thrifting in India

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