₹1 crore to wear an entrepreneur’s hat? Kumar Mangalam Birla says, ‘Not enough for any business’ | Mint

If you are planning to start a business venture and have access to ₹1 crore while you believe that you have enough capital to get by, then you should probably think again.

In a candid interview with Zerodha’s co-founder Nikhil Kamath, Kumar Mangalam Birla, chairman of Aditya Birla Group, delved into a burning question for young entrepreneurs — whether ₹one crore is enough to start a business?

Spoiler alert—Mr. Birla doesn’t think so.

Start-up dream: Financial reality check

Kamath posed the question that many aspiring business owners often ponder, “If a young entrepreneur had ₹1 crore or ₹2 crore, is there an industry you’d recommend with strong tailwinds?”

Birla’s response was blunt: “ ₹1 crore is just not enough to start any business today.” He went further, adding that given the complexities and demands of scaling in a country like India, even ₹10 crore might not stretch far enough. His advice? Keep the money safe in a bank instead of risking it on ventures that lack scalability or capital.

Why ₹1 crore falls short

Birla’s position underscores a critical element of modern entrepreneurship: scale is necessary. Business needs substantial finance to penetrate India’s competitive markets so as to overcome problems such as infrastructure costs, investments in technology, and the cost of acquiring customers. Whether it is software, manufacturing, or e-commerce, the base, less to say, scale-up rarely gets financed by ₹1 crore.

₹30 crore for jewellery store

Kamath’s follow-up ‘What if it was ₹10 crore?’—was met with skepticism from Birla as well. While Kamath suggested that one could open a small jewellery store with ₹10 crore, the latter countered him by saying that one needs a lot more – around ₹30 crore for the same.

Realities of startups: Consultation with industry experts

Birla’s view highlights the hard truth for entrepreneurs — company creation requires the same amount of planning and execution as the required capital. Seed funding is just one aspect of much more significant context in an environment full of unicorns and billion-dollar valuations.

What aspiring entrepreneurs can do

If ₹1 crore isn’t enough, what can young entrepreneurs do?

• Focus on lean start-ups: Begin with a low-capital, scalable model, such as technology or service-based ventures.
• Leverage partnerships: Collaborate with established players or investors to pool resources.
• Use the MVP approach: Introduce a minimal viable product before scaling to measure interest.
• Look for an angel investor: Look for angel investors who have knowledge as well as financial power to support.

Although the advice Kumar Birla offers seems rather discouraging, it comes from immense experience. For aspiring entrepreneurs, his message is simple: set large expectations and prepare with larger ambition. Equally as important as getting capital is knowing market dynamics, scalability, and sustainability.

If someone has ₹1 crore and wants to be the next big success, it is very important to take Birla’s advice seriously: prepare plans, build contacts, and achieve consistent success. But at the end of entrepreneurship, execution and vision are more relevant than just figures.