23 September 2013

5 reasons not to become a social entrepreneur


Too often the right people try to become social entrepreneurs for the wrong reasons.

Social entrepreneurship is fast becoming a buzz word.
Every day you hear of a new social enterprise conference, fellowship, award, start-up being funded, new fund being closed and so on.
No doubt there is going to be a huge interest in fresh graduates, young professionals and seasoned veterans wanting to take a stab at social entrepreneurship.
It would serve the industry well if the right profile of individuals jumped into the fray and started companies.
Too often the right people try to become social entrepreneurs for the wrong reasons.
Here are five reasons why you should not consider becoming a social entrepreneur.


1. You feel passionately about an idea
We get it. You have been frothing at the mouth and feel rabidly about the environment, alleviating people from poverty, saving women from being exploited, bringing healthcare to all, educating children, skilling the unemployed or pioneering affordable housing.
Passion is good. It will help you muster up the courage to quit that well-paying job, convince your parents or your wife this just wasn’t a moment of immense clarity brought about by dropping acid but is the real deal and even get your friends, family and fools to invest in your idea.
But only passion is passe.
Well done! Once you run down the initial stretch, you are bound to hit a few road bumps; this is where the rubber hits the road.
You will have to fight all the familiar problems that entrepreneurs face: Hiring a team, raising follow-up funds, mundane paperwork, initial idea not working with no pivot in sight and money drying up.
Once your passion dries up in the tank, you need a back-up reservoir that is filled with the entrepreneurial spirit.
If you lack entrepreneurial chops, might as well pack up and shut shop, because passion will get you to the stream, but to bend down and drink you will need to know the nuts and bolts of how to build a business.
If you don’t have it yourself, please find a co-founder who has the necessary wherewithal to build a business.



2. Seeking a $357 million SKS Microfinance type IPO
So you have been hearing that impact investing is the next big thing and you want in.
If you want to become a social entrepreneur because you want to make a pot on money, and are hoping for a big exit, you might want to think twice.
For starters, not all ideas make money; there are quite a few social enterprises that are 'not for profit', and the ones that are 'for profit' make very less money.
Scaling a social enterprise might take years, because of the very nature that it needs to focus on the double bottom-line, social impact can sometimes come in the way of pumping out greenbacks.
A sole focus on gushing cash can lead to mission drift and blindness to the original vision.
Remember that in impact investing, impact comes before investing, therefore profit, even though is vital for the survival of the organisation never comes at the cost of impact.
Most social entrepreneurs give up the trappings of luxury, foreign holidays, expensive cars and big houses till they have invested enough time and effort to build both impact and a solid business.
This can frustratingly take years, before you eat from the fruit of your labour.



3. Corporate life has left you jaded
Not everybody in corporate life is happy, and a lot of mid-level executives who have bought that house and car, and put away a fair amount of savings are ready for new challenges that are more meaningful.
Social entrepreneurship seems to be that sweet spot between a desire for social change and the use of business practices.
The social entrepreneurship industry may not pay as much as most of the corporate world, but the pay isn’t bad either, in fact some social enterprises pay quite handsomely.
Becoming a social entrepreneur may however not replace your need to substitute corporate drudgery with a challenging and meaningful second career.
Most of your time might be spent trying to convince various stakeholders about your idea.
Without the humongous corporate resources at your disposal you might have to do more with less; most systems and processes have to be created anew.
Founding a social enterprise will mean having to work extremely hard only to find out that progress is slow, and sometimes non-existent.
Also scaling up is difficult and sometimes it might feel akin to banging your head against a granite surface.



4. You want to give back to society
Founding a social enterprise is not the same as giving to charity or volunteering your time.
It will be a life-changing experience, which without passion, purpose and entrepreneurial skills will prove to be a non-starter.
Consider this: Unlike traditional entrepreneurship where it is easy to find a co-founder or two, in social entrepreneurship, most ideas are born in isolation.
Unlike selling an e-commerce idea, finding a founder who will share the same vision is difficult.
If you want to do something for society having reached a state of self-actualisation, there might be other ways to get that monkey off your back.
Take a sabbatical, volunteer, accept a fellowship at a social enterprise or find a way to become a social intrapreneur in your company.
Social entrepreneurs are a rare breed; most of them will give up family, friends, money.
They will face ridicule, criticism, bankruptcy and still give up their dream.
Unfortunately, an urge to give back to society is not all that it takes to become a successful social entrepreneur.



5. Suffering from mid-life crisis and your career is stuck in dullsville
You were a bright star at work, now you have been sidelined and others less deserving are moving ahead and being promoted.
Moving to another company is not an option as the economy is bad and hiring has reduced.
Worse, you are having a mid-life crisis.
All good reasons to consider quitting and doing something new, even entrepreneurial, but don’t consider becoming a social entrepreneur if you haven’t done the due diligence.
You might want to consider fixing the situation at work first before thinking of social entrepreneurship as a career.
Still not working?
Consider becoming an employee of a social enterprise before starting up on your own.
Doing your own social enterprise start-up should be your last choice.
Why?
As mentioned previously, if the reason behind you pursuing entrepreneurship is not because your other gig is going bad, you probably want to found a social enterprise because you have been consumed by a purpose to do only this, which is the right way to go about it.


Top builders sitting on Rs 58,000-cr inventory :Business Standard


India’s top builders seem to be sitting on a huge unsold real estate inventory, worth nearly Rs 58,000 crore (Rs 580 billion), which could take more than two years to sell, a Business Standard analysis of 19 listed realty firms on the BSE-500 index shows.

At the end of March, the combined unsold inventory of these companies rose 25 per cent from a year earlier. Their net sales remained almost flat during the same period (see chart).

Of the Rs 58,000-crore pile-up, DLF, India’s largest real estate developer, accounted for almost a third. As of March-end, the Delhi-based company reported an inventory worth Rs 17,600 crore (Rs 176 billion), 18 per cent more than that two years earlier.
The company’s consolidated net sales declined from Rs 9,561 crore (Rs 95.61 billion) to Rs 7,773 crore (Rs 77.73 billion) during this period.
Following DLF is HDIL, which reported an inventory of Rs 12,043 crore (Rs 120.43 billion) at the end of March this year, more than six times its net sales last financial year.
Click on NEXT for more...



Third on the list is Indiabulls Real Estate, with an unsold inventory worth Rs 5,111 crore (Rs 51.11 billion), nearly four times its 2012-13 net sales.

The situation might look even grimmer if the figures for unfinished projects or those under construction (capital work in progress) were to be included. At March-end, the 19 firms in the sample reported Rs 12,300 crore (Rs 123 billion) of capital work in progress.

For the entire sector, the unsold inventory could be many times more, as a majority of developers are not listed. Delhi and the National Capital Region (NCR), for instance, have a little more than 400 builders but only four of those are listed and part of the sample here. In Mumbai, there are around 140,000 unsold apartments priced at an average Rs 1.2 crore (Rs 12 million) each, according to estimates.

The current inventory level is much higher than the optimal eight to 10 months.
“Builders need to maintain some inventory to maximise their price realisation. But if that exceeds 12 months, they are forced to borrow to fund their operating expenses. If not unchecked, it could start a spiral of inventory and borrowings,” says Pankaj Kapoor, founder & managing director of real estate consultancy Liases Foras.



This explains the close correspondence between inventory and borrowings in the industry. At the end of the last financial year, the companies in the sample were sitting on combined borrowings of over Rs 51,000 crore (Rs 510 billion).

With the interest rate rising, liquidity drying up and sales slowing, developers could be in for tough times, as they might be forced to generate liquidity, especially in Delhi-NCR and the Mumbai Metropolitan Region (MMR). Industry trackers attribute this to a combination of high real estate prices and poor economic growth.

“Inventory is growing because sales have slowed down. Following a price correction after the 2008 crisis, sales picked up. However, builders escalated the prices nearly 100 per cent by 2010, pulling down the offtake of new properties,” says Kapoor.

He estimates that the inventory in Mumbai could take nearly four years to sell out at the current absorption rate. The only way forward for builders now is to cut prices and create demand. “Price correction is imminent. It has started in NCR and now the trend is creeping into MMR,” he adds.



Sanjay Dutt, Cushman & Wakefield’s executive MD (South Asia), agrees that there could be some price reduction in the next few quarters. “Between now and Gudi Padwa (in April), there will be a price correction of 5-10 per cent in Mumbai, while prices could fall by 10-15 per cent in its suburbs,” he says.

Builders, however, seem to disagree.

“We have an inventory problem but that is not as big as being portrayed. In many cases, this is planned inventory to stagger revenues over a period and optimise per-unit realisations,” says DLF Senior Executive Director Sriram Khattar.

“Inventory will decline through a combination of price correction, reduction in number of new project launches and higher sales,” he adds.

The view is seconded by industry body Credai. Chairman Lalit Kumar Jain says the industry doesn’t have too much of an inventory problem. “Price correction has already happened in most markets and developers are selling at their best price due to liquidity crunch. The market is almost bottoming out,” he adds.


Recovery to begin in second quarter of 2014:: Business Line

Crystal-ball gazing on the economy
Excerpts from an exclusive interview with Business Line.

WHERE IS GDP GROWTH HEADED?

Growth has remained very weak over the last three quarters and we expect growth to remain below 5 per cent for the next three quarters as well. Domestic demand will remain constrained by interest rate tightening by the RBI. Although we do expect an improvement in domestic demand in the US and Europe over the next six months, supporting a gradual recovery in external demand, we believe that a meaningful recovery in private capex or consumption in the next six months will be difficult, considering the recent tightening in monetary policy.
In this context, we believe that recovery in growth will not be led by a quick rise in consumption or investment to GDP. We believe that the first stage for stabilisation in growth will be through improvement in macro stability indicators (such as inflation, interest rates, and government surplus/deficit). We expect a gradual recovery in growth to begin in the second quarter of 2014 helped by export growth and stabilisation in private capex. We expect overall GDP growth to improve to about 5 per cent by September 2014 from an expected 4 per cent level in December 2013.

Sizzling Stocks: JSW Steel, Shriram City Union Finance :: Business Line


City Union Bank: Buy:: Business Line


Should you buy gold on the dip?



An employee holds a gold key at a jewellery shop.
From its recent peak, the price of gold has dipped 9%. Will this correction last longer or should you buy some gold now?
Investors looking to make a quick buck from the yellow metal should hold on for now.

The precious metal lacks major triggers that can drive prices higher again, say experts. In the past three weeks, gold has dipped 9.8 per cent domestically as investors have shunned the yellow metal abroad. International prices dipped 7.5 per cent, even as the rupee appreciated more than seven per cent against the dollar.
On August 28, domestic gold prices surged to a high of Rs 33,265 per 10g as the rupee had fallen earlier against the dollar and international prices surged on fears of a conflict in West Asia.
Even at these lower prices, experts say investors would do well to stay their buying as prices are likely to come down further in the near future. Three factors weigh heavily on domestic gold prices — international prices, the rupee-dollar exchange rate and, of late, customs duty, which has been raised by 10 per cent since the beginning of this year.


Says Ajay Bagga, head, wealth management, Deutsche Bank: “Most of the run-up in gold prices is behind us. The rupee is stabilising and international prices of gold have been coming down.”
A tapering in the US Fed's bond-buying program is expected to reduce the allure of gold internationally. Hedge funds, which had invested heavily in gold to protect their investments against rising inflation prices and falling dollar, may start to unwind their gold positions. This could keep domestic prices constrained for some time. 

Indraprastha Gas: Buy:: Business Line


Global Technical Perspective (23-Sept-2013) :Edelweiss

We are pleased to send you this week's issue of Global Technical Perspective.

We hope you find this information useful. As always we welcome your thoughts, questions and feedback.


  •  Nifty (futs) – impulsive rally looks complete; retracement down to 5772 underway

  •  Bank Nifty (futs) – retracement to 11,445 before the move fades out

  •  S&P 500 – breaks to a new life high; final dash to 1777 before topping out

  •  MSCI Asia ex-Japan – four-week rally to stretch towards triangle high of 560

  •  DAX – European bellwether headed for 9,000

  •  US 10-year yield – momentum signals topping risk; below 2.80% opens downside to 2.40%

  •  DXY – a decline to 79.50 on cards before a meaningful recovery begins

  •  USDINR – sharp correction likely to be arrested in 61.20 / 60.50 support cluster

  •  Brent Crude Oil – false breakout above $114.35; now headed back to support range of $107/106

  •  Gold – retracement after an impulsive advance to see demand emerge at $1277


Regards,

ICICI Pru Balanced: Invest :: Business Line


MCX gold can consolidate sideways:: Business Line

In a surprise move, the US Federal Reserve retained its stimulus measures in its policy meet last week. Gold hit $1,363.7/ounce on Wednesday, up 4 per cent and closed the week at $1,325/ounce. The news that existing home sales in the US increased 1.7 per cent in August to an annual rate of 5.48 million units against the expected 5.25 million units dragged price. Silver ended the week at $22.2/ounce, down two per cent.

SUBDUED APPETITE

Investors’ appetite for gold didn’t return. The US SPDR gold trust’s holdings were reported at 910.19 tonnes on Friday, marginally lower from the previous week.
In the domestic market, gold reversed its downward track and recorded a gain despite rupee’s appreciation. MCX gold hit Rs 30,544/10 gram on Thursday and closed the week at Rs 29,277/10 gram, up one per cent. MCX silver ended at Rs 49,306/kilogram, up marginally. Rupee hit 61.64 against the US dollar on Thursday, but later lost steam and ended at 62.26.
MCX saw good trading interest in gold and silver futures contract. In gold, the average daily volume was 1.54 lakh contracts, up from the previous week’s average of 1.14 lakh contracts. In silver futures, the average volume was 1.59 lakh contracts, up 35 per cent over the previous week.

MARKET NEXT WEEK

Analysts do not see a change in Fed’s stance of continuing on stimulus at least till November. In August, the jobless rate in the US was 7.3 per cent, much higher to Fed’s comfort level of 6.5 per cent. The US GDP growth estimates have also been revised downwards to 2-2.3 per cent from around 2.3-2.6 per cent earlier. But, gold investors can’t take much comfort.
The yellow metal will remain volatile till a decision is taken on raising the debt ceiling. Failure to arrive at a consensus, though, may give gold a leg up. Next week, the flash PMI Manufacturing numbers on Monday, consumer confidence numbers on Tuesday and new home sales numbers on Wednesday will also be watched. Thursday will see the quarterly GDP estimates and the crucial jobless claims numbers from the labour department. For domestic market gold traders, rupee’s move will be key to gains/loss in portfolio. In his first monetary policy review on Friday, the RBI Governor Raghuram Rajan reduced the MSF (marginal standing facility) rate by 75 basis points reversing partially the liquidity tightening measure taken in July to save rupee.

TRADING TIPS

As indicated in our previous column, MCX gold cut its first support around Rs 31,160/10 grams last week. However, it reversed at Rs 29,277 much before the second support at Rs 28,743 on positive cues from the Fed. Now, it looks like the metal may hover sideways for sometime and then drop to Rs 29,200. The next support on the downside would be Rs 28,800.
The metal needs to gain momentum and break Rs 31,400 to see a trend reversal. For this, a drop in rupee may be of help.
MCX silver too behaved in a manner that we had forecast and cut the support at Rs 49,239/kilogram to hit a low of Rs 48,488. In the coming week, the metal may weaken further to Rs 46,713 and Rs 43,587. If price manages to rise and cut Rs 52,863, it could hit Rs 55,566.

MCX gold can consolidate sideways:: Business Line

In a surprise move, the US Federal Reserve retained its stimulus measures in its policy meet last week. Gold hit $1,363.7/ounce on Wednesday, up 4 per cent and closed the week at $1,325/ounce. The news that existing home sales in the US increased 1.7 per cent in August to an annual rate of 5.48 million units against the expected 5.25 million units dragged price. Silver ended the week at $22.2/ounce, down two per cent.

SUBDUED APPETITE

Investors’ appetite for gold didn’t return. The US SPDR gold trust’s holdings were reported at 910.19 tonnes on Friday, marginally lower from the previous week.
In the domestic market, gold reversed its downward track and recorded a gain despite rupee’s appreciation. MCX gold hit Rs 30,544/10 gram on Thursday and closed the week at Rs 29,277/10 gram, up one per cent. MCX silver ended at Rs 49,306/kilogram, up marginally. Rupee hit 61.64 against the US dollar on Thursday, but later lost steam and ended at 62.26.
MCX saw good trading interest in gold and silver futures contract. In gold, the average daily volume was 1.54 lakh contracts, up from the previous week’s average of 1.14 lakh contracts. In silver futures, the average volume was 1.59 lakh contracts, up 35 per cent over the previous week.

MARKET NEXT WEEK

Analysts do not see a change in Fed’s stance of continuing on stimulus at least till November. In August, the jobless rate in the US was 7.3 per cent, much higher to Fed’s comfort level of 6.5 per cent. The US GDP growth estimates have also been revised downwards to 2-2.3 per cent from around 2.3-2.6 per cent earlier. But, gold investors can’t take much comfort.
The yellow metal will remain volatile till a decision is taken on raising the debt ceiling. Failure to arrive at a consensus, though, may give gold a leg up. Next week, the flash PMI Manufacturing numbers on Monday, consumer confidence numbers on Tuesday and new home sales numbers on Wednesday will also be watched. Thursday will see the quarterly GDP estimates and the crucial jobless claims numbers from the labour department. For domestic market gold traders, rupee’s move will be key to gains/loss in portfolio. In his first monetary policy review on Friday, the RBI Governor Raghuram Rajan reduced the MSF (marginal standing facility) rate by 75 basis points reversing partially the liquidity tightening measure taken in July to save rupee.

TRADING TIPS

As indicated in our previous column, MCX gold cut its first support around Rs 31,160/10 grams last week. However, it reversed at Rs 29,277 much before the second support at Rs 28,743 on positive cues from the Fed. Now, it looks like the metal may hover sideways for sometime and then drop to Rs 29,200. The next support on the downside would be Rs 28,800.
The metal needs to gain momentum and break Rs 31,400 to see a trend reversal. For this, a drop in rupee may be of help.
MCX silver too behaved in a manner that we had forecast and cut the support at Rs 49,239/kilogram to hit a low of Rs 48,488. In the coming week, the metal may weaken further to Rs 46,713 and Rs 43,587. If price manages to rise and cut Rs 52,863, it could hit Rs 55,566.

Goldman Sachs -Behind the numbers- ahead of the market :: PDF link

Rupee in high spirits – but for short-term:: Business Line

There was euphoria in the currency market during the last couple of weeks. This was aided by a positive intent shown by the new RBI governor Raghuram Rajan to boost dollar supply by providing avenues to banks to raise money abroad.
Banks have raised close to $ 1.4 billion from abroad under the swap facility provided by the RBI. This helped the rupee to recover from its all-time low.
The rupee was also aided by a surprising and unexpected move by the US Fed to continue with its stimulus programme and differ tapering.
This helped the rupee to strengthen further to a low of 61.59 last week.
The reprieve was cut short by the RBI’s monetary policy on Friday whereby it made borrowing a little costlier by increasing the repo rate by 25 basis points from 7.25 to 7.50 per cent.
This even as it eased liquidity a bit by cutting daily Cash Reserve Ratio (CRR) requirement from 99 per cent to 95 per cent and reducing the Marginal Standing Facility (MSF) rate by 75 basis points to 9.5 per cent.
This move by the RBI to contain the rising inflation, was immediately thwarted by the markets, which gave a thumbs down and traded lower.
We did see some recovery in the later part of the day, after Rajan clarified his stance but it left India Inc wanting more.
Foreign Institutional Investors (FIIs) have been net buyers in the Indian markets during the last couple of trading sessions, buying close to $1.5 billion in the Indian equity markets.
This has helped the rupee to strengthen and we expect FIIs to invest more in the Indian markets in the days to come.
With European and US economies showing signs of growth, India’s exports will ease current account deficit (CAD) woes a bit, and help the rupee as well.
Moreover, with the Syrian risk easing for the time being, decline in global crude oil prices has eased India's import bill thus aiding the rupee.
All these factors have helped the rupee in the short-term and we will see it appreciating a little more to around 60.50 to 61 levels in the next few days. Technically there is a strong resistance at 61.30 levels and a breach of that could take the rupee to 58.60 levels.
However, a few factors still haunting the rupee are high fiscal deficit forcing the Government to borrow more and the not so encouraging Index of Industrial Production numbers.
Moreover a high external debt of around $ 390 billion of which about $ 172 billion is maturing before March 31, 2014 will affect the rupee adversely in the long-term and we might see it trading above 65 levels.
(The author is Regional Director, Alpari Financial Services (India). The views are personal)