Aug 01, 2013, 07.52 PM IST | Source: Moneycontrol.com

From tin shed to corporate chic, Viplab chisels an SME

A tough-as-nails entrepreneur chisels a business in office furniture despite humungous odds. ‘The government’s incentives for SMEs never trickle down to us,’ rues Saurabh Rohtagi.

Sonali Chowdhury

Many would kill for a cushy job in a comfortable leather-back swivel chair. Not Saurabh Rohtagi. A qualified company secretary with a secure job, Rohtagi would often swivel in his leather-back chair in his office and dream about the future.

It was Rohtagi’s belief that a comfortable workplace tended to increase productivity and raised the brand value of the company too. To Rohtagi’s mind, this meant only one thing companies placed a premium on good office furniture.

Many years later, Rohtagi’s Viplab Industries, a Crisil -rated company, is dishing out chic and comfort in the form of office furniture, cubicles and wall panelling, to companies that include Idea Cellular, Hitachi, Geetanjali and Vaibhav Gems, among others.

Our self-made entrepreneur, now in his 30s, set up his company in Jaipur in 2008 and later converted it into a partnership along with his wife Tanu and brother Abhishek. While Saurabh looks after the finance, marketing and promotions of the company, Abhishek and Tanu oversee manufacturing, expansion and planning.

Dark Days

A turnover of 43 lakh (2012-13) may seem modest for other SMEs but not to Rohtagi, whose humble beginnings would have deterred many from taking the risk. When Rohtagi’s father lost his job to failing eyesight, his mother, a teacher, began to support the family.

Life was tough but Rohtagi, still in school then, cultivated a positive outlook. After he graduated in 2003, he became a qualified company secretary and held steady jobs for five years in the banking and insurance sectors. That’s when he realised there was a permanent and large requirement for office furniture. He did his homework and finally took the plunge.

“Business gave me the freedom to take my own decisions, take risks and plan my future. I hoped it would bring me recognition and good money some day. His brother Abhishek laughs, “Saurabh is the kind of person who doesn’t sleep at night till an order is complete and delivered to customers. Once it is delivered, he starts looking for more orders!”

Trader To Manufacturer

Rohtagi started as a trader and bought furniture from Delhi and Jaipur, which he supplied to retailers and dealers locally. “It was very tough getting retailers. We could not even take goods on credit as we did not have a solid business background or collateral, and had to pay cash up-front,” shares Rohtagi.

He realised the solution was to set up a manufacturing unit. But how was he to do that with just Rs 25,000 in the bank? “We started visiting dealers and wholesalers, and gradually earned some goodwill. Gradually, we started getting goods on credit. Eventually, we were able to invest Rs 2.5 lakh in machines, equipment and setting up the unit.

Initially, Abhishek kept his full-time job to support the venture and the brothers scouted for a suitable workshop. “We found someone who was willing to rent us a tin shed with an electricity connection for Rs 5,000 a month,” recalls Rohtagi. “We bought second-hand machines because we could not apply for loans to invest in new ones.”

End Of The Tunnel

The next challenge was hiring skilled workers. “We didn’t have enough equipment so we could not turn around our products quickly. We thus incurred losses amounting to Rs 12,000 and had to sell the goods at a discount to recover some of the money to pay for the raw materials.

With sheer grit, Rohtagi made it through those dark times. It was therefore a proud day when he rolled out his first product suite. “One of our earliest clients was Geetanjali, which was a big boost for us. The order was valued at Rs 5-6 lakh and this helped us take off,” says Rohtagi who commands a staff of 26 today.

As the business gathered momentum, Viplab Industries started getting orders from government firms and large companies and Rohtagi worked towards getting a Crisil rating and ISO certification to put Viplab Industries at par with other players.

Even A Home Loan Is Easier To Get!

“SMEs like us find it very difficult to secure loans. The government has left it to banks to offer loans but the money doesn’t trickle down to us. And there’s tons of paperwork and if it gets stuck, the whole process stalls,” Rohtagi sighs.

He says Viplab Industries had applied for a bank loan of Rs 12 lakh, which they were eligible for but received only Rs 5 lakh. “How were we supposed to pay for raw material, working capital, fees for tenders and repay our creditors? The banks we had approached asked us to complete orders worth Rs 10 lakh before applying to them! It is easier to get a home loan than a business loan!”

Only The Tough Survive

But tough times have made the Rohtagi brothers only tougher and Saurabh remarks, “We aim to cross a turnover of Rs1 crore by next year and register our company as a private limited firm.”

That’s no empty boast for a youngster who went from a turnover of Rs 5 lakh to Rs 43 lakh in just three years.

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