Evolution Process Continues

It has been long time since I wrote anything on this blog. Facebook has taken the space for the small headlines. But for long write up, this is the place.

Over last one year and half, things were too hazy and tough but we persisted and waited for some divine moment of inspiration. The inspiration never came but small small steps towards survival guided our way forward. Only good thing that we did that we kept walking. We kept on moving despite having hazy vision and dark clouds.

At this moment of time, the path way forward is getting more clearer.

Bihar Development Trust as a non profit organisation will survive now.


BDT 2.0 will be different from last five years. The headlines will be changed. The focus will be sharp.It will become a professional led organisation with 100% dependence on grant and donation for its work. It will exit from the social business space over next five years and the space will be taken over by businesses in private limited company mode. Over the next five years, Its debt will reduced to zero and it will execute projects on grants only. Its main role will be to build community based institution and enable them to do business in this market economy. All this nurturing will be done by the support of grants only.The focus area of Bihar Development Trust is also getting delineated. It will work on bamboo and weaving thematic area. This will entails fields like livelihood promotion, institution building, capacity building, climate change, environment , sustainable development etc. We are planning to hand over the management of Bihar Development Trust to professionals by 2017. The idea is to transform Bihar Development Trust into a resource organisation on Bamboo and weaving over next five years. Marketing activity of Bamboo based programme and weaving based programme is in process of being shifted to private limited company form.

We have become more patient and preferring to go slow and focus on consolidation of the business processes.Lot of innovation and good HR practices have evolved after these two years of struggle of becoming focussed.

The faith has become stronger . The ability to survive has acquired a new meaning.
Lots of things are happening which will be shared in coming posts.

Happy New Year 2012

Dear Friends , Happy New Year Greetings !!! We are in the fifth year of our entrepreneurial journey. 2011 threw lot of challenges are surprises at us and we are weathering the storm. 2011 saw the final death nail being hammered to non profit micro finance sector with clear although onerous guidelines for profit NBFC MFIs. There are challenges of bad debts, repayment and staff retention and retooling the micro finance staff for livelihood and marketing. The commissioning of bamboo stick making factory gave expertise in handling the problem of setting of new industry in a new area from scratch. We needed to conduct multiple trainings of women for making the stick and polishing it. We had experimented with market in Bihar Development Trust (BDT) in weaving , bamboo and agriculture space while struggling towards success. 1000s of families have been trained and engaged in production of incense sticks, weaving fabrics, stoles and sarees and vermicomposting. 1000s of farmers are getting agri-extension and institution building services. BDT won Development Marketplace 2011 organised by the World Bank, The World Bank Institute & IFC. BDT was finalist in Wantrapreneur 2011 organised by Villgro. The preparation for these recognition helped us to survive during darkest period and innovate to find new solutions.It gave us immense exposure through interaction with like minded organisation across India. It exposed us to many for profit organisation doing commendable work in social space and linking the bottom of pyramid to market. We had the market linked approach for our livelihood work from beginning of Bihar Development Trust.The non profit legal architecture has hampered the growth of activities in bamboo and silk. Banks were afraid to offer cash credit for its silk and bamboo operations to BDT for its non profit status. The incense stick value chain and textile business require lot of capital to scale it up. We had founded a for profit company named Rural Development & Marketing Pvt Ltd (RDM) for marketing purpose and scaling up the business by raising equity in the company. The incense stick, vermicompost and silk marketing business are done by RDM. BDT will keep on doing the community mobilisation, capacity building and livelihood promotion work through grants from donor agency. It will not raise any further debt for business purpose. RDM is launching the incense stick brand called "Aradhna" in Jan 2012. Last four months were spent on doing research on Incense stick brand. By learning from existing products, We developed a product with better value proposition for the end consumers. The whole supply chain has been tied up. Besides, We may be the first integrated players in incense stick value chain in East India by virtue of being present at each step of value chain namely Bamboo Plantation, Bamboo Stick, Rolled Stick , Incense Stick and Packaging. RDM has applied for Bihar Industrial Land to Industry Department of Bihar for 90 year lease. The whole incense stick value chain is giving employment to 2 lakh families in Bihar and We hope todouble this number by our effort in Bihar. You will be happy to note that RDM has been one of finalist for Unreasonable Institute Finalist Marketplace (www.unreasonableinstitute.org) for our idea on Incense stick & vermicompost value chain going to improve the livelihoods of one million families in Eastern India over next decade. We would need your financial support to raise 10,000 USD in limited three weeks time for being able to visit the Unreasonable Institute at Colorado in USA so that we can raise the required capital to create value for one million families in sustainable for profit manner. We emerged from 2011 battle bruised but mentally hardened. We are looking for 2012 with new excitement and hope. We are forever indebted to all our friends and well wishers who have supported the idea and helped in transition. The economic development of Bihar is a long unknown path and we will keep creating and walking the path till our life ends. RDM & BDT wishes you all a Very Happy and Prosperous New Year 2012. May the New Year brings good luck to all of you in your endeavours !!! With Best Wishes Dr. Ravi Chandra

A Fresh Path Ahead

We are going through interesting times. It has been a great roller coaster ride. After discussion with lot of people on path ahead and best model for scaling up, the path ahead is the route of private limited company. People have adviced us to form private limited company in the verticals of livelihood programmes and we have accepted the advice. Our initial idea was that producers will get shareholding in the marketing company. The producers , promoters and investors will get equal stakes while ESOPs may be 10% of the share capital. Many people adviced that things get complicated when producers and consumers both are on same board as they have conflicting interest. The balance becomes tough and it may bring the functioning of company in standstill in long term. The current structure that is in our mind is following. The producer will get their separate set of organisations. They will be free to market their products to any company including ours. We will not depute any CEO from our side for managing affairs of the producer organisations. We will build capacities in the producer organisations so that they can hire the professional staff or some one among them can become CEO of the producer organisation. BDT will try to get grants to nurture producer organisations to their ultimate objective of becoming self sustainable. BDT will become solely grant recieving organisation which will promote producer organisation and build capacity in them by get experts, resources person, funds, organsing exposure visits, creating bank and credit linkages, technology transfer and awareness, grooming leadership , governance development of producer organisation etc. The present set of Trustees will become honorary and new set of trustees will be coopted like from old employees to community members. This will be done once BDT repays it all loans and all income generation activities are shifted to private limited companies in transparent manner. The private limited companies will market the products sourced from BDT and producers associated with them . Later, The companies will market the products produced by producer organisations. The products will be sourced by market mechanisms but the producer company will be the preferred supplier to the marketing company. The private company will always pay the fair prices for the products souced from producer companies.The private companies will donate 5% of their PAT to BDT by passing board resolution so that the BDT can be in existence in perpetuity and continue doing welfare and producer organisation development work in the community. Each private company will be handholded by strategic investors of that sector. We are operating in bamboo, textile and agri business domain. We will be seeking institutional or private shareholders who can support us for long term and handhold till IPO. We have the dreams of bringing IPO from Bihar and distribute thr products manufactured in Bihar to the whole world. This is the solution that will take us to the goals of 20 billion dollar enteprise by 2030 if not 2020 as was originally envisaged. We have resolved our internal dilemmas and found our way out from current confusion. It means its a new beginning. With BDT, It was tough to visualise 20 billion dollar group. But, With the private limited company we will reach that and can impact 10 lakh families of Bihar in positive manner. Now, mind is clearer. We have foreseen the solution. Now, the objective is to clear the debts of BDT . It will take 24 months to reduce the debt of 1.5 crore and we have our task cut out for it. We have taken the challenge. The achievement of zero debt status without choking cash will determine our future after 12 months. We are moving ahead with our gameplan. We have taken the risk. God give us faith to implement this as we have taken steps towards the new path. As usual the johny walker ad comes to mind "Keep Walking". These two words have inspired me since my college days before I knew that its a liquor company. I am thankful to life for giving such painful but interesting experiences. Only thing is that my family now is feeling the pain also which should be part of story. Steve jobs died and his words are very clear . You have only one life and live as per your wish and for yourself. We have spent five years in understanding what we should have understood while starting out. Our story is an mirror to people who start without planning and the cost we have incurred by following the passion and gut feeling. The passion has brought us to this stage now its the cool head that will help us to cross this stage. We have burnt our stairs that has helped us to rise much and there is no other option than to go up and up. Now that I have blurted out my feelings and I am feeling better. We know the revenue targets for getting the profit and repaying the loan. We have done revenue of 80 lakh in two entities till now in this year. We hope to cross 2 crores sales in 2 entities with keeping the same cost and next year we may cross 5 crores sales in two or three entities while increasing the cost to 10%. Then, we will cross the stage and will be in position to celebrate. We atleast now know where we have to go to become better. We seek all your prayers and blessing for achieving our goals and making Bihar Proud. I would end with Mark Twain quote "Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover." Jai Bihar !!! Jai Bharat !!! Best Wishes to all of you Dr Ravi Chandra

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