Yechte Consulting sincerely wishes to all our colleagues, partners and followers a happy Christmas and prosperous New Year 2013.
Yechte Consulting, a global provider of AEC and IT digital services, expands in India by opening a new subsidiary in Bangalore. This will help us grow our teams and extend our business offerings for the domestic and international markets.
Why did you think of India as an entrepreneurial destination?
The rapid development and surge of India as a major economic player on the global stage has echoed in business circles in the West for several years now. The nation’s young profile (not in history but in terms of workforce), combined with its huge pool of talent are attractive factors for any young entrepreneurs. My native passion for Construction and Information Technology, coupled with Indian contacts I worked with, has naturally attracted me to India.
How has working out of India been beneficial to building your business?
What are the unique inputs/facilitating factors that your business has leveraged here?
Simply put, our whole business model is based on operating from a developing country. Our model would not have been viable from within Europe. So in this regards, the Indian context is essential for our business planning and growth. It is essentially giving us the ability to reduce the cost of our services, be extremely competitive and to offer additional resources. The huge domestic market represents potential for longer term growth. Interestingly, the Indian context has also enticed us to expand our business propositions, offering a wide range of services that we weren’t even promoting at first.
Can you give us an idea of the challenges, the difficulties faced in doing business in India?
To my surprise, the biggest hurdle for me to conduct business in India isn’t cultural. The biggest difficulty faced is to find a network of reliable contacts for asking questions and getting the right information. For many westerners, India seems disorganised and un-institutionalised.
Your business is also focused on reaching some of the most under-served segments of the market - how much more challenging has this been - any anecdotal examples to describe your experiences?
Our business is focused on SMEs primarily, as it represents the biggest segment of the market and also because most SMEs are companies that still have to experience and enjoy the benefits of outsourcing; the big players have been doing it for years. As western economies have become stale in recent years, SMEs are the ones most targeted by this downturn.
We have realised that many SMEs have a psychological apprehension to embrace new offshored business models, due to the fact that most of them don’t trade globally yet, and therefore are not used to work with companies in foreign markets. As a company It is our mission to overcome this problem; we work hard to make ourselves available “ears open” and make the workflow as fluid as possible. Based on our commitment to quality and international standards of our deliverables, we ought to fill the cultural gap between different markets.
Some European SMEs were offended when we approached them, because they thought we were trying to steal their jobs. If anything, we are actually trying to collaborate to boost their productivity and help them retain their jobs!
There is much talk of the intersection of social good and for-profit businesses - how do you view the growth of your company from this perspective?
Social Entrepreneurship runs a long way in India. The Indian market creates unique scenarii for innovative business models and pursuing social justice. Our ultimate company ethos is to grow organically and remain commercially sound, while contributing to develop the social context we operate from. That implies working with local communities, collaborating with charitable bodies, recruiting talent at the door steps of universities, sharing knowledge with similarly-minded companies, launching new ventures with aspiring Indian entrepreneurs, as well as empowering our team members.
Longer term, we aim to become a catalyst for multicultural collaboration – poised to create opportunities for western companies to benefit from the Indian context, whilst opening doors for up-and-coming Indian designers whiling to work on projects in western markets.
Does selling to the poor offer a large scalable business opportunity?
Are there examples/illustrations that you can offer from the experience of building your company?
The “Bottom of the Pyramid” represents a huge pending opportunity for businesses operating in emerging economies. It is arguably an essential component of the Indian engine. Hundreds of millions of people live with modest means, but represent the larger piece of the consumers’ pie.
By working with charitable organisations that operate at the lowest levels of the pyramid, we have started an initiative for our clients to plant trees in the state of Karnataka, around greater Bangalore. This incentive offsets some of our company’s carbon footprint, and we are hopeful to become carbon neutral by 2012. This has generated positive reactions from some of our clients; by working with us, they can save time, money and combat climate change.
How much has doing business in India helped define products/business models that your company can take to other emerging markets? Any examples?
Emerging markets present unique business patterns, in terms of need, revenue model and saleability that are quite different to conventional old pastiche models. Emerging markets offer different societal constraints, which in return, creates opportunities for new models.
For example, in emerging markets, not everybody his connected to the internet, however mobile phones are affordable and widely used. So mobile phones represent a unique medium for consumption, transfers and transactions. Some of the ventures we have launched in East Africa could, with minor customisation, be suitable for the Indian market, and vice-versa. So for each new venture we work on, we try to tackle solutions from a wide and scalable perspective, while respecting the authenticity and sensitivities of the local market.
Do you expect to see more expat entrepreneurs such as yourself building businesses out of India in the future?
As India opens up economically and socially, coupled with a softening of the laws and regulations, it will inevitably become home for more foreign entrepreneurs. Already we are observing a shift in perception, as India is recognised as an engine of growth in Asia after decades of economic stagnation due to poor management and uneven commitment to tackling corruption. And this transformational phenomenon will only be accelerated, the faster India’s economy opens up to other markets.
What are the sorts of businesses that you expect will be built out of here? And why?
The Service and ITeS sectors will continue to be essential to the growth of India, accounting for at least 15% YOY growth till 2020, according to moderately conservative studies (source: LSE). Tourism, Hospitality and Leisure industries are still lacking and way behind in India and we’ll observe dramatic improvements in the coming years in those sectors, as well as a sustained growth of the wider construction industry.
What is the reaction from investors - angel, venture capitalists to such business models - where expat entrepreneurs seek to build business in markets such as India?
We haven’t sought the financing back up of Angel and Venture Capitalists so far, simply because we believe in a slower more organic growth model. However, those that have approached us seem at first puzzled to see western entrepreneurs running businesses in India, but as we expose our vision and longer term ambitions, they all seem to share our views. Once our mindset on global goals is exposed, they all seem to agree with our positions and practices for business.
What are the networks, ecosystems that you have connected with in your entrepreneurial journey and how have they helped?
Since our inception, we have been affiliated with the Royal Institute of British Architects (RIBA) in Europe, which gives us international exposure and credentials, and helps us on achieving “best practice” procedures. Locally, we have approached the entrepreneurship cell of IIM Bangalore and have attended numerous networking events and brainstorming sessions with Indian talent. We have also actively collaborated with “Jaaga”, a community-led social incubator that is a wonderful place to meet talent and share ideas, essential for the growth of our company.
Source: Economic Times
Up to 20 firms bid to buy stricken firm before knot tied with Canadian company Ingenium
Archial was rescued from the brink of total collapse thanks to a lightning-quick deal, with up to 20 potential buyers being whittled down to one in just three days.
The firm announced on Tuesday that it had been bought for an undisclosed sum by privately owned Canadian business Ingenium, a move which Chris Littlemore, who has been retained as Archial chief executive, claimed would result in a “bright future” for the company.
The remarkable level of interest shown in Archial means that, in less than a week, it has gone from the peril of being in administration over millions of pounds-worth of debt to being part of a larger international and multi-disciplinary firm with all 340 UK staff retained on existing contracts.
But the deal thrashed out by administrator PricewaterhouseCoopers will not be such good news for creditors; and shareholders – who received an upbeat trading update from Archial in May – will not receive a penny.
Partner at PwC and joint administrator, David Chubb, revealed he had been handling “15-20” companies bidding to buy Archial last Thursday with the parties involved working through Sunday night to close the deal with Ingenium, the latest in a string of Canadian firms to buy up British practices.
“We had terrific interest,” he told BD. “It was a really good range of industry players. On Friday evening we had a shortlist of five. We later brought that down to two bidders which we looked at through the weekend.
“Circumstances dictated the speed but I would say this couldn’t have gone much better. We had immense challenges last week keeping the business alive in administration.”
It also emerged this week that the founder of Archial’s predecessor SMC Group sold his shares at the beginning of the year.
Stewart McColl had a 3.5% stake in Archial, but sold all 8,399,689 shares on January 28. At the time, the share price was 7 pence, giving his sale a value of £587,978.23.
At its peak in 2007, Archial shares traded at £1.89 but had fallen to 1.5 pence when they were suspended earlier this month.
Prior to going into administration, Archial was involved in at least four legal claims against debtors over unpaid fees, including one against construction and oil tycoon Ian Suttie.
The one part of Archial not acquired by Ingenium is the Sparch Asia arm, which employs around 60 people.
Current Archial projects include much of Birmingham’s BSF work; London’s 251-room Puddle Dock hotel; living quarters and leisure facilities for construction workers for a new Total E&P UK Limited gas processing plant in the Shetland Islands, the £46.5 million Plymouth Life Centre and Alsop Sparch’s newly completed Michael Faraday nursery and primary school in south London.
Archial has been put into administration and is up for sale just days after it suspended trading of its shares.
It emerged today that the listed London-based practice, formerly known as SMC, was unable to agree repayment terms over unpaid tax owed to HM Revenue & Customs and appointed joint administrators David Chubb and Graham Frost of PricewaterhouseCoopers, who are now seeking a rapid sale of the business.
Chubb said: “In response to changes in market conditions, Archial Group PLC had taken a number of steps to improve operations and to develop a sustainable and profitable business going forward.
“However, due to difficulties in meeting the group’s financial obligations, the directors have concluded that various companies in the Group, including Archial Architects Limited and Alsop Sparch Limited, should be placed into administration to protect the business and assets. “
On 26 August, the practice, which employs 400 staff worldwide including around 200 architects, announced its full year results would be “significantly below market expectations” as a result of the unpaid tax.
A previous update in May by the firm - which is led by chief executive Chris Littlemore - said trading for the first four months of the year was in line with management expectations. It had forecast to make a pre-tax profit this year of £3.4 million on turnover of £30.5 million.
Earlier this year, Archial started work on a £27 million mental health facility in Dumfries and in May the practice, one of two listed on the London Stock Exchange’s Alternative Investment Market (AIM), said it had £60 million worth of jobs in the pipeline.
Archial suspended trading of its shares this afternoon, pending “clarification of the company’s financial position”.
The news, which comes just weeks after its share price tumbled 61% following negotiations with HM Revenue & Customs over unpaid tax, was announced on the London Stock Exchange.
The full statement reads: “At the request of the company, trading on AIM for the under-mentioned securities has been temporarily suspended from 17/09/2010 15:15 pending clarification of the company’s financial position.”
On 26 August the practice announced its full year results would be “significantly below market expectations” as a result of the unpaid tax.
A previous update in May by the firm - which is led by chief executive Chris Littlemore - said trading for the first four months of the year was in line with management expectations.
It had forecast to make a pre-tax profit this year of £3.4 million on turnover of £30.5 million.
Earlier this year Archial started work on a £27 million mental health facility in Dumfries and in May the practice, one of two listed on the LSE, said it had £60 million worth of jobs in the pipeline.
The man in charge of Jefferson Sheard Architects (UK) Limited when it plunged into administration earlier this month has said he was forced to take the action because its bank refused to lend it any more money
Tom Jones admitted he had been stung by the criticism levelled at him and his two fellow directors by former employees after they set up a new company, Jefferson Sheard Limited, just over two weeks after axing 45 jobs on July 12.
The company appointed insolvency expert P&A Partnership on August 11 after its bank, the Co-op, froze its account and cut its overdraft limit by £100,000. “The balance we owed was still above the new amount,” Jones said.
Ex-employees are incensed that missing wages and redundancy pay have still not been paid six weeks after they lost their jobs, claiming the company only put them in the picture when BD revealed details of their plight.
Jones said the firm had been caught out by last year’s Learning & Skills Council debacle – which saw a host of planned college projects dumped when it ran out of money – and the government’s decision to scrap the BSF programme. But he admitted: “I understand why people are angry. We could have given a proper explanation from the beginning. The situation overwhelmed us but there have been a lot of lessons learnt.” He said the scale of the conditions being imposed on the directors in return for the bank to extend its credit facilities – including putting their homes up as collateral – were too draconian. “We approached the bank in spring but we were asked to provide a huge security that was beyond the limit of what the directors were able to provide.
“The BSF decision took away our confidence in the future and as a consequence the directors weren’t able to agree to the onerous conditions for refinancing. The bank froze our account and we literally could not pay our staff.”
The new company employs close to 20 people from offices in Sheffield and Peterborough but around 30 have not been rehired – with many set to miss out on full redundancy payments. Administrator Christopher White said employees made redundant would only be able to “claim some of their entitlements up to certain statutory limits” via the government’s Redundancy Payments Service.
One ex-staffer, who is owed £2,000, said: “I’m only going to get a proportion of what I’m owed and they’re setting up a new company.” Another – owed £3,500 – said: “It’s not an ideal situation to be borrowing money off people because the company has let me down.”
Service helps employees made redundant
The Redundancy Payments Service, administered by the Insolvency Service, was set up in 1996 to make sure employees whose employer refused or could not pay redundancy received some compensation.
Payments for ex-employees are worked out on a case-by-case basis using a sliding scale formula which is, according to the Insolvency Service, “based on their age, length of service and contractual earnings up to a maximum limit which is currently £330 per week”.
Money paid to employees left out of pocket is paid from the National Insurance Fund and when payments have been made the RPS becomes a creditor and seeks the return of the money as part of the administration process.