How a banker on her maternity break rediscovered her childhood passion and turned it into a startup profitable from day one
After earning her MBA, Sunehra Koshy started her career with HSBC, becoming an assistant VP in the six years that she spent with them. With the birth of her son in 2009, and a daughter two years later, she had to take a break. She was by then 32 years old and more convinced than ever that the corporate world wasn’t for her. “It was gratifying to be with my kids full-time, but I also needed something outside the family to keep me mentally stimulated,” she says.
Banker to crafter
Sunehra returned to a hobby she had loved as a child but couldn’t revisit while pursuing a banking career. “I had become a paper crafter and I was enjoying it tremendously. I had found myself a childhood hobby that I could pursue as an adult and it was so much fun! I was learning new techniques, trends and styles in paper craft. I found a whole community of online paper crafters in India and abroad, people who shared my passion and became my friends. I was constantly watching tutorial videos and exploring how to use different crafting tools and accessories. It became a passion bordering on an obsession for me, and I would craft any chance I got,” she says.
The more she crafted, the better she got. Eventually, she ran out of places to store her creations, though she kept gifting them to family and friends often. Finally, she resorted to holding an exhibition showcasing her paper products, as more of a space clearing strategy than anything else, and was gob smacked when everything sold out. She also kept receiving orders for and enquiries about her work.
All this positive attention was the boost she needed to start up. “My kids were now five and two and a half – young enough to still need me at home but old enough to allow me enough time to work from home. After getting so addicted to crafting, I knew that my banking job was a thing of the past, and that if I were to start working, it would have to be something creative, and preferably in this area. The thought of becoming an entrepreneur and creating my own business was tremendously exhilarating!” she exclaims.
Starting up
In April 2014, after two years of dabbling with paper and scissors, she took the final plunge, and Crack of Dawn Crafts was born. Being a mother to two kids under the age of five, Sunehra’s time wasn’t her own to commandeer. So she worked once her kids were in bed and kept crafting till the crack of dawn. That’s where her startup draws its name from.
“My vision was to create a truly memorable experience for all special occasions. Whether it was a birthday, anniversary, baby shower or wedding, my goal was to create original, unique and very attractive invitations, gift boxes and decorations, designed to make that event an extra special experience for all involved. Apart from the celebration aspect of the special occasion, I also wanted to get into the gifting aspect since I had a wonderful range of handmade gifts like albums, scrapbooks, wall décor, elaborate cards and more,” she says.
Profitable from day one
Sunehra wasn’t concerned about giving up her job because her husband was working full time. But she knew she couldn’t afford to mortgage her children’s future for her startup and hence couldn’t stake major funds in her venture. “A key aspect of my strategy was the payment model. I only began work on a project once I received 100 percent payment in advance. I would get an order, receive the payment and only then fulfil the order. Consequently, my money was never tied up; I never had an overwhelming amount of stock to clear or payments dues to collect. I was profitable literally from day one,” she says.
“We are mostly self-funded, operating with funds generated from sales. Since we don’t maintain any stock and only undertake production when a payment is received for an order, we are able to operate within our cash flows,” she adds. At the beginning of her journey, she put Rs one lakh of her own savings into the business. At the beginning of the second year, when Crack of Dawn Crafts was on stable footing, she took a loan of Rs five lakh from her father to fund her scaling plans. “I am still in the process of spending that,” she reveals.
Explaining her low overhead business model, Sunehra adds, “We are the manufacturers, distributors and retailers of our products, and we only sell our own designs and creations. We also allow other retailers and distributors to sell our products, but we don’t sell anything that is created by someone else. Further, we have a zero finished goods inventory as we are a made-to-order business, where we store just seven days’ worth of raw material; we never have the need to discount to liquidate stock.”
There have been several momentous landmarks for Sunehra since she launched her venture. “We were over the moon when our work began to be noticed by celebrities. We have supplied our products to well-known figures from Bollywood as well as leading industrialists,” she says. She’s had thousands of customers, thirty percent of whom return. But none of these can match up to her growth stats once she began listing on leading marketplaces like Amazon, Snapdeal and Flipkart. “Suddenly, we had a brand new sales avenue that was bringing us revenue like we hadn’t seen before. The growth in revenue from marketplace sales was phenomenal - over 300 percent in just five months!” she exclaims.
Sunehra had closed her first month of business with sales of Rs 40,000. “We closed the year 2014-2015 at Rs 20 lakh. The next year, our revenue grew by 40 percent, and this year, with all the new channels that have opened up, we exceeded that figure by March 2016,” she shares.
Sunehra attributes this success to the exploding gifting market in India, which is valued at $30 billion. “I consider my products quite unique; they don’t quite fit into any single industry. That’s part of the reason why I think I have been successful, as there isn’t really anyone else like me out there,” she says. In the first year, her customer base grew by 125 percent. “This year, in just six months, the growth in customer base is already 75 percent over last year’s figure,” she says.
One woman army
The Crack of Dawn Crafts team is all Sunehra. “All our products are designed by me, all marketing efforts, all purchasing decisions, customer interaction and any other leadership role are handled by me,” she says. “The five girls who handle production are all from under-privileged backgrounds, each with their own set of personal difficulties, so I am happy to offer them employment so that they can support their families.” She cherishes these girls, but is also envisioning putting together a skilled, functional and enthusiastic core team, with each team member handling one of the different functions that she performs now. This will grant her more time to focus on designing newer and more interesting products.
Not that the Crack of Dawn Crafts repository is lacking in interesting products. Apart from its regular repertoire of birthday, anniversary and special occasion giftables, Sunehra’s customers nudge her imagination along once in a while. She shares, “Once I got a call from a very quiet and modest sounding client. She wanted an explosion box for her husband. But she said, ‘Can you add some ‘vouchers’ inside?’ I asked what kind of vouchers. She said very shyly, ‘Romantic vouchers.’ After a giggle or two, I figured out what she wanted and I added a few like a ‘Sex Voucher’, a ‘Free Back Massage Voucher’ and so on. Today, that is one of our top selling products on the marketplaces, so much so that we have designed quite a few variants of it.”
Variety is the spice of life for Sunehra’s business. She has done it all, from the regular princess and dinosaur-themed birthdays to a recent Paris-themed birthday to decorating a restaurant in Chennai with Kabali-themed products to celebrate the Rajnikanth movie’s release.
Challenges
Sunehra’s journey hasn’t been completely rosy though. She says that transitioning from a high powered corporate environment to a highly creative one was fraught with difficulties for her. She had to learn everything from scratch and be her own teacher. She was too inexperienced to handle the growth surge that came her way. “In our first year of operations, revenue each month was growing rapidly until October 2014, when it crashed by half. I was shattered! I had just moved into a studio space two months earlier, and I had taken on additional staff and purchased a new computer. My cash situation was poor since I had just made all those investments. It was my first big setback and it really tested me.
“I studied my promotion plan for that devastating month and realised that I had only focused on promoting one product category, while ignoring everything else. I quickly corrected this and everything was back to normal by the next month,” she states. “Honestly, I love everything about being an entrepreneur and there is nothing I really dislike. What is challenging is that you have to be on top of everything all the time. If you drop the ball on one aspect, you pay a price,” she muses. Being a one woman team, this can be exacting in the extreme.
Just go for it
But Sunehra has emerged as a time-tested businesswoman from her ordeals, and her advice to fellow entrepreneurs reflects this- “Be prepared to work harder than you ever have before. Be ready to have little or no income for three to five years. Get your family and support group completely behind you. And then just go for it!”