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Entrepreneurship is a French word, meaning, someone who organizes and manages an enterprise, such as business, with initiative, and at considerable risk.
The last two points differentiate entrepreneurs from managers. Managers play it safe, by the book of policies and frameworks. And their initiatives are also within a certain framework. When managers get into their own business, they do not get into the entrepreneurial mindset. The largest number of failures may be attributed to this basic difference. There are other reasons also which I shall discuss in due course. At this point, I would only mention that 90% or more enterprises have failed within five years. Probably a couple lasted longer, but finally collapsed.
Regional Level Entrepreneurships
There are several regional level marketing setups, such as those operating in Punjab or a part thereof, operating only in Sindh minus Karachi, or operating in Khyber Pakhtunkhwa. Balochistan is mainly Quetta, and most activity remains confined there. There are no names interestingly, and it is so because none has been able to make a worth mentioning impression.
As we saw earlier, everyone started from a regional level, but then grew to cover the whole country. The difference here is that the regional enterprises choose to stay within a region even after expansion. It means that they start very small but expand gradually. Their resources are usually limited, and they prefer to use these judiciously, hence the slow pace.
The regional enterprises are usually started by regional managers because they know the territory personally and claim to have contacts with the key customers. They may start individually, or partner with couple of others.
The success rate of regional enterprises is slightly better than national level ones, but not very promising in the longer run.
Local Level Entrepreneurships
This is an interesting model in Pharma. A medical representative may quit job, get 3-5 products from some master franchiser (people who carry many products from several manufacturers for contracting on small scale), and start working on 15-20 customers. He is focused, works himself, works within small limits, and harbors low expectations. He engages with the customers on a personal level and follows up closely, mostly every day.
Obviously, there are no big names in local enterprises, and there cannot be, but industry people know many cases where medical representatives, or at the most district managers opted to quit job and start their own thing.
This business model has the highest level of success, which may be understood better after we go through the reasons for failure.
Reasons Why Employees’ Entrepreneurship Started in Pharma Industry
I cannot say with authenticity, but I believe that the employees getting into entrepreneurship is higher in Pharma as compared to other industries. Some industries cannot be started just like that, for example insurance, banking, textile, automotives, etc. Even FMCG staff find it difficult to do business in the same industry. Following reasons may be considered why so many pharmaceutical salespeople go into pharma business.
Sales and Marketing Orientation
Sales and marketing people go this way because they already know how to sell. Selling no doubt, is the difficult part. Meeting customers, convincing them, bringing them to own fold, takes patience, follow up, knowledge, and skills. Salespeople believe that if they can sell for their company, they can do it for their own self. They are not entirely wrong, and when they start a local level enterprise, working on their own, they usually succeed. Their stress comes when they try to expand and raise a small team to take their business to next level.
This is a big reason, and the biggest trap. Middle managers and senior managers believe that if they can manage a multimillion (or multibillion) rupee business for the corporate, they can do the same for themselves. Management experience is important, and it gives valuable insight about building and running business, building and running teams, and building and running the infrastructure. Management is the lifeline for a business, and the quality of management determines the future of any business. What management experience does not teach is entrepreneurship, hence the trap.
Ease of Doing Business
The requirements for starting own marketing business in pharmaceuticals are minimal. You do not even need a drug sales license; the distributor’s license can be used.
There are plenty of small manufacturers who are offering their products for contract marketing to small and medium enterprises directly or through master franchisers. There are baskets of fast running products which can still be obtained.
The financial commitment is highly flexible. One could start small with small capital and then keep reinvesting to increase working capital. There is no compulsion to buy a certain amount of stock unless you work with the manufacturer directly, and even there it may be flexible.
Location is of no consequence. The business may be started from home and kept like that for long if it is small scale. However, for larger scale, a proper office and address may be required.
Temptation and Inspiration
Though there are fewer success stories, but these are enough to tempt and inspire. An analogy may be drawn with FB/TikTok where everyone is busy making reels and videos because every now and then, such things become viral and attract millions of views. No one cares about the huge numbers that go into junk every minute. Pharmaceutical business is not so short-lived, but the inspiration is the same.
Fall Back Opportunity
It is a common saying among Pharma entrepreneurs that they would go for their own business and give it their best shot, but if they failed, they would come back and join a job. Many have done so already, and it encourages others to take the plunge while they can. True, that the fallback is there, but it is also an impediment that stops people to do or die for their venture. It reduces the chances of success and increases the incidence of failure.
To be Continued……
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