MAM
What agencies need to do for their clients
GOA: Often clients are in a quandary when it comes to partnering with an agency. A session at Goafest 2016 organized by AAAI and the Advertising Club attempted to shed light on some of the factors that a client needed to look at when it came to a business partnership with an advertising agency. The Industry Conclave presented by Discovery Channel discussed the key elements that needed to be focused on when it came to what clients as well as agencies needed to do.
The topic of the day was ‘3 things the agency can do better’ with the speakers discussing client agency partnerships while highlighting some of the possible avenues where such partnerships could be strengthened by the agency.
Setting the tone for the discussion was Mondelez India MD Chandramouli Venkatesan who spoke about what agencies could do to make strong partnerships. Underlining four factors that were important for a better client-agency relationship, Venkatesan said that they included providing complementary strengths in addition to shared purpose and passion, trust and friendship. Inspired by the partnership between the famous duo Jay and Veeru in the Bollywood blockbuster Sholay, Venkatesan said, “It takes effort to create a partnership like Jay and Veeru. A partnership is a two way street. You get back exactly what you put in it”.
He further discussed the three key things that agencies could do for better partnerships. Outlining the importance of generating trust in this two way process was the main focus point which was the bedrock for honest and open communication. “Trust enables cutting-edge work. Trust is actually what enables the brave decision making you so often want to make,” he further added.
Citing examples of the risks that were taken by his company with three of its clients’ ads, namely, Cadbury Gorilla, Bournvita Taiyyari and Cadbury Dairy Milk Silk, Venkatesan said that his company believed that risks could be taken when there was trust in the relationship. The three main aspects required to earn trust were mainly through better decision making while keeping the client interest in mind; by being commercially responsible; and by not compromising on integrity.
To win the talent battle, agencies had to disrupt their talent model and must attract the best talent. “Ideas are temporary, talent is permanent. Talent gives rise to new ideas. One of the most important things is to build brand stewardship. It’s about quality and longevity of talent”, he said. “Ideas can work great, but not build stewardship.”
Another important thing that he stressed on was to build strong processes. Preparing for a strategic alignment at multiple levels, building project management capability and a strong team management was what the agencies need to invest in. “Process is a dreaded term in the agency world. Process is an enabler of creativity. Great partnerships always deliver outstanding results” concluded Venkatesan.
While on the other hand, United Breweries Ltd SVP marketing Samar Singh Sheikhawat pointed out that the agency as well as the client needed to know the business. A major part of understanding the client, according to Sheikhawat, was understanding the consumer. “With multiple realities in India, we ourselves don’t understand the entire world as it changes every now and then. Different countries have different business problems and hence different solutions. We have to know our consumers”, asserted Sheikhawat.
With the evolving medium of delivering messages, there was an observable explosion of content leading to multiplication of content and hence amplification of platforms to give out multiple content. Citing the example of how Kingfisher Buzz was launched he said, “With 99 per cent of males drinking beer, we noted that we have to also deliver something to the female population. The biggest challenge that we face is that our product does not deliver to a majority of the population”.
Agreeing with the key points mentioned by Venkatesan, he further added that the agencies need to have creative solutions to the common problems faced by the clients.
With key notes from FMCG and brewery companies, the next speaker on the row enlightened the audience about what an automobile client looked for in an agency. To maintain the status of the favourite hello and the hardest goodbye between the client and the agency, Volkswagen AG head of connections panning, media and international communications Oliver Maletz summed it up succinctly by saying that the agency should be the one entity that the client calls first and hangs up on last. He said, “Agencies need to focus more on thinking harder before becoming true business partners. They should know our business better than us”.
With competitive analysis, industry analysis, suability benchmarks and situational assessment, an agency could identify opportunities and reach a successful goal. “There are more opportunities now than what we had in the past. I think the agencies should be open to take risks”, he added.
He further advised that an agency should not innovate just for the sake of being innovative. It should deliver meaningful value to a meaningful number of people. With agencies approaching clients through a ‘selling’ perspective, Maletz pointed out that the agencies should stop selling their ideas, capabilities, companies, inventories, etc., to the clients. “Start helping us to sell our products and build a better brand. Be our business partner and stop selling yourself”, he added further. He concluded by saying, “Everything will follow with a good business partner”.
The evening of the Industrial Conclave wrapped up with a short panel discussion where the audience was encouraged to pose their questions to the experts via the Goafest 2016 app which had been specially designed to facilitate the best digital experience for the attendees of the festival.
Starting a business is one of the most financially demanding transitions a person can make. In the early months, expenses are immediate and often unpredictable, while revenue streams may take time to stabilise. For first-time entrepreneurs, securing small business loans can feel like a paradox: lenders expect a clean financial track-record before approving a loan, but the business cannot establish that track record without funding. Understanding the start-up lending environment in India and knowing the realistic funding options make this process far less daunting, allowing entrepreneurs to plan strategically.
Why Traditional Business Loans Are Harder for Start-ups
Most financial institutions require a minimum business vintage of 2 to 3 years before approving a term loan. This is because the first two years of operations carry the highest risk of failure. For start-ups less than 12 months old, traditional loan options are limited, and lenders often ask for substantial collateral to mitigate risk.
The vintage requirement is not arbitrary. Businesses that have survived their first two operating cycles demonstrate market viability, which significantly lowers the lender’s risk. Until this milestone is reached, entrepreneurs often rely on bootstrapping, personal savings, or alternative financing to build a stable business foundation. Understanding this reality helps first-time entrepreneurs set practical expectations when seeking funding.
Government-Linked Schemes for Startups
India offers several government-backed schemes to support first-time entrepreneurs. One such scheme is the Pradhan Mantri Mudra Yojana (PMMY), which provides collateral-free loans for micro and small enterprises in three categories:
● Shishu: up to Rs. 50,000
● Kishore: Rs. 50,000 to Rs. 5 lakh
● Tarun: Rs. 5 lakh to Rs. 10 lakh
These loans are available through eligible lending institutions, making them suitable for early-stage businesses. For first-time entrepreneurs, a Mudra loan not only provides initial working capital but also helps establish a credit history. Repaying a Mudra loan on time strengthens the entrepreneur’s profile and increases the chances of securing larger loans in the future.
Using Personal Loans to Fund Early-Stage Needs
When business loan eligibility is not yet established, a personal loan can serve as bridge funding. These loans are assessed on the individual’s credit profile and income rather than the business’s financial history, making them accessible to salaried individuals or those with a strong personal credit record.
Personal loans have limitations: the loan amount is capped based on personal income, and the interest rate is typically higher than secured business loans. Nevertheless, taking out a personal loan during the first 12 to 18 months can provide crucial support as the start-up builds its financial profile. It is especially useful for covering immediate expenses such as inventory, marketing, or office setup costs.
Alternative Financing Options for Startups
For start-ups that are not yet eligible for traditional business loans, other financing options are available through financial institutions. Many lenders offer startup-focused or small-business loans designed for early-stage businesses. These loans evaluate the entrepreneur’s personal credit profile, business plan, and projected revenue rather than relying solely on business vintage. Financial institutions such as Tata Capital provide these loans with minimal documentation and fast disbursal, enabling entrepreneurs to manage operational expenses, purchase equipment, or fund early growth initiatives without pledging collateral.
Some lenders also offer flexible loan amounts, quicker approvals, and streamlined processes, making them well-suited for first-time entrepreneurs. Exploring these options early allows start-ups to access working capital while gradually building a credit history that will support larger loans in the future.
Building the Right Financial Profile Before Applying
For entrepreneurs planning to apply for a business loan in 12 to 18 months, the preparation period is critical. Key steps include:
● Filing Income Tax Returns (ITRs) consistently and accurately from the first year
● Maintaining a clean current account with regular deposits and no overdraft patterns
● Keeping the promoter’s CIBIL score above 750
Lenders assess start-ups by examining these signals. Entrepreneurs who maintain financial discipline from the start will have stronger loan applications after two years. Additionally, tracking cash flow and avoiding irregular withdrawals can further enhance the business’s credibility.
Collateral-Based Options for Larger Requirements
Startups requiring larger amounts beyond government schemes can consider loans against property. These loans allow entrepreneurs to access larger amounts of funding at lower interest rates, as the property secures the lender’s risk.
This option carries significant risk: using personal or family assets as collateral can result in a loss if the business does not perform as expected. Such loans should be considered only when the business plan is validated, the entrepreneur has clear cash flow projections, and the repayment strategy is realistic. Careful assessment of risk versus reward is essential before pledging assets.
Practical Steps to Strengthen Your Loan Application
To maximise the chances of approval, entrepreneurs should:
● Maintain accurate financial statements, bank records, and GST returns.
● Avoid over-borrowing; apply for realistic amounts that match business needs.
● Keep personal and business credit profiles in good standing.
● Explore lenders that offer startup-friendly products.
● Be transparent and complete in all documentation.
Taking these steps early ensures a smoother and faster loan process when the business is ready for formal financing. A well-prepared application reduces processing delays and demonstrates professionalism to the lender.
Conclusion
First-time entrepreneurs often face a funding gap in the early stages, but it is usually smaller than it appears. Maintaining clean banking records, filing ITRs consistently, and exploring personal loans, government schemes, and alternative financing options help build a strong financial profile. Entrepreneurs who plan systematically from day one are better positioned to access formal credit sooner, giving their start-ups financial stability through small business loans.
The ideal time to start building a credit-worthy business profile is the very first month of operations, not when applying for a loan. By understanding available funding options and acting proactively, first-time entrepreneurs can confidently apply for a business loan and set their businesses on a path to long-term growth.
