Tell us more about how you became an entrepreneur, the difficulties you faced in setting up your enterprise?

Although I graduated as a Chartered Accountant, I quickly discovered that practicing accountancy was not my cup of tea. “ I liked to sell ”. I gave up my Tax Practice and started selling. I started my career by selling Merchant Acquisition Terminals, then Credit Cards, then Banking Liabilities, then Pappads, then Ice creams…Four years of selling gave me some fat cheques; but I realised that It wasn’t my calling. “ I was bitten by the entrepreneurship bug but I could not decide on what to start”. Till I finalised on my business domain, I decided to offer some accounting services to people in my locality to meet my financial needs. I started of by calling a few friends and relatives of mine who did some small businesses and offered to help them finish their taxes and accounting. Meanwhile, 5 clients grew to 300 in a year, without a single rupee spent on advertising. It struck me that I was actually standing on the Gold I was searching for. Small and Medium Businesses found it difficult to finalise their accounts month on month and calculate their tax liabilities. In most cases, their CA was a mere spectator. I founded “Reach Tax” with the objective of making Taxes and Accounting Easy for the Small Business Owner. We grew at 30 – 40% every month but had limited resources, Eventually, I built a good team, The right technology for my people to use and set of strict operating processes.

When did you start? How has the experience been so far?
TILL NOW
2006 – I started Reach Tax with 5 Clients
2007 July – Prepared more than 6000 Business Tax Returns in Chennai ( which is roughly 6 out of every 100 returns filed in Chennai )
2007 December – Started 5 Franchisee outlets for Retail Tax Preparation and Accounting.
2008 April – Income Tax Department enables electronic filing of Tax Returns
2009 April – Launched “ Online Tax Preparation Software for Salaried Filers at http://www.reachtax.com/ “ ( which was earlier used inhouse ).
2009 July – Took the help of Morpheus Venture Partners, A “Y Combinator ” style Advisory Firm to Accelerate Business & Build strong Tax Products
2009 October – Started operations in “ Bangalore “

FUTURE PLANS
2010 June – Will launch a “ Online Accounting/Tax Product for Small and Medium Businesses which will facilitate accounting without an accountant” ( which is currently used inhouse )
2010 November – Will start operating in Delhi, Mumbai, Hyderabad, Chandigarh and Calcutta.
Very Soon – Will be India’s preferred Tax and Accounting Software & Services Company.

Why did you decide to focus on tax solutions?
I decided to focus on taxes because:
1. As a Chartered Accountant, I had a Tax Background
2. What I was trying to solve is truly a painful problem for a Startup, Small Business Owner or a Self Employed Professional.
3. I see an unconquered 4000 – 5000 crore market.

Most people find finance a major constraint to start a venture. How was it for you?
I started of with a seed of Rs. 5000/-. Over the years, I have pledged my personal assets and borrowed from Friends to give the necessary mileage to the venture. Often we put our plans on hold, till we generate enough funds from Internal Accruals, however I also believe that it is good to evolve this way. Financial Constraints provide us a balance between Profitability & Growth.

Have you received funding? Do you have plans to approach VCs?
We haven’t take funding still. We might talk to VCs in future for expansion plans.

What are the challenges that you face?
We are currently the only organised player in the Tax & Accounting Domain. We have a rare combination of Taxes, Technologies and Tested Processes. Being the First Mover and conquering a New market poses serious challenges for a SMB like ours. We are confronted with problems on New Technology, Consumer Behaviour and Identifying Right Markets, where we are forced to decide with very less research and business intelligence. Making these decisions are even more difficult as any mistake would prove costly for a SMB like ours.

How many people are there in the company? How difficult is it to convince people to join a start-up?

We currently have 55 staffs. We have built the company with people who were willing the learn the required skills, against people who already have the skills. As a start up, it gave us low fixed cost to start with and provided a good learning platform for our employees. We focussed on building a technology driven “ anyone can do taxes “ & “ auto-pilot accounting “product to help our employees do client taxes flawlessly. So I don’t remember an incident where I had to convince anyone to join the company.

How many transactions have you carried out so far?
We process a little over 10,000 orders every year.

How many retail outlets and franchisees do you have?
We currently have 3 Retail outlets, 2 of which are franchised.

Are people more comfortable with e-filing of returns?
No! ( rather ) Not Yet!
Unlike western nations, Taxpayers are not yet comfortable filing returns electronically by themselves. The preferred mode of filing still remains to “ask an expert” to do it for them (which we are currently focussing on ). However the following developments would increase the number of electronic filers:

1. The Income Tax Department has made filing of Corporate Tax Returns mandatory, We can expect Individual filings to follow suite soon.
2. The Income Tax Department has established a independent processing cell for assessing e-filed tax returns and processing Tax Refunds in Bangalore.

We are focussing on the “Expert assisted Tax Preparation” as we continue to scale our Tax Preparation Product for the future.

How is the feedback from people?

The very fact that we have grown on Client Referrals, will speak about the client feedback.

What kind of problems do people face in terms of taxation? How do you sort them?

Being a SME ourself, we could understand the problem of finalising Accounts & Taxes month on month. We had a good accounting software, an accountant and a C.A in control ( me ). But yet we never finished our accounts month on month. So, we could not have the required business intelligence on time and paid penalties which we could have avoided. What we needed was an auto-piloted accounting product with multiple options of input, a good urge to complete our accounts on time and some expert guidance. This was a problem. There was nobody providing a solution for this. I decided to work on this, because I had the necessary expertise to do this.

What other services do you offer?

Apart from Accounting & Tax Preparation Services, We also provide Business Incorporation Services and Tax Registration Services.

What are the most important things salaried people must remember in terms of taxation?

1. Remember to plan your taxes much earlier in advance ( Taxes account for upto 30% of your Salaries )
2. Remember to communicate your Tax Shield Investments to your employer, this could reduce your tax cuts.
3. Remember to file your Tax Returns before 31st of July every year.

You can dowload a free tax guide from http://reachtax.com/tax-guide.html

How do you plan to fight competititon as there are established players offering similar service? What is your USP?

Unlike our competitors, our core business is tax. We understand Taxes better and We will surprise our competitors with customer friendly plugins and addons to the product shortly. We plan to take on the competition by showing the customers some real value addition.
Competition Vs. Reach Tax’s Tax Product for Individuals
Support from real tax people: Unlike our competitors, our core business is Tax. Every member of our support team is a trained tax consultant (against a CSR, who would note down your query and promise to get back to you).
We stand behind our return: We back our tax return through our retail outlets, unlike competition, you can have a Tax Professional explaining your tax computation in our outlets.
Moneyback gurantee: The product we give you is the product we use. If you find an error in the computation (which is not an input error), we give back your fees. No Questions asked.

Competition Vs. Reach Tax’s Accounting Product
Accounting as a Service: We dont intend to sell the software and watch you struggle to do your accounts using it. Rather we send an accountant to your office at predefined intervals to convert your financial data into meaningful accounting information
Free Tax Preparation: We handle it end to end. We prepare all Tax Returns for the Customers who choose our Accounting services, free of cost.
Protection of Source documents: For a small additional fee, we also scan and store you source documents to be retrived in future. The enables you to handle any audits at ease and also protects you from Tax Scrutiny calls.

What kind of tax saving measures would you suggest for the salaried class?

Structuring your paysilps, Making a few Investments, Some Expenses and donations can save taxes for you. However the quantum of savings cannot be personified and will depend on various other factors. You can plan your taxes using the free tool at http://reachtax.com/PrepareTax/TaxPlanner.aspx

How profitable is this business? What kind of revenues do you expect?

With our current Revenue Rate, We would do Rs. 10 million Revenues this year. We have a steady growth 25% – 35% every month. We plan to reach 50 Million revenues next year by continuing to maintain the current growth rate and marginally leverage the revenues with our online accounting product.

How do you sum up your experience as an entrepreneur?

Being an entrepreneur has brought out ” The Creator” in me. I experience the joy of creation by building new companies, new products, new services, new processes and new solutions everyday.

How important is innovation for an entrepreneurship to succeed?

In my opinion, both co-exist. ie) entrepreneurship cannot succeed without innovation in some form. Every day we innovate and provide new perspectives, point-of views and products to add value to the customer or our own company. A good innovator is more likely to succeed as a entrepreneur.

Did you have any role model who inspired you?

I’ve drawn my inspiration from Entrepreneur, philanthropist, Cancer survivor and founder of H&R Block. Richard A Block.

Could you tell us 5 things that entrepreneurs must do to succeed?

1. Quit your Job: Entrepreneurship is full time ( if not all the time )
2. Work your Business Plan backwards : For example, If you sell 1 unit of your product every day then project on what you do ( 30 units/month ) + what more you can do. Don’t fix a guesstimate and try to reach it.
3. Co-founder? : Don’t add one unless absolutely necessary.
4. Hire people who can learn the skills against who have the skills : This also necessarily means that you have enough knowledge of your domain, so that you can train your people to get the required skills.
5. If you want to scale, Build a service and derive a product from it or vice versa : Try this before you think of any other expansion strategy.

What are your company’s future plans? 5 years from now?

In the next 5 years, We will become the preferred Tax and Accounting Partner for Small and Medium Businesses.

How do you spend your leisure time?
I am a simple guy and I like simple things ( or I like to simplify things ). I take a technology break every week (no mobiles, laptops, ipods, television…) and isolate myself with simple things ( like cooking a meal myself, colouring a pic, reading a book…)