This is the second part of a 3-part series
Deciding on the Asset Ownership Model was a strategic and important choice for us at IndeCampus Student Accommodations.
Three factors which unequivocally led us to choose the Asset Ownership model are Design, Compliance & Scalability of our venture. Let me elaborate on the first aspect:
In this part I discuss about the second aspect, Compliance:
From the very beginning we wanted to create a long-term sustainable business and thus Compliance was amongst our top priorities. Many entrepreneurs in their need for speed throw caution to the wind and set off about making a working prototype which have challenges on legal and taxation aspects. This is at times romanticized and eulogized by many startup gurus and also perhaps ingrained in our very Indian mindset of “Jugaad”. It was indeed the priceless collective experience of our team in Real Estate Financing and Development which led us to stay clear of any such red flags. It is my advice to upcoming entrepreneurs as well as investors that Legal and Tax creativity almost always leads to project failure.
Obtaining timely Municipal Approvals and Permissions are the most important part of a Real Estate project and while we were not spared the pain and the proverbial delay, we were well guided by Engineers, Members of Approval Committee and various Government Departments once we were able to convey to them as to What and Why we were building at IndeCampus Doon. We received many insights which helped improve project efficiency. It is my belief that we have very competent and intelligent personnel in the Municipality and other Departments and their knowledge and expertise is of great value. As entrepreneurs we are only to gain if can get them to contribute their wisdom.
We have incorporated many elements from Europe and US markets to make IndeCampus at par with global standards. One such feature is a lack of balconies in Student Accommodation in Europe and US. We wanted to understand this better and we only fully appreciated it when we realized that lack of balconies not only leads to a space and energy efficient structure but also most importantly it prevents any untoward incidents like students accidentally falling off of attempting to jump off. To this end, all our windows too are bracketed and won’t open more than 30 degrees.
I would like to share a pleasant experience that I had when we wanted to understand many operational aspects of the Student Housing Industry. We contacted many European and US based Student Housing organizations and spoke to their Design, Operations and Compliance teams to understand the intricacies of the business in greater depth. I strongly encourage my peers in the competition to not hesitate to reach out and ask for help. I found much to my surprise that even large organizations were open on knowledge sharing and we obtained many insights from their experienced teams.
One very practical insight that we received was to design the Spaces at the Backside of the buildings properly. The normal tendency is to neglect the backside of the buildings and this leads to the backside of the buildings being used as a de-facto garbage dump or for surreptitious smoking and other unseemly activities. We were instead advised to ensure that the backside of our building is well lit in the nighttime too and to landscape and even put garden furniture in the space. This ensures that firstly no unseemly activities happen and secondly the space is well maintained and actually utilized for informal meetings or for quiet contemplation by our students.
Setback Spaces from the boundary walls seem wasteful on first glance to a layman, however one appreciates this statutory requirement when one realizes that in case of fire the Setback Space is required for the Fire Truck to access the building from all sides. Fire Compliances are of utmost importance to ensure safety of residents and staff in the building and need to be complied in full in all our projects.
For Investors, adherence to Financial Compliances and Financial Discipline provide an insight to the financial health of the organization. We were helped in great measure by the de-monetization done by the government and our frequency of cash payments has now reduced as we are paying our local nursery by online payments for seeds too! We file all IT, ROC and other compliances on time and while we do grumble and feel frustrated that the cost and effort of compliance is too high, we are hopeful that we will get a far greater benefit of being Compliant in the days to come.
It is my belief, that to build a resilient and modern Student Accommodation business, we need to make our organization to be a responsible corporate entity. We need to be cognizant of the need and logic for the Rules & Regulations and engage constructively with the government departments to deliver projects which are consistent with the local, state and national Rules, Regulations and Policies. If we can synergize the strengths, energy and vision of our teams with the repository of knowledge in our government departments, we will be able to create truly great businesses.
To be continued with the 3rd and concluding part…