• Opportunities

Revulsion can prompt various reactions—and this successful, Rs. 4.2-crore business idea might be the least expected of them. In 1993, Sunil Uplap chanced upon some water tank cleaners in Pune and saw one of them spitting into the tank. That’s when Uplap—an engineer by education and a marketing executive by profession—felt a strong need to change the unhygienic ways in which tanks are ‘cleaned’.

The idea stuck. In 1999, Uplap started Tanclean as a proprietary venture with a personal investment of Rs. 2 lakh, incorporating it in 2001. The business is simple: cleaning water storage tanks for domestic residences, commercial spaces (like malls, hotels, offices, etc.) and also municipal storage tanks. But the
methods used are a far cry from the conventional scrub and clean methods used in India. Uplap uses modern, sophisticated washing tools he ordered from German company Kranzle for a six-step cleaning process.

Rapid urbanization opened up a huge opportunity for such a business, due to the increasing need for storage. But even though the business opportunity is (conservatively) estimated to be Rs. 2,000 crore, there are no big or organized players in the segment. The lack of competition compels Uplap’s company to spend 70 percent of their time educating clients about the need for such services.

The path to success hasn’t been as sludge-free as the tanks he renders clean. For starters, the social stigma attached to cleaning jobs in India meant none of his business partners—all engineers—agreed to give him company with Tanclean. Also, people were not eager to get their tanks cleaned at a higher price, notwithstanding the enhanced hygiene quotient of the service offered. “That’s the problem of not prioritizing hygiene in this country,” Uplap laments. “People accept such ideas only when they become a vogue in the West.”

Uplap started by convincing friends and relatives to try the service, depending solely on word-of-mouth publicity. Funds were a problem, which led him to think of the best possible way to tide over issues of finance, management and reach: franchising. However, being a relatively new concept itself at the turn of the century, franchising was not the easiest way out. “For many years, I worked on negative capital,” Uplap admits. He had to convince a relative to take up the first franchise in 2000.

The franchising fee gave Uplap the money he needed to scale up and buy more equipment. For the first six years of the business, Uplap focused on developing his franchise network. Tanclean charges Rs. 3.2 lakh as franchisee fee for a contract of three years and an additional monthly royalty of Rs. 2,000 for Class A cities. One set of equipment can take care of 150 tanks. A franchisee also requires a car to shuttle equipment around, a computer and a phone, bringing the cumulative investment up to Rs. 6.5 lakh.

With a 60 percent return on investment and a seven month break-even period, Uplap now has 324 franchisees in 104 cities across 23 Indian states. Through them, Tanclean scours nearly 1,200 tanks everyday; but their operations are limited to the residential segment. Thane resident Sharmila Rane, a Tanclean franchisee, bought her first set of equipment in June 2006 and has already procured her third set, servicing 350 water tanks in that area. Women franchisees like Rane are queuing up, as they have easier access to clients’ homes—a good bet when it comes to extending the network.

Getting manpower for cleaning work is not difficult. Uplap prefers fresh, unskilled labor, as they are easier to train. The focus on direct business, largely comprising government contracts, increased over the last three years. These are tended to by Uplap’s own team of 36. The first government contract came from the Ulhasnagar Municipal Board: A crackdown on the Maharashtra government for the inappropriate use of agency funds had them flocking to Tanclean for a cleaning contract. However, being accustomed to paying Rs. 2,800 for cleaning storage tanks of capacities of up to 8 million liters, convincing them to pay Tanclean’s charges of Rs. 65,000 wasn’t easy.

But the government contracts paid off. A Rs. 6.5-crore order from the state government of Rajasthan to clean all the tanks at the Public Health Engineering Department in Jaipur, Jodhpur, Udaipur and Bikaner helped Tanclean establish its capability of executing large contracts.

The start of the journey for this 44-year-old, first-generation entrepreneur, though, was modest. Uplap had no financial backing, no prior experience and no guidance on entrepreneurship. He started out the hard way, working with a packaging company from 1985 to 1993 to develop managerial skills and business contacts.

In 1989, he and two of his friends started Pyramid Enterprises, a marketing company for gear boxes, pumps and other machines. Working on this venture part-time while retaining their day jobs, the trio finally came together and became full-time entrepreneurs in 1994, setting up two more companies: Pyramid Flexipacks in 1994 and Sun Converters and Engineers in 1997.

However, after tasting initial success, the businesses fell upon bad times due to a recessive industry. The three partners split in 1999, taking one company each with them. “This gave me more freedom to make my own decisions, as things tend to become difficult with business partners during recessive times,” says Uplap.

Flexipacks fell in Uplap’s share with a liability of close to Rs. 35 lakh. Added loans on the personal front put Uplap in a financial spot, but his enterprising nature led him into another business: marketing fake note detectors. With this, Uplap ran three businesses simultaneously—and his latest venture helped stabilize his financial condition. The Flexipacks unit, however, was finally shut down in 2002. In its place, Kanzle’s products were marketed in India through Shubham Equipments.

Optimistic about the future, Uplap has identified 400 cities and towns across India—each with a population of more than 200,000—where he can have at least one Tanclean franchise. With a new customer base growing at almost 300 percent a year and 80 percent of his business comprising repeat contracts,

Uplap has reason to be optimistic. Looking at other related businesses, he has already floated Facades and Ducts, a company that specializes in cleaning glass facades and air-conditioner ducts of buildings. There’s no stopping this serial entrepreneur.

©Entrepreneur December 2009

Tags:
clean, Sunil Uplap, Tanclean, water tank