Case Study on Entrepreneurship: Rashmi Garments

Mrs. Rashmi Agarwal, who is a post graduate in Economics, has established Rashmi Garments, in May, 1987, by installing two machines – one her own and the other purchased from a local dealer, with a total investment of Rs. 20,000. The idea of starting her own business came in 1984, when she saw an advertisement in the newspaper for a one month Entrepreneurship Development Programme (EDP) being conducted by the Small Industry Service (SISI), Okhla, New Delhi. She learnt how to start her own venture.

Feeling encouraged, she decided to start a garment unit as she had learnt something about garments during her school days. In order to add to her technical know-how, in 1985, she enrolled herself for a two-year part time course in Fashion Designing with the Young Women’s Christian Association (YWCA), New Delhi and completed the course in 1987. In the meantime, on the advice of her husband, she applied for a shed to the Director of Industries (DI) Delhi. The shed was allotted to her in Oct, 1986 at the Flatted Factory Complex (FFC), Jhandewalan, New Delhi. Due to lack of sufficient space, Mrs. Rashmi Agarwal, who had been earlier living in a joint family, had shifted to her newly constructed house at Vikaspuri 25 km away from her unit.

Mrs. Rashmi Agarwal, has two school going children – a girl and a boy aged seven and four years respectively, and they were admitted to a school in Karol Bagh near her unit, so that she can take care of them after they returned from the school to her unit. Mr. A.K. Agarwal is a Post graduate in M.Sc (Chemistry) and working as a Circle Officer with the Delhi Administration. He had witnessed an event in his neighborhood, where a young widow had been ill-treated by her in laws. This had left a great impact on him and his interest to see his wife Mrs. Rashmi Agarwal, do something outside home turned into his determination to make her economically independent. During the initial stages, since Mrs. Agarwal’s  unit was not in full production, workers were unwilling to join as they were unsure about the units’ survival. After a great deal of effort she was able to get through the local machine dealer, one worker at Rs. 1,000 per month.

Mrs. Agarwal’s initial strategy was to approach the customers in the local market with sample pieces of her items. The response was not encouraging, despite her offering 10% less than the market rate, the dealers and shopkeepers were unwilling to purchase her items. Mrs. Agarwal, then decided to supply the items at cost price. This proved successful to get an entry into the market. In the next month, she was approached by three dealers who placed orders with her. Thereafter, she was approached by three more dealers. Taking this an opportunity, Mrs. Agarwal had decided to sell her items at 10% -15% profit. This was acceptable to her old as well as new customers. She then employed three more workers and added two more machines to her unit for meeting the demand of her customers. In the initial couple of months it was difficult for her to cope with the customer’s requirements regarding the type, size and the quantity of the items.

In the month of April 1988, she was approached by two customers from Jammu & Kashmir land Allahabad (U.P.) with orders. When the items were supplied through a bank, the customers refused to accept then. Then, her husband had to go to get the items back.

Mrs. Rashmi has reinvested more than 70% of the profit into her venture. Gradually, her total investment rose from Rs.20,000/- to Rs. 40,000/- and the turnover also increased from Rs. 5,000/- to Rs. 60,000/- PM during the same period. She now had eight workers including one cutting and designing master and eight machines in her unit and there were more than ten customers in the local market. She always took care of her workers and was ready to help them any time, however, she did not get their help at the time of her need. The workers would always turn up late for work even when the customer’s demand was high. This created tension in her mind. Her workers said that she was always ready to help them at the hour of their need and that was why they used to work till late in the evening and some times even on weekly holidays, however, at the same time, they also had their personal problems and limitations.

Mrs. Rashmi thinks that her total involvement with the unit had left little time for her to look after her children properly. Mrs. Agarwal used to participate with her husband in the discussions with the customers. This increased her confidence in the marketing activities. In the absence of her husband, she had begun to take the decisions. Thought the market demand for Rashmi Garments, is increasing, yet Mrs. Rashmi Agarwal is finding it difficult to cope, due to lack of space and manpower. She thinks of expanding her business and at the same time she would like to spend more time at home with her growing children. She is to decide which way to go first?????


Q1. Critically evaluate Mrs. Rashmi Agarwal as an entrepreneur, on the basis of the information given in the case.

Q2. What were the key factors responsible for the initial growth of Rashmi Garments?