Last week we talked about the financial benefits of leaving Tier 1 towns and moving to Tier 2 towns. We calculated the savings on accommodation, food, travel, medicine and other headers. Today we will discuss more about the strategic benefits. Tier 2 towns are of immense use to an entrepreneur when it comes to strategic benefits.
Ease of incorporation and banking services
Since Tier 1 towns are usually big, it gets a little tricky to find a place of business and then further getting it registered. In Tier 2 towns however, since the city itself is small, the process is easier. In certain cases where you need clarifications and need to travel to government offices or are required to submit certain documents, travel is convenient in Tier 2 towns and hence the process is simpler. And what about corporate bank accounts? They are much easier to open in Tier 2 towns. Why? Because the same bank in Tier 1 town would require higher bank balance to open an account and to keep it running. A startup may not be able to afford as much.
Easy access to local authorities
In Tier 1 towns, almost every other apartment is booming with startups but this isn’t the case of Tier 2 towns. Consequentially, a startup in Tier 2 town is more valuable than the same in Tier 1 town. You are more important to local authorities as well. They are more approachable for calling down on events. When my startup TBS Planet Comics completed its first year in Jabalpur, we were fortunate to get the Mayor of Jabalpur to visit our anniversary celebration. You can imagine how hard that would have been in Bengaluru.
Employment generation at cities where it is actually needed In cities like Bengaluru, many people take jobs because they don’t like the work in their current roles. In smaller towns like Jabalpur, people take jobs because they need it. There are minimal youth employment options in these cities. So why not as entrepreneurs contribute to employment generation in cities which actually need it. I feel it really sad that youth in most smaller towns have to leave the city and move to Tier 1 towns and have to stay around messy PGs – not because they like it, but because they don’t have any other option if they need a job.
Better wages and stipends
An employee in Jabalpur (with the same skillset) will cost `15,000/month in salary as compared to
`30,000 in Bangalore. Why? Simply because of the difference in his survival costs. Which means you can actually save costs and maybe hire more employees in Tier 2 towns.
If you have any queries, feel free to write to me on Rajeev@TBSPlanet.com
Rajeev Tamhankar
Twitter@rajeevtamhankar
Rajeev Tamhankar is IIT-R Alumnus, Entrepreneur of The Year’17 (Print Business) and the Founder of TBS Planet Comics