Category Archives: Business

Things to Consider On Your Way to a Profitable Startup

There’s a mixed debate on whether startups should be concerned about profitability in their early stages of growth. While most sober entrepreneurs would get behind the debate in support of profitability for startups, the question on resource allocation remains a challenging one.

The matter of fact is, where you allocate your resources as an early-stage start-up will determine how fast you reach profitability – if you get on course to profitability in the first place.

Even though the road to profitability will often differ depending on the form of business you are creating, there are considerations that remain essential across the board.

  1. Is your business customer-funded?

Your industry or type of business notwithstanding, you’ll be better off with a business model that encourages your customers to pay you money upfront. Such a business allows you to finance the development of your product from the revenue so collected.

A matchmaker business for instance is a good example here. The business is funded by customers and the site owner pays the sellers from the revenue collected from the buyers. Notice that matchmaking business model brings together buyers and sellers to the site. You get paid by buyers before you pay the seller, and as such you tend to always have revenue upfront.

Your customer funded business can take the subscription model in which users pay up before accessing the product; or the scarcity model in which the business advertises limited edition products and collects payments from customers upfront before goods are manufactured and dispatched.

  1. Is there a complementary skillset you could get from a co-founder?

It’s good idea to consider for a cofounder someone whose strengths balance your weaknesses out. Otherwise you’ll end up spending quite some cash on sourcing for the skills at the time of need.

You could be a developer who is green in bookkeeping, you’ll need to find a cofounder who can sufficiently plug in that skill gap.

  1. Are there small markets you can dominate first?

Chances are, the big fish are already commanding the bigger markets. Besides, there are economies of scale they enjoy, and they essentially have little difficulty serving these markets.

As a startup, it’s not ideal to target a mainstream market much early in your lifecycle – even if you have a global mindset, there’s so much marketing work to do before you gain enough market command.

In addition, if your startup is funded by a micro loan from banks or alternative lenders like FAM, you’ll want to watch your expenditure so you don’t run out of working capital along the way.

Six Reasons for Availing Certified Business Appraisal

b20The fast changing economic scenario entails companies to keep track of their value for having a better hold on the market. The highly competitive market environment is making the assessment of enterprises fluctuate drastically. Also, you will find many companies that have disappeared from the list few months down the line. Hence, it is crucial to get a certified business appraisal. It will not only serve as a benchmark, but also help businesses in many other ways.

Here are the top reasons why you should get certified business appraisal:

Reporting – You have the responsibility to report the assessment of the company to investors on a quarterly or annual basis. It provides financial health of the enterprise and increases investor confidence.

Fundraising – If you want to raise funds for your business, you would need the appraisal report. It is necessary for both conventional fundraising from banks or for current options which include crowd funding.

Merger or Acquisition – You need a detailed appraisal report of the entire business to enter into any merger, or you decide to sell your business. It is the first step in the whole process of selling. It will help you negotiate a better price.

To Acquire Seed Capital – If you are planning a start-up, you need to determine the value to give investors a reason to raise seed money. A business appraiser values the start-up based on future business potential rather than the current monetary value.

To issue ESOP to employees – If a private company wants to issue ESOP (Employee stock options) to their staff, they need to get the valuation done. The assessment helps them determine the contribution of shares employees can receive annually.

Litigation – It is important to have clear valuation report to face any form of dispute on company assets. The insurance may not cover the loss when and if a business is sued and loses the case. The valuation report makes it easy to come to a decision on selling assets to settle the litigation.

In conclusion, a certified business appraisal is crucial for the worth of the company ultimately depends on its assessment. It is always best to get the report from a certified business appraiser holding a valid license and relevant experience in the field. A report is valuable to find the real worth of your business as well as to know the weaknesses so that you can take steps to correct them, which can increase the value of the firm in the future.

What Is the Definition of Work

b19I have worked for many years all over the world. Ten of those years, I spent in Japan. Work there was always different somehow. It seemed more exciting and fun. I had wondered why. I also saw that the Japanese had a work ethic second to none. After my time was up there, I left, having never really understood why they worked so hard and so well.

After a decade, I returned. This thing called work still plagued me. Was it because of their Buddhist and Shinto cultures? I wondered. It had something to do with their culture and beliefs. But I could not put my finger on exactly what it was.

Then one day I was receiving my change from a convenience store attendant. The attendant was bowing and somehow I could tell she wished me well. It was not a job thing. It was not something she was doing for her. She was doing it for me.

I thanked the attendant and looked at her.

I turned to my wife, who was Japanese. “Can I ask you what your definition of work is?” She laughed, as sometimes I asked unusual things about Japan. I then said that actually I had wanted to tell her what I thought their definition of work was.

She nodded. I then explained the following. “Work is an opportunity, to give back to society, from which one has been drawing upon since birth. And for that, you get paid.” My wife looked at me strangely as if I had said nothing unusual. “Of course,” was all she said.

Then after we left the convenience store she asked what I had thought work was, if it was not giving back to society. I just shook my head. I did not really think we had a real definition for work in the West. It was about bettering self, or something. There was nothing noble in its definition, and as a social function, it often failed.

Later I thought of all the parks I had used, all the roads, hospitals, schools, beaches, clean air, the views from mountains, and a whole lot more. I realised I still had a lot to give back to make up for the wonderful use I had made of this world. This really affected me. I also realised that my work was putting a future society here, so that others not-born-yet, could later pay it back. I somehow feel good about that.

I tell this to almost everyone I meet in the West now. Work is not some self-betterment exercise. It is an opportunity to pay back those who had worked so hard before, putting our society together, here for me, my friends, family and the rest of us. I feel happy that I finally I understand that work is my chance to discharge this great obligation.

I also found something else interesting. I was no longer upset if work took longer. And the money I received for my work seemed far less as important as the work itself. It was all in the definition.

The Rise of the Global Boutique Production Company

b18Production companies working with film and photography have seen the industry change over the course of the 20th century. Once relegated to the mega-studios or individual advertising companies, now it is common to find a production that is small enough in size to serve the individual needs of each of its customers, but able to do so on a global scale. With modern technological advances and partnerships with the right niche contractors around the world, these companies handle every digital branding need for businesses large and small.

Global Impact, Local Service

As industries grow, it’s been common for businesses to evolve into massive corporate entities, with huge staff and presences around the world. While this made it effective for these companies to handle a volume of work, each individual client that they served often lost out on that personal touch that is so necessary to effectively building and maintaining a brand presence. For example, a company looking to target customers overseas may find that working with a large company means they never know who they will be talking with at any given time, while instead, finding a German production company will help them develop the exact right materials to target that market, all with a devoted staff guiding them through each stage.

Able To Handle The Largest Jobs

The benefit of these smaller-scale production companies is that they can handle just about any needed job, wither in-house or through a network of related partner contractors. For example, in the above scenario, the German production company would know the right people – from casting directors to camera operators – to film a video job in the country, without the client needing to leave their home base.

A single boutique production company can handle any print media elements that may be needed for a campaign or event, including ad campaigns, catalogs, and even published interviews or editorials. If it comes to a special cause, a company can help put on an event from start to finish, even something as unique as an art exhibition or fashion show.

Not to mention, a company means that clients are able to access Hollywood’s resources. Whether the goal is to have a particular celebrity endorse a product or an ad, or to cast a group of actors for roles in a promotional video, the production company will have all the means to handle every single aspect, from start to finish.

Size Matters

It can’t be said enough that one of things attracting large-scale clients to smaller, boutique production companies is that they can have more or less of a role in the entire branding or marketing process. Some clients prefer to be entirely hands-off, in which the above resources can be utilized to take care of every aspect. Or, if a client prefers to attend castings or visit locations, a smaller team will be more than happy to accommodate requests.

Finding Your Critical Numbers

b17As a Business Coach I have created and reviewed hundreds of annual business plans. I find many companies do a poor job of creating their plans, which seriously diminishes their growth in revenue and profits. On the surface, these plans look like they have the right ingredients for success. However, a closer look shows that the leaders inadvertently led themselves astray. They then lose valuable time and energy, creating a profit leak.

As a certified Gazelles coach, I help clients implement the concepts found in Scaling Up by Verne Harnish. The “One-Page Strategic Plan” is a key tool that everyone looks forward to using in our annual planning process. Whether your company uses this business planning tool or something else, the issues you must consider are the same. Only the presentation of the business plan is different.

At the bottom of each of the “priorities” columns of the “One-Page Plan” is the “Critical Number” section. I have found that selecting the “Critical Number” may be the single most important decision in the planning process. The “Critical Number” is a key performance indicator that you have identified as the essential leading indicator for any given planning period. Whether you are planning the year, the quarter, or your personal priorities, it is essential to pick the one or two Critical Numbers that must be achieved to drive all of the other desired outcomes. If you are not sure which Critical Numbers to select, you’ll find some clues by asking yourself questions like:

• What is the key weakness in our business model?
• What is the biggest weakness in our operations?
• What is causing us not to gain customers?
• What is causing us to lose customers?
• What is causing our cost structure to be out of line with that of our competition?

Revenue is a common number clients use. However, this is not a good choice for a “Critical Number.” If growth is an issue, you need to go deeper and find the leading indicator at the root of that problem. For example, are you not able to generate enough leads? Do you generate enough quality leads?

A great example of failing to identify the correct Critical Number in a technology company that recently ran into trouble. This company had been mildly successful for years and achieved moderate revenue growth and great profit margins. But, this company always experienced inconsistent performance in its sales team. Revenue had always depended on a yearly home-run sale. There was no predictability in the sales performance. However, the company recently found that sales were more challenging and customers now preferred the products of competitors. After deep consideration, the company found it did not meet its number-one brand promise. I had challenged this client a few years ago to put more specific measures around their brand promises. They had failed to do so, and this was now coming back to haunt them. In this case, believe it or not, their most important promise was that their product could do what it was supposed to do. My client failed to “Get it Right.” So we developed a way to measure the “% of known issues unsolved” within their technology. That became their Critical Number.

Once you find your Critical Number, ask the question, “If we focus too much on this Critical Number, what could go wrong in the company?” If the answer is nothing, then you only need that one Critical Number. However, if you find focusing on that number hurts other areas of business, you’ll want to balance the first Critical Number with a second one. This will prevent you from unintentionally injuring your progress. In the case above, the company had a cash concern. They responded by focusing the sales team on closing a minimum number of quarterly transactions. They broke that number into 20 qualified leads that were already in the pipeline and needed to be accelerated in the sales cycle.

5 Key Reasons Why Your Company Needs Professional Logistics Management Services

b16The most successful companies in all industries are applying strict logistics management principles in every compartment of their operations. Nothing is left to change or left out of scrutiny when it comes to evaluating how the transportation and logistics costs impact the company’s budget and how much waste the company generates through its manufacturing and distribution activities.

If your company is trying to reduce logistics cost, but it has not yet reached the desired level of supply chain optimization, here are the top five reasons why you should consider hiring a professional logistics management company:

1. Reduce Logistic Cost by 50%

Given the previous experience of professional logistics companies in dealing with clients, they estimate that implementing lean manufacturing, sustainable packaging and logistics principles helps them reduce their overall costs with logistics by half. The implementation of logistics management procedures involves everything from rethinking the way products are handled, packaged and stored to the implementation of automated manufacturing systems.

2. Reduce The Quantity of Waste

Companies generate a lot of waste – some of which they are not aware of, because it is their end client’s job to recycle one-way packages. One of the key elements of logistics management is reducing costs and creating sustainable packaging solutions which are reliable, reusable and help both the company and its clients reduce the quantity of waste generated by the activity.

3. Apply Lean Manufacturing Principles

Besides reducing the quantity of waste, lean manufacturing focuses on increasing productivity, minimizing lost time due to unnecessary handling of products from the assembly line to the warehouse and then to the shipping trailers. This logistics management principle which originated in Japan is now the backbone of many successful companies which have implemented strategic work procedures to help employees be more efficient in their work and to help promote a corporate culture based on collaboration and open sharing of ideas.

4. Improve Your Company’s Image among Clients

Companies which managed to optimize their logistics and supply chain management and reduce their overall logistic cost will reduce the manufacturing costs of their products. Thus, they can offer to their clients more competitive prices and stay ahead of their competition. Adequate logistics management is not only about cutting costs, but also staying successful and relevant in an ever increasing competitive business environment.

5. Earning More Goodwill for Your Company

In today’s business environment a positive public image is the key to attract valuable partnerships and endorsements from industry thought leaders. This goodwill can bring to your company the kind of exposure it needs to convince potential clients to do business with you. By implementing the right logistics management and supply chain optimization principles, your company will promote the image of a modern and adaptable business which cares for its clients and the environment and promotes a solid and sustainable business model.

5 Roadblocks To Success

b161. Not Having A Daily Productivity Goal
Every morning ask yourself what you are going to do today that will drive your business forward.

As an entrepreneur, it is up to you to take action and move forward. If you have never been an entrepreneur before, this is something that may brand new to you. You are now the creator that has to make things happen. This can be a big stumbling block for people in the beginning.

At the end of the day, be really honest with yourself, and ask what you did today that actually moved your business forward. If you focus on this every single day, you will start to see the compounding results of your efforts.

The #1 focus of every entrepreneur should be to make money. Unless you make money, your will not stay in business! You must know the driving force that will continue to make money for your business.

2. Trying To Do Too Many Things At The Same Time
You cannot possibly focus on everything, but you can get good at one thing. If you jump from one thing to another you will simply spin your wheels and not get much done. Master one thing at a time and go on from there.

3. Not Being Clear About Who You Want To Attract
You must speak clearly to your target market and know what they do and don’t want. What problems can you help them solve? When you know exactly what they want, your message will be clear. Always have that image clearly in your mind so you can give them a name and craft a very clear message that will resonate with them.

4. Not Understanding What It Is You Ultimately Do
No matter what business you are in, ultimately you are in the business of one thing only. Solving people’s problems. Whether it is weight loss, network marketing, fitness, stock trading, etc, you are solving a problem for someone. Your product or service is a solution for their problem.

This has to be at the forefront of everything you do in your business. Any kind of marketing communication must come from a position of solving their problem. People don’t want to be sold stuff. They want to buy a solution.

5. Not Managing Your Expectations
You have to expect that you will win and things will go well for you, but also be prepared for failure. Understand exactly what you must do to get the results and numbers needed for your success. Dig into the numbers so you know just what you have to generate to get that success.

Overcoming these roadblocks to success start with your mindset. Keeping the right mindset and consistent, persistent action will clear these roadblocks and set you on the right track, moving forward.

Regulate Traffic and Protect Property Successfully With Barriers

b12It’s not easy to manage heavy traffic. Any event or road that attracts huge traffic can be tough to organize without proper control mechanisms. If the event is not properly planned, it could lead to a lot of confusion and chaos.

Organizers have to plan the location, travel routes, entry, and exit for free traffic movement to the site and amenities which doesn’t allow the crowd to get out of hand. An angry crowd can become tough to handle and sometimes they could turn violent leading to a lot of damage to property and people. To regulate and limit the movement of traffic peacefully you need to have a proper plan and more importantly crowd security control measures must be in place.

Crowd Control Barriers

One of the best ways to control traffic is to use crowd control barriers. They help direct the crowd and avoid any traffic congestion. These barriers can be designed in a flexible manner to prevent any harm to the people. They come in handy to regulate traffic, lead them in a particular direction, control heavy traffic to stay within limits, barricade a special place, etc.

There are various kinds of barriers which allow for peaceful regulation of traffic. It can be chosen according to the requirement of the event. Choosing the right kind of crowd control barrier ensures better management. Choosing weak barriers when the traffic is wild doesn’t serve the purpose.

Barrier Walls

Barrier walls are used extensively to regulate the traffic. They can be seen on highways and are used for a variety of purposes including property protection. They are strong and come in a wide variety of designs and quality.

Concrete Barrier

Concrete barriers are widespread especially in controlling traffic, barricading construction sites which are an ideal choice for the safety of the public. Furthermore, concrete jersey barriers are used extensively to control the flow of traffic and as dividers as well as in parking areas. The significant advantage of concrete barrier is its durability and affordability.

Water filled barriers

On the other hand, water filled barriers are made of recycled plastic and are perfect for construction sites and special law enforcement needs. They are light and compact which allows for easy transportation and installation. It also allows safe handling of the crowd and at the same time is very sturdy.

How to Run Your Business Badly Case S

b11Recently, I’ve had a run-in with a vendor providing a service to my company. I contracted with this business almost a year ago for a service she’s going to provide in the upcoming weeks. She emailed me a couple of weeks ago to tell me that she has to cancel our arrangement due to some work she has to have done in her business. Note that we’re talking about scheduling something 7-8 weeks before our contracted date.

Valuing connection and communication, I called her to talk this through. I called every day for three days in a row and left messages. She did not call me back. Because we have a contract, I got in touch with my lawyers to see what we needed to do, and we’re looking at our legal options.

She has finally gotten in touch with me, but the situation is still unresolved. Based on this situation, and my 14+ years in business, it’s pretty easy for me to spot the flaws in her business.

Here are the problems I see:

1. Not communicating properly or in a timely manner or at all. The business owner should have called me with the bad news. In addition, she didn’t respond to my repeated calls and voice mails. She could have at least sent an email saying she had gotten voice mails but couldn’t return the call until such and such date.

2. Going with the cheapest option. She inconvenienced me in order to save a few bucks on the work she needs to have done, whereas if she continued with our original arrangement, my payment to her might have offset any money she would have saved by going with the cheap option.

3. Not taking care of her customers. The first time I booked her services, a few months later, she told me she had gotten the dates wrong (she was off by a day). This second time, she is canceling. She’s not looking out for me and providing good customer service.

4. Not running her business like a business. She may do what she does well (the actual service she provides), but to own your own business, you have to actually be skilled in how to run a business. She doesn’t have systems in place, she makes mistakes, and she is not planning ahead.

5. Not valuing the service or product she provides. She’s running a non-profit organization, and so she thinks that means she has to be broke and not charge much money. Hence, why she feels she needs to go with cheap options.

6. Doing too much herself. She seems overworked to me. She doesn’t return emails or calls, and she drops things out (that caused the original mistake in scheduling). When she did finally get back to me after a week of no response to my voice mails, she said that she had been busy with back-to-back events. Fine, but what is her business doing in the meantime (part of #4 – not running her business like a business)? She could have easily had a message on her voice mail stating that she was busy helping her fabulous clients, and that the best way to reach her was by email.

What can you learn from this? Well, first, run your business like a business!

Your action steps:

1. Overcommunicate with your customers, prospects, vendors, and employees. Respond gracefully and in a timely manner. Even an “I got your email, and I’ll respond more fully by the end of the week” is better than the black hole of no response.

2. Don’t be penny-wise and pound-foolish. Is that option really saving you money? What’s the hidden cost (in stress, time, other resource expenditure) in going with a cheap option?

3. Your customers and team members are the lifeblood of your business. Take care of them very well. No customers and clients, no business.

4. Run your business like a business. That means systems, automation, outsourcing. If you don’t know how to do those, then find someone who can teach or mentor you. Don’t run your business off the cuff.

5. You offer a valuable service or product. You deserve to make money. You deserve to be profitable.

6. Outsource and get help when necessary. If you’re dropping out things or making mistakes, that’s probably a sign that you’re doing too much or you’re doing things that are not in your skill set. Get help.

Neuroscience and Being Busy

b14We all know that mental stimulation is good for our brains and, more generally, for our wellbeing. But what about when we complain about being ‘too busy’? Are we moaning about something that is actually good for us?

Or does the stress that can come from being too busy outweigh any of the mental benefits we receive from it?

A recent neuroscience study may take us one step closer to answering this question.

The study

Scientists from the University of Dallas and the University of Alabama recently studied 330 healthy men and women ages 50 to 89 years old. They first asked them questions, including:

  • How often do you have too many things to do each day to actually get them all done?
  • How often do you have so many things to do that you go to bed later than your regular bedtime?

The researchers then awarded each a “busyness score,” based on their answers and then participants were tested to measure their cognitive abilities. This included their brain’s processing speed, working memory, episodic long-term memory, reasoning, and crystallized knowledge.

Tests included viewing two strings of numbers and determining whether they were the same or different; looking at boxes on a computer screen and maintaining the location of a blue token; and reading words presented in turn on a computer screen, and then recalling them.

The study authors concluded the following:

“Higher levels of busyness were associated with better cognition in adults aged 50-89.”

“Individuals who reported greater day-to-day busyness tended to have better processing speed, working memory, episodic memory, reasoning, and crystallized knowledge, and these relationships persisted after controlling for age.”

Results were especially impressive for episodic memory, which is the memory of autobiographical events.

What does this mean for organisations?

So, being busy can be good for our brains. Before management and leadership jump on this and use it as a reason to squeeze more out of employees, we need to note several things:

  • This study was conducted amongst aging individuals
  • It is only one study and the findings have not been backed up by other studies yet
  • The study does not answer the question of whether cognitive function is improved by busyness – or if good cognitive function in the first place promotes the ability to be busy?
  • Stress can also be associated with being busy – and this could outweigh any benefits associated with mental function

On the fourth point, stress has been shown to impair certain ‘types’ of thinking; when we are stressed, our natural, uncontrolled stress responses tend to inhibit our higher thinking abilities.