How to Start a Business and Make Money Within a Week.

As you might or not know, doing business is no easy task. For example, if you want to start a Deli business, you will need a lot of planning, which includes market analysis for your area, a location, a number of employees and of course a great deal of equipment in order to operate.

All of these essentials will translate into a heavy investment and a great risk of things not going exactly as planned, and not because you did not do your homework, but because that is just the way businesses are.

Of course the more attention you pay to detail and the more thorough your planning, the more chances you will succeed. But in any case, a traditional business like that will burden you with lot of expenses that will prevent you from seeing a dime in profits for at least one year.

Therefore, as much as the entrepreneurial way is the way to go, the fact is that you can go all the way building and running a successful business, from which you can make a lot of money to live comfortably, without having to go through all the stress of having thousands of dollars at stake for months or even years.

So what is the answer to your entrepreneurial call if you do not have the money or you do not want to risk too much of it and still you want top make money fast?

Start doing business online, which is far more than simply selling at eBay or at Amazon. Indeed, an etail business can be rewarding, I know this for a fact, but after several years making a living online I must say that my preference goes for more time and cost efficient options, which offer greater potential for both short term and long term growth, starting with very small investments.

A clear example -not the only one- of this kind of option is internet marketing, where you can actually create a lasting business capable of generating thousands of dollars in revenue per month without risking thousands of dollars.

Certainly, internet marketing is more about knowing rather than investing, so whereas a traditional business is 60% capital investment and 40% know-how, an online business built around internet marketing will be 5% capital investment (mostly in educational resources) and 95% know-how.

This means that when you do business online through internet marketing or any other option that allows you to execute your whole business operation online, you will be risking time and effort rather than money.

This does not mean that you can afford to be wasteful because your time and effort is also valuable (remember, time is money). What it does mean is that even with little or no money you, right now, have what it takes to do business and be successful, with the peace of mind that you have nothing to lose other than some of your energy, which thankfully is a renewable resource.

Therefore, if you start any business online you will have room for some trial and error without the fear of losing a fortune, and the distinctive advantage that many online business options like internet marketing, forex trading or stock trading offer, which is the ability to deliver actual results within days of having started, provided or course that you have the right tools and resources by your side.

Reference:
Alex Cadens

4 Best Business Opportunities in 2009.

Would you like to know the best business opportunities for this year? Well, I've got the list so read on and find out!

1. Information publishing business.

If you would like to work from home to spend more time with your family, I recommend that you sink your teeth into information publishing business which is one of the most lucrative fields in the internet today. You can sell ebooks, audio products, special newsletters, and reports. You can also offer coaching programs, advanced online classes, and teleseminars about things that you are passionate about that are truly interesting to online users. Depending on your target niche and the demand for your chosen topics, you can earn as much as $100,000 per month in this endeavor.

2. Eco-friendly products.

People cannot get more concern with planet earth these days. This is the reason why we got Earth hour (where we have to turn off our lights for at least one hour to save energy), recycling awareness campaigns, tree planting activities, etc. You can take advantage of this by selling products that are eco-friendly. You can create cloth grocery bags or anything that will replace plastic. The idea here is to offer some things that will do less damage to the environment.

3. Travel agency.

There has always been a huge tour market as most people find it fascinating to see the other parts of the globe. You can arrange tours to places that you are very familiar with to earn money. To set yourself apart from the rest, I recommend that you target certain market that are usually ignored by travel agencies. Let me give you an example; there is no denying that the number of gays from all points of the globe is increasing by the minute and not so many entrepreneurs are targeting these people. You can arrange gay-friendly tours where these people can go to places where they will have fun and where they will not be discriminated.

4. Special children's care.

Based on studies, there are so many children who are suffering from different conditions these days who need special care. If you have what it takes to offer them what they need, you can go ahead and offer relevant services. It would work to your advantage if you can attend relevant seminars that can offer you with in-depth knowledge and relevant resources as to how you can run this type of business.

Intrapreneurs Are What Dreams Are Made Of !!!

A new career development programme-learning intrapreneurial skills.

Bill Gates said, “I want to put a PC on every desk, in every home and in every office.” Ford said, “I want to put a car in every garage, in every home.” It is these dreams that led to great achievements. Dreams are what help people move ahead. Narayan Murthy never let go of his Infosys dream.

In a random survey of young executives, especially those in the IT industry were asked what they wanted from their careers. The good news is that most of them were happy doing what they were- but only right now! The rejoinder to their response would alarm any HR department. After all, hiring the right candidate is a Herculean task!

The story unfolds!

Well, the inevitable is that these employees will move on to pursuing their entrepreneurial dreams. But organisations can take advantage of the fact that while three-quarters harbour dreams of their own enterprise, most of them are unaware of how to get there! Once organisations recognise this entrepreneurial drive amongst their employees, they should also recognise the gold mine in it. Unfortunately, most consider this drive as a major obstacle in workforce stability.

Organisations don’t have to lose top performers to the desire of nurturing entrepreneurial dreams. Smart organisations should realise that in such dreams lies an untapped pool of initiatives. When given the opportunity within the organisation itself to realise a sense of ownership and satisfaction these individuals are bound to stick around allaying HR fears of high turnover.

In addition creating an environment in which creativity, innovation and entrepreneurial skills can be exercised would fan the individuals’ aspirations bringing out the best in them. This would reflect in their ability to perform better thereby impacting the organisation positively. Some smart managers pay attention to maintaining good relations with such individuals for future references. After all, history has it that entrepreneurs are celebrated the world over.

What next?

Having identified individuals with an entrepreneurial drive, the organisation would now have to give them the ‘ownership and satisfaction’ opportunity. How does an organisation cater to this need? It does so by developing intrepreneuring skills in such employees.

What’s the good word?

“Intrapreneuring is the process of encouraging employees to initiate and manage new ventures or improvements within the organisation.” Intrapreneurs closely resemble entrepreneurs. They are the hands-on doers who turn ideas into realities inside the organisation. The intrepreneurial process synergises individual aspirations with organisational objectives. When organisations create a culture, which allows individuals to satisfy their entrepreneurial itch without leaving the organisation intrapreneurs are born!

The lamenting lot!

Common exit interview remarks and retirement announcements are, “I’m leaving in search of something more.” “I’m leaving to start my own business.” The underlying message is rather clear. These individuals look for more than a paycheque at the end of their workday. They desire for opportunities where they can establish, nurture and hold responsibility for their work. When the HR department develops intrapreneurial skills in such individuals it provides them:

• Reasons to stay on
• Challenges that helps tap their potential
• Autonomy and leadership opportunities

The key to the success of any intraprenuerial initiative is to see that the new idea or an improvement venture fits into the organisational framework. While allowing employees to exhibit their entrepreneurial talent, organisations must ensure that the ‘new division’ complements its functioning.

The other angle

Not all employees desire to branch out and do something on their own. Infact most of them are not even ready for such opportunities within the organisation, leave alone their own enterprises. Managers should nevertheless remember that while these individuals are not ready to take on responsibilities they are ready to leave the organisation when denied the opportunity! Therefore, intrapreneuring is the safest way out!

Intrapreneurs at work

IHS Support Solutions started of as IHS Helpdesk Services company. It provided on-site services. A young employee whom the management had already identified as one with great potential suggested, “Why not provide 24/7 phone service as well? That way people looking for help at their client companies would call us and speak to an HIS staff member who would be the first to see if the problem can be resolved. This staffer can then determine whether the person on call should disturb the client.

This new division can be hired by clients to be their on-call persons".

The management promoted the idea. IHS has now diversified to providing help desk staffers both on-site and to various clients and organisations. The young employee stayed on to head the new division. This illustrates how the entrepreneurial desires of individuals can be successfully teamed with existing organisational framework. Texas Instruments is another organisation that is running high on its intrapreneurial successes.

A study of fifty of its new products revealed that:

• Intrapreneurs persisted despite obstacles
• Every failure lacked a dedicated intrapreneur
• Innovations were on the decline till someone donned the intrapreneurial role

Training intrapreneurs

Most training managers believe that intraprenuers are born not made. But a marked improvement in individuals post intrapreneurial training tells a different story!

Most organisations provide training in intrapreneurship only to those who volunteer! The assumption is that only those who are courageous enough to volunteer can succeed as intrapreneurs. Training success is partly because these individuals look around the training room and realise, “My goodness, there are other people like me in this world and it seems that the corporation is really serious now about wanting this aspect of me employed.” In other words, training allows these individuals to use a part of their potential that they failed to recognise. Training boosts their drive and vision.

An intrapreneur possesses complementary skills. He needs to be knowledgeable HRD, finance, sales, marketing and quality control. Training is crucial if these skills are missing.

Getting started

An organisation needs to develop an environment, which supports individuals with new ideas. To encourage intrapreneurial initiatives organisations should:

• Identify individuals with new ideas and risk taking abilities
• Look for ways to retain then from the start as such people are most likely to leave
• Provide opportunities to develop their strengths and work on their weaknesses
• Align individual goals with organisational objectives
• Ask the most-likely-to-leave employee what would make him stay- he might take on the ownership of his idea and stay on!
• Implement and support ideas whenever possible

Career development opportunities is one of the first ‘carrots’ organisations offer bright employees. Developing intrapreneurial skills in employees not only keeps talent in the organisation, it also keeps them satisfied and happy.

Reference:
The ManageMentor

Small Business is Worth It.

When you decide that you are tired of working in an office and you are looking for a change, you should look at the fact that small business is worth it. You will find that you will have a plethora of options when it comes to a small business, and this is what is going to make the entire transition exciting and fun. If you already know what it is that you want to do, then you merely have to get it up and going. If you are not sure on what it is that you want to do, then the fun is actually the journey of discovery.

Laying Out The Groundwork

The first thing you are going to do when you decide on what you want to do, is lay out the groundwork for the start of the company. This will bring you to the point where you know what is going to be common practice, and what the purpose of the company really is. Small business is worth it, when you decide that you want to do something that is both challenging and fun at the same time. You will find that starting a small business is something that will give you strength in areas you otherwise did not know you had. This is great for your spirit, and it is great for your wallet if you can manage to succeed. Find what you like and get it running, and then manage to make it work it's that simple.

Invest Your Time

One of the best ways to ensure that the small business that you start is going to be what you want it to be, is to invest your time into it. There are many things that you are going to have to pay attention too, as you are now the boss. This means that basically every aspect of the company is under your control. The fun part is actually making decisions and seeing that they do make sense and they do work. This will give you a sense that small business is worth it, and that you can see success down the road from your endeavor. Good business is prepared for the dips in work, and this is where you will learn to manage your time. This is when you will learn that you need to invest the time to make the company better for the next round of business rush.

Learn From Your Mistakes

It is said that if you do not make mistakes, you do not learn in life. Nothing could be closer to the truth, than with a home business. You will quickly see that small business is worth it, when you actually remind yourself not to do the same thing twice if it failed the first time. This will steer you in a different direction, and this will actually allow you to grow as a business. This could be the most enlightening and fun time of your life, and it is time to take full control.

Reference:
Roger Barnes writes home business, work from home and related articles for the Home Business Selection website at Small Business Selection

Small Business Owners - A Rare Breed.

Willingness to Take Risks

You will constantly find yourself having to make decisions about where and how to advertise, which areas to specialise in, when to invest in new equipment, and so on.

Although this constant decision-making can be stressful, it can also be satisfying and enjoyable. Solving problems and making decisions can give you a sense of power and confidence.

Enthusiasm

Enthusiasm is an essential ingredient of every entrepreneur. If you are half-hearted about your new venture you may have difficulty summoning sufficient determination to overcome problems when they arise.

If you are enthusiastic, on the other hand, you will relish the challenges your business presents. What's more, your enthusiasm will rub off onto customers, employees (if you have them) and other people you have to deal with.

Most of us would far rather work with or buy from someone who is enthusiastic and enjoys their work, rather than someone who is permanently depressed about it.

Ambition

Most entrepreneurs have a driving ambition to achieve the best they can for themselves and their loved ones; in addition to money, this may include financial security and a better way of life.

With such ambitions they can cope with any setbacks along the way, because in their mind they have a goal or vision which drives them on.

Ambition and determination together can overcome many obstacles. In business, as in most others aspects of life, if you know what you want and are determined to achieve it, the chances are excellent that you will succeed.

Honesty and Willingness to Give Good Service

Every business depends on a circle of satisfied customers for its continuing survival. If people are pleased with the service they have received from you, they are likely to recommend you to others as well as keep coming back themselves.

By contrast, if you give poor service then, even if they do not complain at the time, they will not return; and rather than recommend you to others, they will warn them off. If you have a good reputation this will ensure that more people keep coming to you.

For this reason, successful entrepreneurs go to great lengths to obtain and keep a good name for themselves.

Reference:
Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solutions - Six Sigma Online offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.

Starting and Marketing a Small Business.

Starting A Small Business

A small business can be started either as a sole proprietorship (single owner with full business liablility and responsibility) or as a partnership between two or more people. Registering the business and drawing up a partnership agreement requires a lawyer and legal fees.

Before opening up your small business, a lot of research and planning is required. A good business plan will not only increase the chances of success but will also help you in raising money for your business.

Before starting out on your small business venture, ask yourself questions such as :

• Why you want to start a small business? (Maybe you want more freedom in the way you spend time and do things. Maybe your own business can help you achieve financial independence and make better use of your skills.)
• What business will be right for me? (This should preferably be a field where you already have skills or is your hobby or interest).
• How will I finance my business?
• How will I market my business? (For example, It is a good idea to create a search engine friendly website. The startup costs for a basic new website is very small. You can also list your products and services, include a reliable payment gateway, such as Paypal and a shopping cart in your website. You can list your website in online classifieds and auction websites for publicity.)
• Also think about factors such as business location, products or services to be sold, supplies and equipment required.
• Note that many people start a small business part time which may grow to be a full time business.

Marketing your Small Business

• A website is a great marketing tool for your small business. If possible you should also operate your business online. A website can be used to market your products and services to a wide range of audience and locations. A website also allows you to track customer preferences and personalise content based on customer profiles.
• Developing your network is most essential in marketing your small business. Do not ignore the value of referrals in the success of your business. Attend networking events and seminars regularly to increase your network and learn more about networking.
• Advertise in newspapers and magazines. Radio and television advertising can be also be useful if within your budget.
• Do remember to measure the results of your advertising campaigns in order to ensure that your marketing efforts are effective.

Why Plan Your Businesss?

The owner of a small sheet-metal fabrication company once told me, "Why plan? It only gets in the way of what would have happened anyway." That's a fatalistic notion often held by managers of small businesses. Too many believe that they're totally at the mercy of larger competitors. In fact, for many, exactly the opposite is true.
Think of the reasons for your company's success. You'll probably come up with a series of traits that are uniquely yours-characteristics that your larger competitors can't begin to duplicate. That's why you're in business.

Of course, you may already believe in the idea. However, you may have to sell it to the others in your company. This ammunition may come in handy.

Recognizing Uses of the Plan

For many of us who left corporate America in favor of a smaller work environment, the idea of drafting a business plan may seem offensive. After all, isn't frustration with all that busywork one of the reasons we left in the first place?

We all have an aversion to doing anything on our job that doesn't immediately help the situation we're now experiencing. However, isn't it also true that a little foresight and action before the fact can help eliminate many of the problems we face each day. Wouldn't it be nice to anticipate something like a price cut by your major competitor or a rise in the interest rate on your credit line? Of course it would. And with that anticipation comes an organized and effective response. That's what planning does. Additionally, we prepare a workable business plan to

• Determine where the company needs to go


• Forewarn of possible roadblocks along the way


• Formulate responses to contingencies


• Keep the business on track to reach its planned goals

Planning for Promotion of the Company

Many people associate a business plan with start-up companies. Often our first exposure to a business plan is for the purpose of convincing investors and lenders that we have a viable idea at which they should throw money. That's not what we're developing here.

Though the techniques may be similar, the purposes are entirely different. So are the results. Promotional plans are often untested, pie-in-the-sky theories of what someone thinks will work. The goals, objectives, and numbers are usually unproven. Detailed departmental plans for hitting targets are frequently hazy-if they exist at all. Promoters don't want to burden their investors with the mechanics of execution. That comes later, after the money is in the bank.

Think of a start-up's promotional plan as concept-driven. It's more general in nature. The presentation leaves many questions of practical execution unanswered. These plans are fine for their purpose. However, most aren't intended as a blueprint for running the company.

Planning for Operational Purposes

We're not creating a promotional plan for a new start-up company. Instead, by using this book, you create a practical realistic planning tool for your business. The emphasis is on integrating the details of what each department within the company does to help the firm reach its overall goals. We want to tell each person in the company the single most important thing they need to do-must accomplish-to contribute to the overall success of the business. Certainly this results-oriented attention to detail can (and probably should) be used for a start-up venture. However, the promoters are right-it would confuse outsiders not familiar with the inner workings of the company.

Our focus is on practical solutions to everyday business objectives. We design these to work in concert with one another. When they do, the company moves from where it is today to where its owners, investors and managers want it to be.

Establishing Goals

Why establish goals? I've heard from colleagues who run other small businesses that they always seem to fall short of any goals they set for the company. There's almost a feeling of helplessness. Their companies are small and lack the resources needed to turn goals into reality. Some wonder why they should spend time developing a business plan that might help the company make money over the next year or two-especially when they could be working on something else that's guaranteed to make money today. That's hard logic to refute, especially in a tight economy. Many small-business owners and entrepreneurs go after the quick buck. Those are the ones that don't last. Companies that lack a definite direction and the ability to stay on course eventually sink. It's the firms with vision and a plan to exploit that vision that become the stars. If you don't set goals and then try to reach them, it's guaranteed that your firm will stay right where it is today. With changing technology, changing customer demands, and increasing sophistication, marching in place is business suicide. During the 1990s and as we approach the next century, no company has the luxury of conducting business as usual. If you stay where you are today, the rest of us will leave you in the dust.

Company Goals

These are the targets for change and transition that your firm must reach over the planning horizon-for our purposes, the next twelve months. Company goals cover such major issues as

Products offered

• Customers targeted


• Company image


• Competition


• Levels of service


• Product quality

Companywide goals established in the business plan move the company into the position where it needs to be.

Department Goals

At very small companies, often that's for one person. No matter. Design department goals to connect with specific requirements of both the overall company goals and the goals of other departments in terms of product and timing. We make department goals in order to

• Assist other departments that depend on those specific results
• Achieve the overall company goals

A good example would be in the area of finance. Say the firm needs additional funds to buy the machinery needed to expand its manufacturing operation. This will generate the sales revenue needed to meet overall profit targets. Here are examples of specific department goals:

• Get additional funds.


• Purchase and take delivery of new machinery.


• Expand manufacturing.


• Generate added sales.


• Help attain the overall profit objectives.

Failure to reach of any one of these department goals could jeopardize reaching the overall company's target. Additionally, within every department, it's easy to identify exactly what that department must do to further the company's cause.

Appraising Your Current Position

The question here, however, is why do this? After all, most managers of small businesses are close enough to their everyday operation to know where they are, aren't they? Not necessarily. At least few take the time to think about where they are, then write it down so that others can judge its accuracy. We're talking about things like:

• Market position


• Company strengths and weaknesses


• Reputation


• Industry viability


• Technology


• Product line


• Adequacy of capital


• Capability and sufficiency of employees


• Sufficiency of plant, machinery, and equipment (the infrastructure)

Often the hardest part of starting a business plan is honestly determining your current position today. It's not always so obvious. Take the case of Domino's Pizza Corporation. What business is it in? Of course, it sells pizza. So does every one of its competitors. The Domino's planners decided that differentiating Domino's product based on higher quality was too hard a sell. Besides, it wasn't necessary. So what business is Domino's really in? The convenience industry. Its pizza isn't any better or worse than most of the competition. However, the niche Domino's chose for itself in its plan was the business of selling convenience. For a while it had that entire market to itself. Another example is that of a payroll processing service. Its current position is that of providing financial convenience to its clients. The company performs a task that other companies would rather not do. While assessing the current position, someone came up with the bright idea of expanding the services offered. After all, financial convenience extends beyond simply doing the payroll. Why not add bookkeeping, tracking and collecting receivables, and personnel consulting? See how the planning process not only answers a lot of questions you may not have thought about for some time, but prompts questions that may turn into opportunities? That's the kind of penetrating thought that goes into assessing your firm's current position.

For more related article check out:
All in One Business Planner

Six steps to effective cost management.

Effective Cost Management.

Abstract- Reckless, short-sighted cost-cutting will not necessarily benefit a company and quite often can have a negative impact in the medium or long-term. What is needed is cost management, which differs from cost control in that it is aproactive process that focuses on the elimination of waste in business processes and procedures. Cost management, as such, is a strategic process that stresses the optimization of efficiency. Among others, this approach requires strong leadership skills, since managers need to improve customer satisfaction while boosting profitability. Six steps to effective cost management are provided. These are understanding the cost-revenue structure of a business, minimizing interdepartmental conflicts, involving workers in decision making, increasing effectiveness, and measuring cost judgments against a long-term strategic plan.

But cost cutting is not always the answer. Cost cutting will usually fail to produce long-term results and will likely harm the company. Cost cutting is short sighted and random and is not based on the company's business strategy. It is usually a reaction to immediate problems and not well thought out. While cutting costs will appease a short-term need, the process will have to be repeated in the near future because the real problems were not solved, only the symptoms were dealt with.

What companies really need to be doing is managing their costs. Managing costs does not focus on cost cutting, it entails waste elimination. When companies cut costs, they wind up hindering their development and growth. Managing costs focuses on eliminating unnecessary expenditures (waste) while focusing resources on the customers. It is estimated that most companies are wasting about 30% of their expenditures on items that do not have any impact upon their customers.

Cost Management Steps

The managing of a company's cost structure is consciously choosing to invest in selected expenditures that will achieve a specific revenue system. This is a proactive process, whereas cost cutting is a reactive process. Managing costs is inherently more effective. This effectiveness involves doing the things that optimize the results of a company's overall activities. Reactive cost cutting may add some efficiency, but it does not optimize the company's business process or its results.

Cost management is a strategic process that focuses on the customer and on profitability. The six steps to effective cost management are:

* Understand what causes the cost and revenue structure of the business

* Understand and reduce interfunctional complexity

* Provide the tools to manage costs

* Involve employees in decisions

* Increase effectiveness and continuously improve costs

* Measure decisions against the strategic business plan

Understand What Causes the Cost and Revenue Structure of the Business. This is the most critical item in cost management. Many companies do not have accurate information on what their true costs are. A company must first identify exactly where its revenue comes from--products, services, customers, and sales channels. Next, a company must identify the specific costs that produce its revenue stream. Finally, a company must identify overhead costs and costs not directly linked to revenue generation. Salesmen's commissions can easily be linked to revenue, but this link is not as direct for office supplies. Nevertheless, office supplies are needed somewhere during the sales process.

Understand and Reduce Interfunctional Complexity. In any organization, the way any one department operates is influenced by other parts of the company. For example, marketing has an influence on inventory levels, which effect warehousing and transportation costs. The complex cause- and-effect relationships must be sorted out. Reducing complexity means constantly questioning why work is done, and how it can be done more efficiently. A basic flow chart of the company's work flow can be very helpful in understanding how things actually get done. It will probably also show that there are a number of extra, unnecessary steps involved in the company's processes. Look for ways to get the right information to those who need it as quickly as possible. The sales department needs to know what products are not selling--daily, not just at the end of the month. The production people need to know what products are selling so that they can produce what is wanted by the customers. In many companies, the production people get this information once a month-- enough time to have wasted a month producing the wrong products.

Providing the Tools to Manage Costs. Provide the skills (i.e. decision- making, problem-solving, team-building, and other thinking skills) that will enable employees to better understand how to control costs, improve quality and productivity, and enhance performance. Most people want to do a good job. When a company invests in their employees by educating them, the employees will be better able to do a good job.

Involve Employees in Decisions. Employees will need to understand the company's objectives and have accurate cost information. Soliciting input from the employees will not only give management a better understanding, but it will give employees more incentive to become involved. Companies that actively solicit suggestions from their employees will undoubtedly find better and more cost effective ways to do things. When someone works with it everyday, they will have insight into the work and possibly how to do it better. Ask employees how they would do it better.

Increase Effectiveness and Continuously Improve Costs. Redefine the company's cost structure to select the costs that generate profit. Cost management must become standard operating procedure. Management and employees must be constantly identifying opportunities for eliminating or reducing unprofitable work. When a company only incurs costs that are specifically linked (with reasonable overhead) to revenues, they will be maximizing their profitability. A company may need to eliminate departments, or it may need to consolidate or even expand departments based upon where their spending generates revenue.

Measure Decisions Against the Strategic Business Plan. Every company needs to have a long-term business strategy. Cost management should be part of the strategy and be influenced by the strategy. Cost decisions should be measured against the company's strategy, rather than a current short-term situation. A company should not buy an excessive amount of inventory because the manufacturer has lowered the price to get rid of it. The company should be buying the amount it needs to satisfy its customers.

Controlling costs through short-term cost cutting leads a company to unprofitability. Cost management will ensure long-term growth and profitability.

Reference:
Godey, Jim

Boom in Telecom Sector: Emerging Tower Business

Ever Since Hewlett-Packard began its journey from a garage and became one of the world’s largest companies, the idea of a start-up has often been connected with humble beginnings. You pooled in some savings, quit your job and started with nothing but a laptop, mobile phone and a dream. 

Funds were initially raised in small installments and investments were also made in modest complements. To start small, learn and then expand was the route entrepreneurs took.

But what if you worked in an industry where a billion dollars is no big deal? What if you need hundreds of millions of dollars to start, and as much to scale up? Can you make it big in an industry that thrives on megabucks and compete with big business groups playing in the same field? Or should you just stick with pickle-making, sericulture, or a one-person consultancy? 

Welcome to the era of ivory tower start-ups. It no longer takes an industrial conglomerate and surname-led brand to start cash-rich start-ups. Investment companies are on the lookout for managers with entrepreneurial spirit and the right skill sets to start killer companies. And the combination is creating some start-ups in the big league. 

The telecom tower business is a classic example. From being almost a non-existent business few years ago, it now has all major telecom players scrambling to hive off their tower infrastructure to unlock value, and international players vying for a toehold in this growth story. And as India’s mobile subscriber base continues its fairy-tale run, the towers which power the cellular networks are enjoying a dream run too. 

Today, the country has 1,10,000 telecom towers. By 2012, it is projected to balloon three times as the mobile subscriber base touches 500 million. Is there room in it for an entrepreneur with the skill and the knowledge? “Yes,” according to Xcel Telecom MD Sandip Basu. 

Besides financial muscle, start-ups in this space need skilled teams that can set up towers fast and scale the business quickly. “And skilled manpower to set up and maintain towers is not easily available because it is still a relatively new industry,” says Mr Basu. This is where entrepreneurs with the knowledge and the urge to play the big stakes come in. 

In October 2006, Q Investment incubated Xcel Telecom, a standalone tower firm, and roped in Sandip Basu to manage it. Mr Basu had been eyeing the tower segment and knew that subscriber numbers made leasing towers to operators a viable business proposition. So he grabbed the chance. 

“I knew it was an emerging opportunity,” says Mr Basu. “But it is a very capital intensive business. Q Investment had done a lot of research in this phase. When I met them, Q Investment was already looking at tower opportunities.” Q Investment is pumping in $500 million into Xcel Telecom and is targeting 25,000 towers in three years both through expansion and acquisitions. 

Entrepreneurs looking to set up tower networks need not be overwhelmed by the need to raise large sums as a lot of companies were looking to finance these ventures, according to Mr Basu. “There is an assured cash stream and no ambiguity about accruals. Though the industry is new, it is not difficult to get funding (both on debt and equity) because of the huge growth potential.” 

The payback time for phone operators is typically more than a decade, but it is just five years or less for tower companies. Tower companies have been found to be 10% more capital efficient and 20% more operation-efficient than operators because, this is their core business. Monthly rents, varying from Rs 40,000 to Rs 1 lakh depending on location, don’t diminish but only see annual increases. While incremental costs go up only 10%, revenues increase by 80%. 

There are quite a few survival tips from industry veterans who say the telecom towers business is all about costs and scale. The first challenge, of course, is to secure capital at reasonable costs. “If you are putting up infrastructure at a cost of capital that is higher than that of operators like Airtel and Idea Cellular, then you are starting at a disadvantage. The ability to get smart capital and a moratorium for two-three years when you are scaling up operations is critical,” says Arun Kapur, president and executive director of the Srei group-backed Quipo Telecom Infrastructure.

Expansion is also crucial to grow rapidly. For instance, Bharti Airtel, also a player in this space, plans to add 30,000 towers in this fiscal year and that means nearly 100 towers would come up each day. 

And a tight lease on costs, that good old startup virtue, would be required too. “It is essential to have the ability to bring operating expenses down. With operators lowering the tariffs and reaching out to lower paying subscribers, they want partners who can take costs off on the operating side. The ability to innovate and bring down capex and opex is crucial,” says Mr Kapur. 

Also, the ability to bring in more tenants on towers is important. The more the number of operators sharing the tower, the more the rent and quicker the returns on investment. With a single tenant, the gestation period can be as long as ten years. “If you get the number of tenants right, you got the business model right,” he adds. 

A big boon for the industry is the absence of any kind of licensing, though the telecom sector is highly regulated. So, the entry barriers are not high. But on the flip side, the setting up of a single telecom tower requires nearly 40 clearances, ranging from those from the Wireless Planning Commission and municipal corporation to soil investigation clearance and state electricity boards. These are, clearly, barriers to entry despite the massive need to expand telecom networks to every nook and corner of the country. While the huge demand for towers continues to make it a lucrative industry, those who started earlier are better placed. Firms which have already signed master service agreements are better than those starting up now. 

With the mushrooming of many small tower companies that have just about 50 to 100 towers in their portfolio, acquisition opportunities are also emerging in the sector. Xcel Telecom, for instance, has an acquisition war chest of $2 billion. 

Birth of a Salesman: Selling Learning to Solve Business Issues.

Birth of a Salesman: Selling Learning to Solve Business Issues

Perceptions about the learning function may be learning professionals' greatest frustration, but changing those perceptions is one of the most promising opportunities for impact. Moving learning to business-partner status requires an investment in yourself.

How many times have you seen the potential for a critical integrated learning solution overlooked until the deployment of a new operating process, a systems implementation or the launch of a new product or service - or worse yet, totally ignored until something goes wrong?

Learning need not be forced to limp in and turn lemons into lemonade, though. It should move beyond the role of a firefighter dousing the flames of poor planning and circumstance to the more proactive role of a building inspector to help make sure the house doesn't catch fire in the first place. To assume this role, however, learning leaders must sell the value of development programs.

Selling has several connotations. If you find yourself selling learning to a line-of-business head, promoting a packaged solution that fits in your current budget or asking for precious budget dollars and finding apathy or limited excitement, you likely are too late and have missed the opportunity.

Selling your solution is about selling yourself and your team's ability to execute - to build trusting relationships based on previous initiatives' success and indisputable data. Selling is about business partnering, not pushing your solution.

This requires a continual cycle of developing the relationship and educating decision makers about learning potential and performance. This kind of selling is key to building the kind of institutional trust and relationships that will be required to win support for learning's up-front involvement in the next critical endeavor that will require collaborative initiative.

It's important to remember that relationships are earned, and if organizational perceptions about learning's role are not taken seriously or shaped by creative and innovative solutions, they can remain a serious drag, damper and de-motivator to the entire learning enterprise.

Consider the sales process: It is not your one-size-fits-all idea in a box that should be accepted by any prospective customer you pitch it to. It is determining the business issue, drivers, potential of the solution, how the solution comes together, investment in dollars, satisfaction with the executed solution and return on investment. If you have been attempting the first with limited success, let's discuss how we get to the latter.

Rolling Up Learning's Sleeves

Given the demands on our time these days, it's easy for any learning professional to get mired in an unceasing cycle of process meetings in the learning organization. But this unfortunately comes at the expense of not moving our learning organizations forward to become better business partners - easily said, but not easily achieved.

Relationships with line of business leaders are never static. They either are gaining momentum and moving forward, or they're moving backward. If a business leader does not know your group, then you do not know your customer.

That's why knowing your business, building critical relationships, understanding how decisions are made and why they are made are so important. If you bring creative solutions and new ideas to shape the overall business, you can reshape perceptions about learning and add value to your organization.

In sales, there are "high-value questions." In the learning leader's situation, some of these may include:

a) What are the perils and challenges between our current state and our goals?

b) What does success look like?

c) What does failure look like?

d) Does a performance solution need to be part of the overall solution, and why?

e) Which performance indicators will inform the business about its early progress?

f) Which piece(s) of the implementation plan might require us to stay closely connected moving forward?

OK, so you have asked the questions. Now what? From here, it becomes similar to a learning analysis. You understand the problem, but do you understand the gap, the challenge? Would the decision maker agree with you? How does your approach distinctly map to the needs and fulfill the gaps? Can it be demonstrated? Is it logical and simple, or convoluted? Can you explain it in less than a minute? And the big question: Can you prove that you can execute the solution?

Once key decision makers understand the big-picture impact of the learning enterprise, they're far more likely to forge a relationship through which they can discuss the tools or capabilities the learning organization can bring to help solve the issue or increase the business' overall chances of attaining its desired objective.

Practical Advice on What Works

Sonserae Toles, director of the U.S.-based Learning Campus for Siemens, a global leader in industry, energy and health care, said there are two things any learning leader can do to help advance effective corporate learning.

First is to look at where your key clients reside structurally within the organization and to become well-versed in their specific body of knowledge to establish credibility and increase the chances of a more meaningful engagement. Learning professionals who already have expertise on a particular business line usually have a much greater chance of being perceived as a trusted partner than those who do not.

A second, albeit underutilized tactic is to reach out to the communicators supporting the lines of business. "That communications person can be an extremely valuable resource. He or she knows what's happening within the organization, what the trends are and what other parts of the organization support the operations. Don't underestimate their role," Toles said.

Building relationships with other support services within the organization not only gives learning key allies in selling itself across the organization, but also puts learning closer to the business operations that drive results on a more regular basis.

Sheri A. Lamoureux, human resources executive for Energy East Corp., a super-regional energy services and delivery company based in the northeastern United States, said earning the support of the company's senior vice president and chief administrative officer, in addition to its human resources team, has been key to building the business case for enterprise-wide learning.

That was critical, she said, because for some time, the company wasn't managing or tracking the kind of training its employees got from external sources, so it wasn't really in tune with how learning was impacting its business. Had that situation continued, the organization might never have recognized - from either a business or succession-planning perspective - how important its learning objectives were to achieving its goals in the short and long term.

Before it could renew its impact, learning had to enlist the support of human resources and senior management by creating evaluation tools to measure the success of training and demonstrate a direct impact on financial performance, Lamoureux said. It also had to win the backing of skeptical business managers who had gone so long without significant employee development support that they wondered why their future performance hinged in any way on learning.

"The leadership of the organization is the most important component of this to be successful," she said.

Beyond that level of organizational sponsorship, the Energy East learning team had to not only understand its internal clients' business but also be capable of selling the benefits of engagement with learning in their language. That's the wellspring of trust between business managers and learning professionals.

"It's being able to deliver on what you say you're going to deliver on and showing them the results and doing it in the timeline you promised," Lamoureux said. "It's really as basic as that - and developing those relationships where they understand that you fully understand the business drivers and that you have the business acumen and can gain the trust and credibility. It's focusing on results."

Those organizational assets were evident in the execution of a workforce respect program that the learning team expected would drive an increase in employee complaints in the short term, but in the long run would actually create a more equitable working environment for employees. The learning team delivered the program, acknowledged both the pain and gain, but in the end, demonstrated not only a decrease in complaints but also a broader slate of benefits to the company.

Lamoureux said the practice of simply talking to business partners and being open to their suggestions and also being flexible and open-minded in terms of learning solutions can effectively demonstrate the kind of reciprocity required for meaningful partnerships.

It's also important for learning professionals to understand relationships are one-half of a critical success formula for selling learning and earning the trust of decision makers and business partners.

"Relationships can go a long way, but quite often we need to show the business rationale for what we're doing and how we're moving forward," Lamoureux said.

Successfully selling learning across the enterprise requires one to define the business case, gain consensus about it, execute the work and then measure and reflect the impact to build trust and win support for the next collaborative initiative with a line of business.

"There's both a trust and a data piece to that," Lamoureux explained. "Business partners can really only convince themselves. If you show them data and show them facts, it's hard to argue with that. And if it's coming from trusted source, that can seal the deal."

In summary, if you want to sell learning, you'd better know your customers, understand their pain and map valid solutions that have proven that they can solve that pain. Demonstrating the capabilities and relevance of yourself and your team as opposed to merely promoting an off- the-shelf solution will help you close that sale.

Reference:
Anthony A. D'Agostino and Joseph Daniel McCool
[About the Authors: Anthony A. D'Agostino is a vice president and principal in the learning practice of ACS. Joseph Daniel McCool is an author and an online columnist for BusinessWeek.]

How to Get the Most Important Things Done.

Have you ever gotten to the end of a "busy" day and then realized that you didn't really get anything significant done?

One of the biggest causes of this common problem is what Peter Drucker calls "drifting into trivia." Getting so caught up in all the small
stuff that you forget to do the big, important stuff.

There are many opportunities during each day for you to drift into trivia: remembering a phone call you need to make, coming across a piece of
paper reminding you of some other project, getting an email asking you a question, a call from a colleague, a drop-in visitor, etc.

Before you know it, the important task that you were working on is hijacked by a much less important errand.

If you find yourself routinely working on unimportant things or not accomplishing as much as you want, you may be drifting into trivia more often than you think.

Drifting into trivia is not always easy to spot. Sometimes the work that you drift into seems important, but if you take a step back and reflect on what you are really trying to accomplish, you realize that the work doesn't really serve your
objectives and is merely distracting you from what you really need to do.

The best way to avoid drifting into trivia is to have clear priorities and objectives. When your priorities are clear, you will be able to tell when that tempting distraction is less important. You will realize immediately that by doing it you would be drifting into trivia.

Setting Clear Priorities

Effective time managers quickly realize that they simply cannot do everything. They have to be selective with their limited amount of time and consciously choose to spend it on what is most important to them.

This is why it is so important for you to be the one choosing, rather than just going with the flow and allowing circumstances, interruptions or other people to choose for you.

Prioritizing means taking conscious control of your choices and deciding to spend more time on the projects and tasks that are important and valuable, and less time on the ones that are not as important or valuable.

This may sound obvious, but the fact is that the vast majority of people don't put much thought on how they spend their time. They just flow through life doing whatever grabs their attention next, or repeating the same things day after day
out of habit and routine.

How to Prioritize

The ABCD prioritization method is a simple, practical and powerful technique you can use to prioritize your projects and tasks.

You should start by prioritizing your projects (which represent your outcomes) based on their importance.

I normally assign an A priority to ongoing projects that I'm actively working on, as well as important long-term projects that I want to continue moving forward.

Your A projects represent outcomes that you have decided are important enough to commit time to on a regular basis. So, if you think you should be making progress on a project right now, give it an A priority.

I assign a priority of B to projects that are "under review." They may very well be worth moving forward, but they are not important enough to devote time to them this upcoming week. You can then revisit your decision during your next weekly
planning session.

One common mistake while prioritizing is to automatically assign an A priority to urgent things, and to push back important long-term projects to B or even C priority.

If a long-term project truly is important, you should make it an A and commit time to it on a regular basis.

I usually leave urgent but non-important projects/tasks as either B's or C's, which helps me to productively procrastinate on them until I can truly determine if they are worth doing. Since I review them regularly, I don't have to worry about them falling through cracks or becoming a crisis.

The C priority category represent projects that I may want to do at some point in the future, but definitely not right now. Once I've decided that a project is a C, I won't even consider committing any time to it during the upcoming week.

Finally, I reserve the D priority for projects and tasks that I'm not planning to do at all. They are simply not worth my time right now.

Prioritize Your Tasks

Prioritizing tasks is slightly different than prioritizing projects. In general, projects are things that you are going to work in parallel during the week, so the project priorities help you decide which projects to work on, as well as
how much time to devote to them.

On the other hand, you normally work on tasks for a given project sequentially. You work on the most important thing first until completed, and then you move on to the next most important thing, and so on. Task priorities help you decide the
ordering of tasks within a given project... which task to do first, which task to do second, etc.

You don't need to worry about any other projects or tasks you may have, just consider how important the task is for its project.

When prioritizing tasks, I usually start by categorizing them into one of the ABCD labels without providing a rank.

Ranking the Items

Once I have assigned a priority label to all tasks, I focus on the A's and assign individual priority rank values to the top five to ten tasks:

A1 for the most important, A2 for the next most important, and so on.

You can usually tell which of two items is more important just by looking at them.

If you are having trouble deciding, just ask yourself: "If I could only complete one of these but not both, which one would I choose?"

If you think two tasks are equally important, just assign the same priority value to both of them.

If you have more than ten tasks for a project, you don't have to assign rank numbers to all of them. Just rank the top five to ten tasks and leave the others with their general labels (A, B etc.)

One important benefit of prioritizing is that it allows you to focus on your most important tasks without getting overwhelmed by everything that you need to do.

That's why I suggest you only rank five to ten tasks: it allows you to focus on a small number of tasks at any given time.

Achieve Planner makes it super easy to filter your task list by priority so you can stay focused on your most important tasks.

If you still find your large task list overwhelming or distracting, simply move more of your tasks to B or even C status.

Working with Priorities

The key to making the ABCD method work for you is to develop the habit of using your priorities to guide your work.

Whenever you start working on a project, start with the top priority task and work on it until it's done (or it's time to work on some other project).

If you consistently choose to spend your time on your most important projects and tasks, you'll be making great use of your time and you'll feel much more productive.

Here's What You Can Do Now

1) Look over your projects and categorize them into A's, B's, C's and D's

2) If you start working on a project and you haven't prioritized your task list, spend a few minutes prioritizing your tasks and then get to work on your most important task first.

3) Whenever you start working on a project, start with the most important task first - develop the habit of using priorities to guide your work.

Here are some additional resources and tools that you might find useful...

1) Achieve Planner Software

Achieve Planner software for Windows helps you get organized, increase your productivity, and make better use of your time. Here's what one user had to say...

"After trying Achieve Planner for nearly two months I can honestly say that it has
revolutionized the way I work. I have an incredibly busy schedule so I need something that can cope with a multitude of tasks, projects and appointments whilst at the same time keeping me focused on what is most important. Achieve Planner does all of this and much more besides.

Over the years I've tried pretty much every system on the market and nothing, absolutely nothing, comes anywhere close to this. It looks great, works superbly, comes with excellent instructions, is a pleasure to use, but most important of all - IT REALLY WORKS!

For anyone who wants to get organized and take their productivity to the next level Achieve Planner is an absolute must. It's one piece of software that I'm certain I'll be using for many years to come."
Paul Smithson

2 ) The Journal" Diary Software

Keeping a journal or diary on your computer has never been easier! If you've ever wanted to start a journal or keep a diary, take this opportunity to get started today!

"I just wanted to thank you for writing such a useful program. I use it daily to record my thoughts, which I later review as I write my poetry. The easy reviewing of my previous thoughts from other days has alleviated much of the writers block I experienced in the past. Thanks again for the great software!"
Gregory Allan Clark

Businesses Face New Safety Challenges as Workforce Ages.

Businesses Face New Safety Challenges as Workforce Ages

As the number of employees over the age of 55 continues to rise, businesses are faced with the challenge of retaining these valuable workers while reducing health- and injury-related losses. Studies by the U.S. Bureau of Labor Statistics show aging workers have fewer workplace injuries, but diabetes, hypertension and other age-related ailments are increasing employers' costs associated with medical insurance and lost work production.

Businesses can help mitigate their losses by improving policies and workplace design to allow employees to continue to work in a safe and healthy environment, said Tina Minter, a loss control specialist with the Chubb Group of Insurance Companies.

"Older workers are highly valued by employers for their judgment, flexibility, experience and creativity," Minter said. "Fortunately, many of them will work beyond the traditional retirement age of 65, due partly to advances in health care. This presents both opportunities and challenges to businesses, which will need to adapt to maintain a safe work environment for these workers."

Minter and her colleague, Russell Dronne, a Chubb loss control specialist based in New York, recently led a session, titled "The Aging Workforce: It's Not Just Ergonomics," at the American Society of Safety Engineers' (ASSE) Professional Development Conference and Exposition, Safety 2008, in Las Vegas.

Although injury rates among older workers are lower than those of their younger counterparts, according to the Bureau of Labor Statistics, other factors can contribute to increased health and safety exposures: age-related chronic disorders and diseases, loss of hearing, impaired vision and physical and cognitive limitations.

Minter advises businesses to take action to address these risk factors. Some examples of what businesses can do include:

a) Allow for flexible work hours so those with poor night vision can adjust their start and finish time to coincide with daylight hours.

b) Encourage employees to use the health care system for preventative well visits.

c) Eliminate heavy lifts, elevated work from ladders and long reaches.

d) Encourage employees working at a computer to take small breaks every 30 minutes.

e) Don't rely on sound as the sole means of emergency communications, as employees with hearing loss may not hear announcements.

"Employers should include older workers in the design process and seek outside professionals for assistance in adapting the workplace, training and human resources policies to fit the aging workforce," Dronne said.

Minter's and Dronne's session was one of seven led by Chubb loss control specialists at this year's ASSE conference. Other topics covered by Chubb included nanotechnology, global supply chain exposures, fire protection, sprinkler design and OSHA inspections.

Chubb's Loss Control Services unit provides loss prevention and premium audit services to more than 100,000 customers annually. With more than 400 risk engineers around the world, the unit offers Chubb customers specialized assistance in disaster planning; fire prevention, detection and suppression; employee health and safety; cargo security; preventive-maintenance planning; and asset protection.

The member insurers of the Chubb Group of Insurance Companies form a multibillion-dollar organization providing property and casualty insurance for personal and commercial customers worldwide through 8,500 independent agents and brokers. Chubb's global network includes branches and affiliates in North America, Europe, Latin America, Asia and Australia.

Nine ways to win an argument.

Nine ways to win an argument.

People argue all the time and most of the time it is the people who are most aggressive or loudest win specially if they are wrong.

Winning, is not the matter of being the loudest or the most aggressive but being clever and diplomatic and giving it back to your opponents without he/she realizing it.

Here are NINE tips :

1) Re-word

Re- word the opponents logic in such a manner that it is most favourable to your point of view. For example, if your opponent says that you should not increase the price as the distributor will not like it.

You can start by saying that, " You mean to say that I am the distributor's enemy and do not take into account their welfare………" exaggerate and misstate your statements .and then in the mock hurt tone say that "That's not what I said at all…putting he dealer in defensive.."

2) Categorize the arguments to an unpopular category

If you categorize the opponent's argument in an unpopular category it is associated with all the negative emotions. For example if somebody is arguing that you should increase the price as the cost input has risen , you can counter by saying that it is like reverting to the cost plus margin approach of the license- raj period…..

This way the audience will start visualizing the negativity of license raj and associate it with the opponent's point of view.

3) Liken the idea to something which has been tried and has been the failure

For example, if your opponent is advocating reducing the price to gain market share
tell him/her that the same strategy adopted by Coke/Pepsi by reducing the price to Rs. 5/- had not worked and had also affected adversely their bottom line…..

4) Ask for proof

Most of the fast and furious opponents try to pull a fast one by misstating or twisting the facts. Ask for proof, there is a 50 % chance that your opponent has twisted it to his/her advantage and if it so, he/she will lose all credibility. If the facts are found to be true then he/she will not gain anything and you will appear as a diligent person.

5) Agree in principle but discuss the details

Agreeing in principle is a very clever stalling technique and is used quite often with people where sensitivities are involved, for example if you cannot openly disagree with an important client or a senior person you can state that you agree in principle …. . . The person will be elated getting the impression that you have agreed with him/her but the matter will remain unresolved as the specifics have not been discussed or agreed upon.

6) Interrupt

A below the belt strategy but very commonly used in todays dog eats dog world .
This strategy is very effective specially if your opponent has a much stronger case.

7) Admit nothing

Generally, at the start of the argument some basic assumptions are taken , do not accept and challenge them. For example if your opponents starts saying that in this recession times we should increase the market spend rather then cutting it… challenge the basic assumptions saying that I do not agree that there is a recession… The opponent will get distracted and instead of arguing his main point of view will spend his/her energy in proving there is a recession.

8) Question their motives

If you hint that there is some hidden agenda in the opponent taking a particular point of view, the opponent will be in the defensive and will try hard to refute your accusation or will not strongly push his/ her point of view.

For example if your rival is complaining about the uncompetitive salary structure of the company, you can turn around by saying are you complaining just because you have been given the stiff target to recruit n no. people in a month….

A dirty trick for dirty rivals

9) Appeals to other in the room

Bring in the third person specially the person who is favourable to you. This will help in depersonalizing the discussion and distracting your opponent.

You can start by mentioning that let us hear what Ram has to say about this …..

Adapted from Mark H. McCormack book on Communication.

Where angels don’t fear to tread.

When A Rookie Entrepreneur Is Not Yet Ready For Venture Capital Funding,It Is The Angel Investor Who Gives That Person Wings.

BUSINESS aspirant Madan Pandit quit his job in 2004 and roamed Bangalore’s cyber cafes to build the prototype of an online search analytics tool, which he later converted into his first venture. When he needed funds for the start-up, he didn’t consider venture capital (VC) firms but approached well-known angel investor Kanwaljit Singh. With an unproven technology and hardly a business model to speak of, he still succeeded in getting the funding.

On the other hand, Phaninder Sama, cofounder of Redbus.in, an online bus ticketing site, ran his new business for around three months before making a venture capital pitch. He and his partners skipped the angel step altogether. They, too, got the money. In fact, the new image acquired by the VC connection helped them hire high-class talent.
Two entrepreneurs. Two radically opposite strategies. And both are happy with their respective choices today. So, how does one tell whether a new business should go in for angel investment or venture capital funding? It is indeed a crucial choice for a small company, because if an entrepreneur is not yet ready for venture capital, it is pointless to waste time pitching the business to VCs and more profitable to approach an angel.

Angel investors, often, are successful entrepreneurs themselves, fondly reliving their early struggles and wanting to mentor young minds. Some think of investments in start-ups as a way to give back to society. Others, who left India and made it big in the West, want to shrink the country’s economic growth curve with the stimulus their money would bring to entrepreneurship. Thus, they are driven first by the beauty of new ideas and only then, by return on investment. They can put in as little as a few lakhs of rupees to as much as several crores.

Venture capital funds, on the contrary, are professionally-driven enterprises which pool in resources from their investors and channel them into ideas that are more likely to succeed. They often look for a proven, or at least a well thought-out business model, cash flow, management bandwidth and so on. They also look to invest a sizeable amount of money, say a few million dollars.

“By default, you would always want to go in for VC,” Suvir Sujan, a venture capitalist with Nexus India Capital and a former angel investor, said. “VCs can get you further with capital. With an angel, you could get stuck, because there is only so much funding an angel can provide. After all, he is just one individual. The VC offers the stability of an institution.” However, an angel would be the option when VCs are telling you it is too early to invest in your company, he added.

Venture capital funds can be of immense help in building a company to maturity, after the business has cleared the initial hurdle of getting on the track. In an increasingly globalised world, marketing and hiring the best talent can be expensive and large investments are called for in the growth stage. Angel investors don’t have the financial muscle to shepherd their investee companies beyond a point. So, in reality, the two investors play for stakes in different stages of entrepreneurship, but their roles often overlap. To choose between the two, a thumb rule for an entrepreneur could be the stage at which a start-up finds itself. The earlier the stage, the more inexperienced the entrepreneur, higher is the need for angel investment support. Remember, the angel is likely to take more personal interest in the business than a VC could possibly do.

Madan Pandit recalls how he stumbled on Kanwaljit Singh at a social gathering. Talking to him, Pandit realised the investor was passionate and hungry for ideas such as his own and that he would be willing to bet on a horse that was yet to run a race. They continued to remain in touch after their first meeting. Eventually, Mr Singh took Mr Pandit under his wings. “I didn’t completely understand what he did. All I had was the framework of understanding as to why it would work. I also knew for sure that he had the relevant experience and that he had his sense of direction clear in his mind,” Mr Singh said. Pandit’s offering, which he calls a ‘post-Google solution’, is aimed at enabling analysis of information thrown up in a search so that the results could be used more effectively. This new thought was put on a firmer business footing with the help of Mr Singh’s association.

His business, just an idea at that time, could have been rejected by venture capital funds as too small and unattractive. They might have been discouraged by his lack of experience or doubted the viability of the product.

The community of angel investors is expanding rapidly in India and it is time entrepreneurs benefited from this class of patrons, experts said.

Raising venture capital is often a difficult task even for companies with a proof of concept. For the rookie, it can be a frustrating experience to get rejected repeatedly. Just the fire-inthe-belly won’t light up a VC’s imagination and the funding agency may reject an application on the slightest doubt. After all, VC panelists have to refer back to hard-nosed investment committees for approvals.

On the other hand, angel investors often work on a hunch. “They can take more risks as they are spending their own money. Angels invest in entrepreneurs because they like to do it. So it is okay if the entrepreneur does not have a revenue model,” said The Indus Entrepreneurs-Delhi president Saurabh Srivastava. Processes, balance sheet and market share, the staple diet of venture capitalists, are not so central to an angel investor’s strategy. Bharati Jacob, partner with SeedFund and also a former angel, said she invests in people who have the capacity to build a business, rather than on their revenue models and marketing strategy. “As an angel, I did invest in companies because I trusted the people. I didn’t necessarily know the sector as well.”

There are a number of ways to seek out an angel. The National Entrepreneurial Network’s (NEN) Online Resource presents a list of angel investors in India and simplifies the search process down to three points: 1) Ask everyone you know. This could include friends, family, acquaintances and even ex-bosses. 2) Research, and then cold call. You might find a potential angel from his blog or a news article or maybe someone who has had experience in a related industry. 3) Make use of existing forums: It is easier than ever before to be an entrepreneur in India. There are specific groups like NEN and TiE that have brought together experienced entrepreneurs to mentor and network freshers. These organisations can help hook up a young entrepreneur with potential angels. There are also numerous events conducted by organisations like CII and Ficci.

But each external investment comes at a price. You fork out a chunk of your company to the investor, angel or VC. An entrepreneur must be careful in how much stake he or she is ready to give away. Mohit Dubey of Bhopal learnt it only much later. His idea was to set up a website that would simplify the procedure of buying a car, new or used. His firm, carwale.com, started rolling with Rs 4 lakh given to him by a former boss and mentor, and raised Rs 12 lakh soon after.

Back then, he ended up surrendering a large chunk of his company for the initial investment. In retrospect, he thinks it may have been too much. Nevertheless, he looks at the brighter side and calls it a learning process. “If I were to do it all over again, I would have given out a lot less stake to the investors and consultants. If at all I would give out such a large stake, I would give it on the condition of performance.”

Article Resource:
Author: Jacob Cherian is the Chief Editor in the The Economic Times, Mumbai and the article appeared in one of their successful columns on Entrepreneurship/Start-ups called "Starship Enterprise".

Seven ways to avoid Growth Traps for Successful Entrepreneur

Seven ways to avoid the growth traps

SO, YOUR startup has become a success and is all set for the growth phase. Good luck, but take care to avoid the following traps.

Underestimating The Cash-Burn Rate

Here’s an all too familiar scenario: Projected revenues start taking off in year five, but it’s only year three, the company is still losing money and it only has 12 months worth of cash in the kitty. Remember: Growth is great, but only if you can survive long enough to watch it kick in. Until then, keep your belt tightened, temper those sales forecasts and make sure customers pay on time.

Misallocating Capital

Once you’ve raised some cash, spending it is all too easy. Too many growing companies end up investing in nonproductive assets, from costly marketing campaigns to fancy new office furniture, while the software they’re selling is still infested with bugs. Best bet: Put a formal system in place whereby any expenditure over a certain amount requires clearance by at least two key people.

Going On An Acquisition Spree

Market share is a good thing, and making an acquisition (or perhaps even forming an alliance or joint venture) can be a way of grabbing it. Shooting stars Cisco Systems and Google successfully inhaled scads of targets in the last decade. But then, those behemoths also used their richly priced shares as currency, making the prices they paid seem a lot more attractive. Sadly, mergers and acquisitions on the whole tend to destroy value, be it because the buyer overpaid or the integration flopped. Tread cautiously.

Forgetting Rules Of Good Customer Service

The first rule is obvious: Don’t be so fixated on winning the next customer that you forget about the ones who already paid and, with any luck, will put in the good word with their friends. But there’s another, less intuitive rule: Don’t be afraid to fire bad customers. These scourges demand lots of service but spend little— or worse, end up not paying at all.

Refusing To Delegate Authority

Sooner than later, a company will grow beyond the core management team’s ability to micromanage it. But learning to let go is harder than it sounds. “There are lots of people that start companies and do very well,” says Paul Marshall, professor of management at Harvard Business School. “But they haven't had to share decision-making authority and responsibility, and they find that hard to do.”

Relinquishing Too Much Equity Too Soon

True, most small businesses fail because they are undercapitalised. But selling off a healthy chunk of ownership and control — either to a venture capital firm or in a public offering — isn’t always the answer to fast cash.

Pocketing A Few Perks

It’s tough running a business, and no one works harder than you. Still, you have to battle the urge to put precious growth capital for that imported car. Investors won't like it — and employees may doubt your commitment to making their financial dreams (read: stock options) come true.

Reference:
(Adapted from Forbes.com)

When Business Thinking is married to Technical Ideas.

Business Thinking is married to Technical Ideas.

The Indian IT industry is currently witnessing a silent, but very compelling transformation, wherein technology is being viewed as a means to attain business ends, and not an end in itself.

If as developer a product to is he needs being is to developed be clear it in , whom the his mind for why developing , and how it would help the end customer. More than anything else, the focus needs to be on the usability of technology. This calls for a change in terms of the quality of IT manpower. The industry now requires quality brains that can make possible quality deliverance of high-end technical assignments on time and in line with customer requirements. So the pie is gigantic, but grabbing it would remain a dream until the manpower arms itself with adequate skills.

OPERATIONAL DEPTH BECOMES CRITICAL

Indian IT is now being associated with the entire business process, right from developing to the final delivery of a product. For instance, SAP Labs considers Bangalore one of its most important development hubs, since around 10 percent of its patents come from India. Believes Shailesh Shah, Director & Senior VP, Corporate Strategy Group, Satyam Computer Services, “There is greater focus on IT consulting, project management, engineering design and product development leading to substantial revenue streams.”

NOSE FOR BUSINESS IN TECHNOLOGY

So more than just cost effectiveness or technological knowledge, the traits that will set the Indian talent pool apart from other contenders is the ability to understand how the technology they are working on enables business and to think from an entrepreneurial point of view. This means that one needs to be a business technologist to rise in this industry. As Arvind Mishra, Executive VP & Global Head, Talent & Change, Polaris Software Lab Ltd., says, "As the IT industry matures and tries to provide high margin, complex solutions, there is a shift from being purely technical to becoming techno-functional. The software professional today is required to gather domain knowledge. Unlike in the past, when one was called a Java or ‘C’ specialist, the focus today is on whether a person is into banking or healthcare or manufacturing.”

Innovation would be required both in IT services and product development and R&D. Indian IT is already a known name in the ITES space. And in the product development and the R&D space, India has become a hub where the top 10 product companies in the world have set up development centres.

Srinivas Raghavan, VP-MD, Bally Technologies feels quality is becoming the core of Indian services, specially in the area of solution implementation. He says, “The Indian engineer is very good and getting better at implementing solutions on-site wherever the location might be in the world. In future, the number of Indians working at customer locations around the world and implementing solutions for them will only increase.” He feels, nevertheless, that the country should continue to retain its cost advantages.

EXISTING BOTTLENECKS

According to industry estimates, out of a requirement of 2.3 million people, India will fall short by 50,000 relevant IT professionals by 2010. What is to be noted here, is that the fall is not in terms of numbers but in terms of relevance. Only 25 percent of the total technical graduates and 10-15 percent of general graduates are industry-relevant. Added to this, there is no proper grooming of talents at the school/university level.

So what is the way out? Many feel grooming should start at the primary level since logical thinking starts at the primary school level. The need is to address primary education and not build a poor-quality manpower base at the primary level. The industry feels that Indian engineering students, even after four years of studies, are not readily deployable. What’s needed is a close collaboration between the industry, Government and academia to build up a proficient pool that can sustain the growth.

Article Resource:
The article appeared in The Economic Times, Mumbai in one of their successful columns on Entrepreneurship/Start-ups called "Starship Enterprise".

Balancing Hiring Needs with Growth.

We are a start-up and we don’t have a brand.We want to expand by hiring more, but human resource consultants are expensive. In some cases, they charge more than the hiree’s one month salary as commission.We can’t afford this. How do we go about hiring good talent without spending too much that can strain our meagre resources.

The second question is how do we motivate existing employees when we hire more. As the staff strength grows, they start feeling neglected and begin to leave for bigger brands.

How do we deal with this?

On the first question, it is a very tricky area. If the entrepreneur’s need is special and he has no network to feed in the talent required, then it is imperative to have an HR search firm working for him. What you could do in this case is try and negotiate with the consultants. For example, enter into a longer-term contract with them saying you would hire more people down the line and have an exclusivity contract with them. May be this would get you a better deal in terms of cost-to-the-company. You could also make contingent arrangements wherein the fee would depend on the calibre and quality of the talent supplied. The industry norm is that these consultants charge a certain percentage of salary that the hiree gets. Negotiation is the best way out of this dilemma. Search consultants are like real estate agents. They get paid if they find you the right asset. So you can base their fee on the value of the asset they find you.

The second problem is pretty typical. Today, every entrepreneur in India faces such a problem. There is no easy answer to it, but there are multiple ways to address the problem. The norm for most companies is to pay the market rate or not get talent at all. You could tap into your existing people and not look outside and train them to do any new task that may have come up. But if you look outside, you have to accept that internal inequity is always possible. The decision is solely yours. Before hiring, also ask is it a long term need or a short term need? If it is short term, do not risk inequity. Hire part-time consultants to carry out the new responsibility. If it is a long term need, then you have to figure out who are the right guys for the job, internal or external. If you realise that the choice is an external skill set, then you have to shift to risk mitigation. Communicate the value of the new hire to your existing employees. Poor communication with the employees brings in inequity. Talk to employees about the need to hire from outside. What additional value the new person brings to the company and why is it fair to pay a higher remuneration to the new person. When you do that, you have built support for the new hire. And as is the case with most employees, they are rational people. They will understand the situation. There may be cases when your existing employees also want to be part of the new responsibility. Get them to shadow this new guy and learn from him. And when future opportunities arise, try them out. Lastly, the only thing people resent is when they feel they’re being taken advantage of. Don’t ever be unfair to your existing people.

Reference:

RAJAN SRIKANTH, Asia head of Mercer Human Resource Consulting