Finding A White Spot On A Black Board

'I am thankful to all of those who said no. Because of them I did it.' This is a famous sentence from none other than Albert Einstein. He does not focus on the thing that all of them said 'NO'. He focuses on he DID it. It is not an easy trait. Being right is very normal. It seems nobody notices it. It is only the wrong things that many notice. 

Once an artist had drawn a big beautiful painting. He was so happy with the result. One morning, he kept it in one of the city squares and wrote a note below it saying, 'Please point out if there are some mistakes'. He came in the evening to find that there were many pointers about the correction in the painting. He was quite dejected. At that point, his guru comes there. He understands his pupils dejection. He could see that the painting is indeed very good. He asks the artist to make the same painting again and place that again next morning. When the artist came next evening to see the painting, he could see that no body had pointed any correction on the painting. The artist then looked at the note below the drawing. It read, 'If you find any mistakes in the painting, please correct it'. 

It is a surprise that none of them had any suggestions for the correction in the same painting the next day. Actually, if you look around, there are many who may laugh at you or point fingers. But there are no doers or very few of them. People can criticize even the slightest thing, but they do not understand that it is very difficult to make things happen. When you find yourself in such a situation where your plan has failed or your project has failed, it is very difficult to get back to regular work. In such times, you should look for the silver lining in what has failed. It is not the good times when we know who are real friends, it is rather the bad time which tells us who are our real well-wishers. Who stands with us and who leaves us. 

1 From 100 Rather Than 100 From 1

This is famous line of none other than the legendary Mr. Warren Buffet. As per Mr. Buffet, we should have rather 100 income routes with low income rather than having one income route having a very high income. This is to say that when you have more different incomes, it is safer because even if you lose some routes, you will have decent income from other routes. The same idea can be applied to your business. Rather 'can be', it 'Should be'. 

If I were to put it in numbers, you should have no customer having bigger than 20-25 % business share. This is very important. I have heard of many businesses which were doing great, but were dependent on only one or two customers. When such a customer backs off due to internal (part going obsolete, etc) or external factors (your competitor offering lower cost, etc), you are the lone sufferer. You cannot do anything but lose business. And things may come to an extent where you may have to shut shop. Another thing is that if you have one such customer, he may become very dominant. It might go to such an extent that you may be forced to accept most of the clauses or else you may lose business. It goes without saying that if you have no customer bigger than 20 %, you will not be threatened and will be safe even if some of your customer goes off. 

This is not to say that this is a pleasant condition. You should do whatever is in your hands to retain customer. But, you will not have any negotiating position for that. If you have such a business, where you are dependent on only one or two major clients, please take the steps now itself to increase your customer base. If any customer is now 50 % or more than 50 %, then add so many customers that the same big customer share is only 20 %. Your business will also increase and your risk will be mitigated.

Acceptance IS Very Important

There are setbacks. Everybody has it. Ask the most successful man and he will tell what struggle he has faced. The important part which separates rest from the best is how the successful people bounce back from the setbacks. Setback is the most important time. Many a careers break due to a setback they suffer either professionally or personally. Some people are just not ready to accept the setback and it is very difficult to come back to normal life. For some, the guilt or the fear or the grief that they faced is very hard to overcome and it changes their life in more ways than one. 

This setbacks don't let us think the way we should. It would cloud your mind with darkness and you would not be able to think positively. Instead of thinking about solutions, you will think about the situation and will be under tension, under guilt or under fear. To think ahead, you have to first accept the thing that has happened. 

It is for this reason that it is very important to accept the setback. When you face a setback - it might be due to any problem - the first message that you have to give to your mind is of accepting the setback. If the customer on whom you depend has been giving you tough time, give the message to your mind that - Yes, I accept that I am having a tough time because so and so customer is upset. I accept that there has been a situation which is not good. Once your mind accepts the situation, half of your tension will erase immediately. You will feel lighter. This step is very important, As this happens, you need to give message to your mind that 'All is Well'. Everything will be alright. While giving this message, you should be confident yourself that All is Well. Once your mind has accepted this, you will get the solution earlier than later. 

If you can practice the step of acceptance by lightly tapping on your chest or just between neck and chest, you will get better results.

Turnover Based Loans

For a trading unit, mainly dealers, the main business is to buy ready made stock and sell it at a margin. They mainly buy by giving upfront payment and giving credit to retailers. For manufacturer, business consists of converting the raw material into finished goods by adding value. For smaller manufacturers, it is difficult situation. Suppliers don't tend to give credit and customers don't give advance. As the production increases, their money gets stuck in the business. As the business needs money to sustain itself, the cash flow is extremely important. Fast Growth can also be one of the reason why cash gets stuck and the cycle stops. 

When we take a loan, the thumb rule is 20 %, i.e. you should have an annual turnover of 5 times your CC loan account. If your company has increased the turnover, you can approach your bank to increase the CC limit. You can also approach them to take a Temporary Overdraft facility which you can get once in a month. This is a sort of bridge loan and you can get it for one month. It depends on your bank whether they renew it for the next month. If your requirement has increased, then it is better that you approach for increase in CC limit only. 

In case there are problems due to the profitability and other balance sheet issues, then you can approach other banks. There are banks which will consider giving you loan despite your low profitability just because your turnover has gone up and you have hope to bring the business back on line with increasing the business. One of those NBFCs is Tata Capital Finance. Of course, this will again depend on case to case, but you will have hope if you can contact them. The loan though might be at a higher cost, as the risk is high.

Business Idea - Subscription Based Model

There are many new business ideas that are coming up. The e-commerce has sped up the launching and the business ability of many. Due to the rapid rise in e-commerce websites like Amazon, Flipkart, Snapdeal, Shopclues, people have become more and more aware about the use of debit card or credit card for online payments. Previously people were not very comfortable. But nowadays, people are more comfortable in doing the payments. People have also warmed up to the idea of buying online. 

There are two models in any business. First is the one-time buyer. The other is the repeated buyer of more or less same product. For example, grocery items, puja items, sport items, etc. The second model can be based on subscription model. For example, a subscription of one month, three months, six months or annual basis. Subscription model is a better one and should be attempted. For example, when you get a order from some OEM (Original Equipment Manufacturer) like automobile, home appliances, etc., you get a schedule each month. This makes it easier and needs only production planning with minimal marketing efforts. But this model can also be there for retail businesses. If you have heard the name of Flintobox or Magic Crate, these are the subscription based models for quarterly or six months where you can have a newly designed kit of play or models which makes concepts easy for kids in a fun manner. Then there are also puja kit items. If you are doing some specific puja, you need to order the kit. You do not have to run here and there. 

There can be any number of such kits. You can have food kits which would be hyper-local. You can plan food according to the type of customer and can have one month or two month subscription from them. You can also design a specific kit of fruits for people. You can have recipe kit which people will make. You can also have some grocery kit. You just have to get more wild in your thinking about the kits. You can have different set of customers and design a kit accordingly. The main advantages of subscription based models are that you are assured about the orders beforehand. You get more time to get new customers to subscribe to your kits. You also get all the money beforehand (if you plan to do so). You also get time to think what more you can do to make the kits better. Magazine, newspaper, milk are best forms of subscription based models. Have you ever heard someone giving buttermilk along with milk in the morning. You can offer that to your customer. 

Think about new ideas and new kits.

Connection With Colleges

In the last article, we talked about recruiting interns for some projects during their one / two month internship project. This would keep you in touch with some college teachers & professors. You can have your contact with Diploma, Engineering or MBA colleges. In fact, it is good if you have your network with a couple of colleges where students can come down to your factory for some industrial visit to get a real life experience with how industries work. The students are excited to see have first hand experience. You can also have some internship or summer project opportunities for students. You can invite students / professors with their own projects or you can have your own projects which these students might do. These students also have a final year project and it is considered good if they do it with some industry. When students do some project with your company, they will take your name in their college. This would make your name known to the students along with what you do. 

You never know when these students will come back in contact with you. It might be after a few years when they are looking for job or they are in either supplier or customer team. The connection with colleges can also come in handy in case you need some raw talent for new job at your factory. There are sandwich course opportunities wherein students could spend 6 months to a year with your company learning things. When you need man power, you can also put a word to these professors so that they can tell some of their students about the vacancy. 

From your side, you can also go for some guest lectures or as an external examiner for some of their oral exams. This will just create a bond and network with colleges and teachers / professors. After all, these very students are the future generation who will be a part of Make In India campaign. You need to guide these students.

Interns! How They Could Help You?

Summers have already started and it is very hot weather in March end itself. This is also a time when most of the MBA and Engineering colleges start getting holidays and have 1/2 months of projects with different companies. Normally many big companies are giving opportunities to students for doing internship. This is a good opportunities for small & mid-size companies too, to offer internships to such students. These students can be given a small task based projects like survey or opportunity lookout or marketing / launching of new products. 

What you can do is to approach some colleges so that whenever their students are ready for internship, they can come to your place for internship. Once the students have come, give them a clear guideline. First explain them the basis of the project. If you are launching a product, explain them the complete use of the product. Tell them who can be the target customers. And how to explain the value to the target group of customers vis-a-vis its cost. If there is some installation involved, the training should be given to them. These students do a good job if you have to do some survey about the competing products or if you are thinking of launching a new product based on the survey. 

If you want to use this opportunity to provide internship, then it is better to plan these projects quite early. You can plan a slew of projects so that whenever such students come for internship, your projects are ready. If the projects are not ready, it might not be as beneficial for either you or to them. It is also a good thing that you guide to such young students and give them some takeaways which they can keep for professional life. It is an opportunity to give something to society. Overall it is a win-win thing for institute, students as well as you.