Identify the Circle of Influence

When you decide on a Goal / Target, you should identify the Action Plan. Along with Action plan, you should also identify the Obstacles & the Opportunities. In the Obstacles, you should identify the Circle of Influence.

Circle of Influence is the one in which we have control. There are different factors, which we can internally control. Then there are external factors on which we have no control. These factors are the Circle of Concern. You cannot do much on the Circle of Concern - hence it is concern. These are the external factors over which you can have little control. The factors such as Taxes, Inflation, Views of Other people, Terrorist Attack, Earthquake, etc. are all things over which you cannot do anything. You just have to put these things aside so you do not waste your time & energy on these. You should always focus on what you can do and what is in your hands.

Whenever we think about our target, we should always think about the Circle of Influence. Because these are the things which we can plan, we can change and adjust as per our need. The are in full control of us. You should have short term as well as long term strategies for these. It is in your hands to learn new things, it is in your hands to vary the prices of your products till it gets acceptability. It is up to you to check the costs and keep your overheads in limits so that you can take out profits even at low level of sales. These are all under your Circle of Influence.

First thing you need to do is to identify your target, obstacles, opportunities & the circle of influence.

Second Surgical Strike By India PM Narendra Modi

Last couple of months have seen some big firing along the borders. Some of our soldiers had to give their life. Our PM then planned Surgical Strike on Enemy territory and destroyed the Terrorist hideouts in their territory. After that there were many shootouts along different regions on the border. The basic reason behind that is the black money being circulated via different nations to fund the terrorists. This money is used to buy ammunition and this is then used against our own army.

This blog is not very Business Like. But I am sure this will be one of the big things I am watching in my life. The thing that will change the whole Indian Outlook. Today our PM enacted a second surgical strike and that is on the black money. Black Money - The money which is kept in hideouts without paying taxes. First, time till 30th September was given. After that this is the first surgical strike done by the Government. People can now submit their notes of Rs. 500 & Rs. 1000 in banks or post offices till 30th December. People who have legitimate money need not panic as they can give declaration and still deposit the notes in designated RBI offices.

On second thoughts - Can this money be given to poor by the rich? Poor who do not have much income or who have very big gap before the taxable limit of Rs. 2 lakh comes in. This way, poor will have some money in their account and will be boon for them. Indirect help to poor by our honorable PM.

Theoretical Calculation - Great Way If This Can Be Applied Practically.

I am going to write one sentence, which you may have to read it again to understand. This is very powerful.

If we invest Rs. 10000/- each month for a year, and have 10 % returns in one month, with complete stock sale/turnaround and invest the amount again without any withdrawals, at the end of the year you will have Rs. 2.13 lac stock.

The below table is just for demo.

Interest
10%	1	2	3	4	5	6	7	8	9	10	11	12
1	10000	11000	12100	13310	14641	16105.1	17715.61	19487.17	21435.89	23579.48	25937.42	28531.17
2		10000	11000	12100	13310	14641	16105.1	17715.61	19487.17	21435.89	23579.48	25937.42
3			10000	11000	12100	13310	14641	16105.1	17715.61	19487.17	21435.89	23579.48
4				10000	11000	12100	13310	14641	16105.1	17715.61	19487.17	21435.89
5					10000	11000	12100	13310	14641	16105.1	17715.61	19487.17
6						10000	11000	12100	13310	14641	16105.1	17715.61
7							10000	11000	12100	13310	14641	16105.1
8								10000	11000	12100	13310	14641
9									10000	11000	12100	13310
10										10000	11000	12100
11											10000	11000
12												10000
											Total	213854.8
Amount Invested Each Month=10000. Returns Each Month: 10%. Assumption: Complete Stock Turnaround per month. Complete reinvestment.

If you are able to do the same turnaround in two months time, then you will have Rs. 1.6 lac stock. The calculations gives an idea about the turnaround of our stocks. From the time that you buy your material to the time of the sale, if you do complete turnaround in quick time, you will be far ahead. You just watched that you can quickly build wealth if you set short turnaround time and put in the money again in to the business. 

Target for Sales

When you are deciding for your goal or target for any period, say month or week or year, you should also make certain plan to achieve it. And by default you should have plans for 120% of your targets. For example, if you are targeting a sale of 50 lakh, then you must actually plan about how you can sale for 60 lakh. When you make schedule for 60 lakh, you will almost always clear your targets of 50 lakhs.

This happens because you will have some schedule or sales cancel, you might not have raw material or design or packing material or labor or such things which can miss your targets. When you have written plan for your targets, your major work in the morning Time would be to review the list and push things which have remained behind.

If you do this, you will see that in coming days you will not only meet your targets consistently, but even surpass them.

Online Presence with Website

If you are having a business, especially for product or services which are location wise irrelevant I.e. your products can be given all over state or country, then you must have online presence. I have seen quite a few business who don't have online presence at all. Online presence of business brings some credibility to it. If certain customers want to check about you, it would be always positive if they can find you by searching about you.

You can put your business on IndiaMART, tradeindia, justdial, etc. Without spending any money. Though your page will not appear in product searches, but if someone is specifically looking for you, they can find it. It would be even better if you have your own website. Some of you might think why to spend money if you are well off. But you must also see, how much you are spending. You can start with Rs. 200/yr for first year & actually pay only Rs. 600 odd per year. This is just for renewal of your domain. Once domain is yours, you can just redirect it on other site, like your page on IndiaMART, for example. You can have full fledged website with different pages with feedback form, virtually free of cost, with your control & only with price of domain name.

So go ahead & register your website without pinching your pocket.

Diagnose Your Problems Correctly

Our day to day work is about solving problems. We look for solutions so we do not have to look at that problem again & again. For this, it is extremely important that the diagnosis of problem is correct. It should not happen that we have stomach ache & we eat medicine for cough.

And sometimes it goes very wrong when we diagnose wrongly & invest heavily & at the end of it find that the problem still exist or was due to other reason. I got the below mentioned story which will explain you the situation & also make you laugh. Just remember the Moral of story.
—-----------------------------

One fine day, a bus driver went to the bus garage, started his bus, and drove off along the route.

No problems for the first few stops-a few people got on, a few got off, and things went generally well.

At the next stop, however, a big hulk of a guy got on.
Six feet height, built like a wrestler, arms hanging down to the ground.
He glared at the driver and said, "Big John doesn't need to pay!" and sat down at the back.

Did I mention that the driver was five feet three, thin, and basically meek? Well, he was.!

Naturally, he didn't argue with Big John, but he wasn't happy about it.

The next day the same thing happened-Big John got on again, made a show of refusing to pay, and sat down.
And the next day, and the one after that and so forth.!

This grated on the bus driver, who started losing sleep over the way Big John was taking advantage of him.

Finally he could stand it no longer.
He signed up for body building courses, karate, judo, and all that good stuff.

By the end of the summer, he had become quite strong; what's more, he felt really good about himself.

So on the next Monday, when Big John once Again got on the bus and said, "Big John doesn't pay!," The driver stood up, glared back at the passenger, and screamed, "And why not?"

With a surprised look on his face, Big John replied, *"Big John has a bus pass."*

Be sure of what is a problem in the first place before working hard to solve one.

*Quite often in life we over-evaluate the problems and start working on huge solutions spending time, money, efforts, energy and focus, whereas, in actual, problems eventually are not that big!*

Most of Our life is actually as above story !

How to Manufacture at Low Cost

We were researching market for some product - automotive - three wheeler. The product was assembly of 3 PC & weighed almost 100 gm. We could buy this unbranded product in Rs. 10/-. We thought how is it possible? The part is steel part & also hardened. We got to know that this is from Ludhiana. We heard a lot about Ludhiana after that. We thought that we have to visit the place to see for ourselves.

We set out for Ludhiana. We went around the place & found that at one small place 2/3 machines were there & they were machining some part. They were making a spherical shape. Then we met one person & told him that we are interested in buying. We also asked him how they manage to sell at so low prices. He told us that his main work was packing & marketing. He bought raw material & gave to some households or such small workshops which were entirely run by families. There was no time based job here. It was result oriented. When job is result oriented, they will be paid as per the production. Even the rejection was deducted. The result being responsibility. People worked with responsibility & worked hard. The whole family would work on one machine. The volume of work would be so much that they didn't have to change setting. They did only one part. Normally there are two cycles of heat treatment in steel- one hardening & other tempering (stress relieving). These people did only hardening for a solid pin. Cost saving.

I will not say that all people/ manufacturing in Ludhiana work like these. But I am making a larger point. First, high volume & only one type of job. This makes easy special purpose machines which can be operated by less skilled people. Margins less, but high volume. Second, contract manufacturing. Instead of employing people, if you give contract or buy from outside (even on job work), results will be better quality & lesser hassles.

I have been to China. Among other things that make cheap production possible, is cluster manufacturing. There are several industrial clusters, which develops an ecosystem and makes process costs lowest. High volumes help it.