Categories
Startup

5 Tips for an Early Stage Fundraising from a Venture Capitalist

कारोबार
कारोबार

Early Stage Funding to Sale your Business

Early-stage fundraising is looking at for high potential and growth companies. You should have a clear sense of your vision and a passion and be able to convey that to investors. To help eliminate some of the myths and shed light on what goes on when pitching the VC investors, here are a few tips to practice that can help you in this process:-

1. Offer a solution to a problem.

  • Firstly, you need to find a solution to the problem that can impact a large number of people to entice a venture capitalist for an early stage fundraising.
  • After the problem has been identified, the investors always look for the solution so make sure that solution is clear, to the point and here to stay.
  • Now you have to show your investor how your company and product will address the problem.
  • Most of the entrepreneurs concentrate on the product when instead they need to focus on their customers and the burning problem the customer is facing.
  • Try to use stories and pictures when you explain the execution process.
  • Explain your product and services very clearly to avoid any kind of confusion.

2. Revenue Model

  • Now that you have already explained your product/service, you then have to explain about how fast you company is growing and what are the revenue projections you expect during your pitch for an early stage fundraising.
  • You have to discuss how your pricing will fit into the market you are addressing.
  • The investor is always interested to know how you will undercut the existing solution with your pricing and will your customer be ready to pay that price?

3. Milestones

  • Investors like to spend more time at this point.
  • It talk about the growth seen by your company over the last year and what will be the projected growth in the next  3-5 years looking at the finances and business model.
  • Your operations plan can also be shared in this slide which can include distribution channels being used, operational structure and the big plan to make money in the future.
  • No one can predict where you will be in the next 3 years but the investors would like to see your future plans and the financial knowledge to reach there.
  • Do share your profit and loss statement for the last and the next 3 years. Giving your investors a clear picture will lead to early stage fundraising.

4. Target Market

  • Make a list of data of your ideal customers and how you will position your product in the market.
  • This is where you tell the story about the scale of the problem you are trying to solve and the scope of getting success.
  • Always remember that the more specific you are with your targets, the more realistic your pitch will be to get the early stage fundraising.
  • Your market will decide whether you are able to get the funds or not because if you are operating in a small market then the investors might find the ROI small and therefor consider it risky to fund.

5. Actively ask for feedback

  • Touch base with the investors after the meeting and actively ask for feedback.
  • The information you receive can help you refine your pitch.
  • Do not make changes based on every single piece of input. Only adopt what you think is the most important feedback for your company.

Entrepreneurship is one of the greatest experiences in the world. If you are choosing an investor make sure your dream & vision of the company remains intact despite taking money from someone. So choose the right investor and work towards getting early stage fundraising.

Categories
Legal

Must-Have Terms in a Partnership Agreement

एमएसएमई
एमएसएमई

Critical Points in a Partnership Agreement
 

A Partnership is a legal agreement between two or more individuals who decide to do business together. All the partners involved have a share in the assets as well as the profit and loss of business. It documents the responsibilities of all the partners.

However, the partnership agreement differs from business to business depending upon its scale and objectives. Also, a partnership agreement is subjected to laws governed by the state. 

Let us see the key aspects of a partnership agreement that business owners need to keep in mind.

1. Percentage of Contribution-

The first and foremost thing that needs to be documented in a deed is that how much each partner will contribute in the business.

The agreement should clearly define the contribution by each partner in terms of money, time and efforts 

2. Distribution of Profits-
 

This is one of the most fundamental aspects of a business partnership agreement. How much would be the share of each partner in profits?  The agreement must outline how the profits will be distributed amongst the partners.

It must also state how what each partner will be paid. 

Decision making-

This is the most crucial aspect of the agreement and important for smooth business operations.

You must differentiate between the decisions that require a unanimous voice or the ones that can be taken by a single partner.

A provision must be there in the agreement to address the disagreement or dispute between the partners.

3. Partner Authority-
 

Can any of the business partners bind the others to a contract without consent? The answer is Yes! That’s why it becomes important that the binding power or the partner authority is clearly defined in the business partnership agreement.

It will save the company from unmanageable risks.

4. Resolving Conflicts-

A clause regarding the dissolution of the disputes must also be included in the terms and conditions of the agreement. 

If an issue has not been resolved with the business partners then a provision in the agreement will help ease the process of dissolution.

5. Withdrawal or Demise of a partner-

An unfortunate contingency can occur anytime. A smart business owner should be able to foresee and must be prepared for it.

If a partner withdraws due to disagreements or god forbids has a sudden death then a clause of departure must be included in the agreement. 

A good agreement has a buyout provision that helps in determining the business value and how the departing partner will be paid. 

Discretionary Clauses that can be included in a Partnership Agreement:
 

The above-mentioned aspects constitute an essential part of the business partnership agreement. However, there are a few other factors that should be considered before drafting the agreement. These are: 

Non-Competitive Clause-
This clause not only limits the partner from leaving the partnership but also restricts him from competing with the business partners within a restricted time frame.

Non-disclosure Clause, Non-
Solicitation Clause: This clause limits business partners from revealing the proprietary business. In other words, you cannot revel to any other person, corporation or firm any confidential information about the enterprise. 

It also restricts partners from soliciting employees away from the business partnership which means prohibiting an employee from utilizing the company’s clients, customers and contact lists for personal gain once they leave the company

A business partnership agreement is significant for every business arrangement. It not only ensures the smooth functioning of the company but it also protects the rights of all the partners, their overall investment and the longevity of the business. 

Categories
Powerful Personalities

Top 10 Success Mantras by Dr. Vivek Bindra

Climb the Ladder of Success: Tips by Dr.Vivek Bindra

In this fast-paced world of today, success is what everyone is striving to achieve. Following & understanding a few success mantras for business, can help entrepreneurs take their company to newer heights. Though success depends on various factors, but the will to conquer challenges & the patience to taste victory is vital for all. 

Dr.Vivek Bindra, an International Motivational Speaker and Founder of Bada Business.com has always empowered entrepreneurs to grow their business. What is the success mantra behind this?

What qualities make for a good entrepreneur? Here are 10 success mantras for your business by Dr. Vivek Bindra.

1. Set a Goal and do Everything to Reach that Goal

  • It is very important to know what you want. Have clarity of thought as that will show you the right direction and is perhaps the first success mantra in business
  • Be clear on who has to deliver what. This will help in delegating responsibility and accountability  

2. Identify your Unique Signature Strength

  • You need to know what is your strength and work towards using that as the core of your business
  • If this strength energizes you to do better, then that is one way to identify your sole character strength
  • If finance or product building is your signature strength then look after business functions related to that and enhance your learning curve around it

3. Openness to take Risk

  • An important success mantra for any entrepreneur is that you need to take risk in business. If you don’t take risk then you are playing too safe to achieve your dreams
  • Be limitless, you have unlimited potential, the only thing you need to work towards is exploring this potential and putting it to productive use
  • When you stretch your limits and take risks, you will grow
  • As Dr. Vivek Bindra says, ’Bigger the hassle, bigger the premium’

4. Take Advice from Someone who Brings Out the Best in You 

  • Entrepreneurs do take advice or help from friends, family, business partners or their mentors. Make sure that person brings out the best in you
  • If you feel alive, positive and a get a true feeling around that person then there is no harm in following the advice
  • This also includes your customers, listen to them and their feedback. Listening to your consumer is the best success mantra for a business. It not only brings out the best in you but in your business as well

5. Make the Most of What You Have 

  • Don’t be upset over what is not there with you, as you don’t have control over those things
  • Make the most of your employees, look after their welfare and they will be productive & efficient

6. Focus on the Cycle of Possibility

  • Focus on possibilities and not the problems during tough times. Possibilities will only lead to opportunities
  • Divorce yourself with a circle of difficulty
  • Break your rigid beliefs and learn to shift gears. Being flexible and adaptable are the best qualities an entrepreneur can develop as a success mantra for his business

7. Start Measuring your Efforts to Improve

  • Use analytics and data analysis to take your decisions
  • Track your growth and make a note of the changes
  • Measure the kind of effort you are making, only then you will know how much you need to improve in the business domain
  • Don’t take emotional decisions, backing it with facts should be your success mantra in business 

8. If you Fail, you got to Bounce Back

  • Failure is the recipe to triumph; you need to fail before tasting success
  • Do not lose heart, even the most successful of entrepreneurs have failed in their journey
  • Have all the self-belief and confidence to take up the challenges, and try newer things or ideas to grab more knowledge or learnings
  • As Internationally Acclaimed Motivational Speaker Dr. Vivek Bindra says, ’Every negative incident has a positive intent’, when you look back in hindsight you will notice how true these words are
  • ’You can, You will, Bounce Back’, swear my this motto and put it up where you can read it every day

9. Have the Right Attitude

  • Have a positive attitude; once there is negativity in your thought, it is very difficult to come out of this vicious circle.
  • Have clarity of thought as you have to fight your own battle. A negative attitude is disastrous not only for your business, but your personal life as well
  • Positivity & Passion is the perfect success mantra in business

10. Be a Leader

  • An entrepreneur must possess leadership qualities to run his company
  • The employees look up to their leader or boss in situations of confusion or tough times. You need to be a decision-maker in such situations
  • Be bold enough to take the onus of your decision and not put it on your team
  • Make the employees a part of your success journey. Their hard work is equally responsible for any milestone the company achieves

These are all ingredients to the recipe of success. Your winning attitude & a humble outlook will be the cherry on the cake. If you follow these success mantras by Dr.Vivek Bindra, surely you and your business will be unstoppable!

Categories
Legal

Everything You Need to Know About Company Laws

Legal Basics that Every New Business Should Know

The Companies Act of India was created in 1956 to ensure one thing, that a company is treated as a separate legal entity from the people who are running it. This was primarily done if due to any gap or removal of a member/partner, the company does not end.

When you are starting a company, there are many legalities that you should know about when you are planning to run a business.

1. Company Formation
 

The Companies Act, 2013 which is more refined and covers many more aspects of business than

the previous Act. It explains what type of a company you need to choose and run. According to the

Companies Act of India, you can choose between the following:

  • Sole Proprietorship
  • Partnership
  • LLC
  • Private Limited
  • Family Business

The companies Act, 2013 lays down the rules and regulations on how each of these firms can be set up and what are the legalities you need to follow

2. Understanding Tax & Accounting

  • One of the reasons you need to choose your legal entity smartly is also because it will decide the amount of tax you are going to pay and the Companies Act of India gives a detailed account of it.
  • You need to know the income tax you are liable to pay to the government and if there is a cess over and above that. Each legal entity has a tax structure they need to follow. Some legal entities are also entitled to a few exemptions which can be found out by going through the Act in detail
  • Maintaining of accounts and bookkeeping is essential for SMEs to manage their money smartly
  • Financial Statements will help in keeping a check of your debts incurred, expenses and profits made. This will help in managing your funds optimally

3.  Raising Money: Checking financing options

There are 3 types of financing options that you can explore:

  • Finance through Investors– When you are getting capital from a VC, then these are the must have documents- letter of intent, share subscription agreement and shareholders agreement 

There are many forums where you can get a list of Angel Investors & Venture Capitalists who would invest in your business and claim a stake in your profits

  • Finance via debt or loan- The main documents needed are- application for loan sanction papers, sanction letter, loan agreement letter and collateral documentation. Now days it has become very easy for SMEs to avail a loan from the bank.

The Government has also introduced many schemes and initiatives under which SMEs can apply for a loan

  • Self-funded- Obviously self-funding is the easiest and the most hassle-free finance option out of the lot. You can use your own money or borrow from your close relatives or friends to give your business that boost

4. Labour Laws

Like the Companies Act of India is needed to set up a company, similarly you need to abide by the Labour Laws when you are hiring for the company and formulating employee agreements

5. Dispute Resolution & Contracts

When you are starting a company and formalizing a structure it also important to know how contracts are formulated and if a dispute arises, how can you solve it.

The main aim is to:

  • What works under Indian law and what does not?
  • Traps to avoid; and
  • Practical drafting solutions

It is advised to agree to an offshore arbitration where possible, if not then go for an Institutional arbitration with a neutral party. Try and keep it as simple as possible

If you are setting up a company and going to run a business, it is important to understand the know-how of the Companies Act 2013 because this sets the foundation of all the legalities involved in running and managing an organization. 

Categories
Startup

A Survival Guide for Early-Stage Startups

बिजनेस
बिजनेस

Early Learning Advantage: A Survival Guide for all Startups

Starting a business and growing it through the early stage is a difficult task and the only thing that comes in handy at that time is a startup survival guide. 9/10 startups fail in the first 3 years of their operation depicting a poor startup survival rate. So how exactly can you survive in the early stages of starting up? Determination, planning, and a little bit of luck can go a long way in marking your success. Here is a startup survival guide for many of our new entrepreneurs.

1. Get the right Founding team

  • Your team will make the pieces come together and pave way for success. The first step in the startup survival guide is to get the right founding members for the business
  • Look at people with diverse strengths that can be an asset to your business
  • The founding members should be trustworthy with a mission to make the business succeed rather than their own success

2. Implementation of the Idea
 

  • No matter how much research has gone behind the business idea, but if the implementation is not up to the mark, the startup will fail to take flight
  • One of the main reasons that the startup survival rate is so low because entrepreneurs fail in the implementation phase 
  • Slow down with your speed. You might think that the idea is revolutionary but it might take time to implement it correctly
  • An early-stage startup should be clear about 3 things- The solution it is providing, the cost involved and how will the idea be monetized

3. Find your Unique Selling Proposition

  • When you start a business, you have to make sure you are different from the competition
  • Realize what is your USP- is it your delivery mechanism, or your social media presence, exclusivity or the product itself
  • Your startup survival guide should spell out your USP that is going to keep you going for many years

4. Work towards getting your Customer Acquisition Cost down

As we all know, the customer acquisition cost is the total cost of acquiring a new customer. It should generally include things like Advertising, Marketing & Sales costs divided by the number of customers acquired

  • Focus on improving the conversion rate through the quality of content, e-mailers, layouts etc.
  • Enhance Customer service to eventually build loyal customers. These loyalists can then become influencers for your brand to get in new customers
  • Utilize social media campaigns fully so that customer retention rate remains high

5. Be Flexible

  • Business is all about being dynamic and embracing change. Hence, being flexible is of utmost importance in the startup survival guide
  • Learn to tweak your plans mid-way. There could be changes in market conditions, or your competition might be doing something different, keep an open eye and change your flow accordingly 

6. Be well prepared for Investor meetings

  • Treat investor meets as an IIT entrance exam; you need to be more than prepared. Be ready for a volley of questions and if you don’t know the answers you will be marked negatively.
  • Build your case well. This preparation and confidence will give out only one message- that you will justify your investors’ money   

7. Don’t hesitate to ask for Help
 

  • You probably might know everything about how to run a business, but you possibly cannot do everything yourself. Reach out to a partner whom you trust to manage different business operations if required
  • One reason for the startup survival rate to be low is that business owners don’t reach out for help at the right time
  • Be open to feedback, suggestions, opinions, it only makes your business stronger and better

8. Plan for Contingency

  • Keep a close eye on your cash flow management and invest within your means
  • If expected results fail to show, your contingency fund can be utilized to change the course of action

It’s not an easy task to build a business from nothing and therefore a startup survival guide is a must for all new entrepreneurs. With hard work and dedication towards your business, the path to success shall not be far-fetched. 

Categories
Finance

Transform Your business Creditors Into Investors

Steps to build and grow a personal brand. | File Image
Steps to build and grow a personal brand. | File Image

How to make your Creditor an Investor in the business?

It is always an unnerving experience when you have to make your business creditors an investor in your company. However, getting an investor on board can help grow your business in many ways- from an increase in inventory to experience in the trade and even talented human resources. But why will someone invest in your company when he can give you that money on loan and earn interest out of that.  Here are some tips on how to transform business creditors into investors:

1. Adaptable Business Plan

  • The business environment is highly dynamic and keeps changing. In this scenario, new opportunities will also arise and with these changes your business will also grow along with a rise in your market share and revenue.
  • But there could be times when there is a slowdown; hence your business plan should be adaptable to the best and worst circumstances.
  • This gives your creditors in business the confidence that the company will be able to survive during harsh times as well and will lure him to invest in it.

2. Financial Performance

  • Financial viability plays a key role for anyone to invest in a business. You need to prove to the investor that the company is financially healthy especially when you are seeking funding from a bank or a venture capitalist.
  • It is the potential high returns that will make them cross the bridge from a business creditor to a business investor.
  • An investor should be guaranteed his money is safe and this can be done by showing proof of the assets and liabilities, revenue streams, acquisition cost etc. 

3. The Role of the Investor

One thing both you and the investor should be clear about is that what is expected from the investor. Is it only money or is there something else lacking in the company. The objective needs to be defined clearly as this can help business creditors turn into investors. 

The objective needs to be defined as to what is the purpose of capital requirement. For e.g.

  • Develop new product line/Business expansion
  • Bring in specialized human resource talent, hence hire additional employees
  • Spend on branding and marketing
  • Or bring in the experience and background of the investor to grow your business

4. Company/Product Uniqueness
 

  • If your business creditors can envision the problem you are trying to solve through your business model or product and how large the market size of that problem is, then surely they will be interested in switching sides.
  • If your business has a competitive advantage and you can also offer something exclusive to the business creditors such as marketing and distribution rights of a region, it will be a bonus incentive for them to join in. 

5. Exit Opportunity
 

  • If you want to transform business creditors into potential investors, they need to see a viable exit opportunity as well in your business.
  • While they are rooting and supporting your business, they are also looking for a return on their investment. Also, be sure of what you want out of the exit as well.

Business creditors can always be potential investors, but you as an entrepreneur need to make sure that there are enough substance and uniqueness in the business for creditors to take the plunge into investment. The idea is that it should be a win-win situation for both you and the creditor. 

Categories
Process & Business Expansion

How to Create a Successful Subscription Business Model

How to Build a Successful Subscription Business model

We all have realized that the Subscription business model is here to stay. A large number of businesses are moving from a product economy to a subscription economy. 

Why does a subscription-based business model work?

There are 4 factors that we can attribute to this:

  1. It gives you the opportunity to move towards a recurring revenue model. The model is devised in a such a way that the customer will have to pay monthly, quarterly or yearly for your product and service and if you keep providing him quality, chances are higher that there will be a repeat subscription
  2. It allows you to constantly engage and connect with the consumer. Business-customer relationship should not be limited to just a single point purchase
  3. New revenue streams can be created from the current customers by adding more services to your product
  4. A subscription business model can make you take the plunge into digital which can help you save a lot of cost and can help you scale faster

Now if you have chosen to walk the subscription path, you still need to work hard on your product, on your pricing and your service to make sure it is a success. Here are a few tips to succeed using a subscription model

1. Align your Pricing with the Business Goal

  • Pricing is the most important strategy in a subscription business model to make sure your business is a success. It can help you in a lot of ways to acquire new customers, create more revenue streams from existing customers and also make sure the retention rate is high.
  • Structure your pricing tiers on the basis of monthly, quarterly or a yearly based subscription model
  • Also take into account other factors like usage levels, loyalty, new schemes
  • You can start with some basic pricing tiers & adjust it over time keeping in mind customer feedback

2. Bring in Uniqueness

  • Provide the customer with new products and services that add value to them
  • In a subscription-based business model, customer sometimes might not know about the differentiating services provided by you. Spell it out through constant alerts to prospective clients
  • Your product needs to constantly connect with the consumer for it to work

3. Give the Consumer Convenience

  • Today most companies that provide anytime, anywhere convenience to the customers are the ones making money
  • For e.g. All OTT platforms like Netflix, Amazon Prime, and Hotstar give the consumer an option to watch shows/movies anytime and anywhere. Netflix has also devised a pricing strategy for content watching for mobile-only users. This is cheaper than its usual monthly package.
  • Provide the consumer with variety at the click of a button

4. Streamline Cash flow & Billing
 

  • In a subscription based model most of the cash being received by you is upfront, the maximum credit cycle is also 30-45 days. Hence, make sure you are rotating your cash efficiently
  • Bring in automation and software to ease our the billing process and optimize cash collection

5. Build Customer Relationships

  • Customer Relations form the basis of every business and similar is the case in a subscription business model
  • If the customer is not happy with your product or service he will cancel the subscription for the next time. Hence, innovation and building strong relationships is key
  • Get to know your customer well and then design products for him. This will also help in deciding the pricing strategy

6. Give your Customer a Choice

  • In a subscription business model, the one size fits all strategy might not work well for everyone. Hence, give the customer a choice to choose a specific service or a specific pricing tier according to their likes and needs
  • This will help you attain more customers as paying according to choice will appeal to your target audience

Every entrepreneur wants a regular income in his business for positive cash flow and business growth. Subscription based business models provide the perfect platform to enable that ambition, but the cheery on the cake will always lie in your product quality and customer satisfaction.

Categories
Process & Business Expansion

Learn How to Start Your Company From Scratch

स्टार्टअप
स्टार्टअप

Start a Company with Ease!

Every business has to start from the very beginning, and it’s the passion behind it that drives you to start something and be your own boss. Starting a company from scratch need not be complicated, but requires a lot of planning and backend work. Here are a few tips on how to start a company from ground zero.

1. Research & Refine your Idea

If you are thinking about how to start a company and set a business, you must be having an idea. Thorough background research of the idea is critical

Analyze what market leaders are doing in that space and learn from their mistakes 

Talk to a lot of customers, understand their pain point and try to solve that problem

Conduct surveys, hold focus group meetings and research SEOs

2. Prepare a Business Plan

After researching your business idea, the next phase is preparing a business plan that reflects steady & realistic growth

Don’t rush into things before understanding the key aspects of a business. For e.g. 

  • What is the objective of your business?
  • Your defined customer base
  • Price points
  • Sales projections
  • Operational costs
  • Market Strategy

All this has to be a part of a well-defined business plan

3. Choose your Business Structure

This is very important before you decide to start a company. There are a few structures that SMEs can choose from:

  • Sole Proprietorship where you are the ultimate boss and the cost of setting up is the least
  • Partnership- Where you can start the company with a friend, family member or a business partner and decide your profit and loss sharing ratio
  • Limited Liability Company (LLC)- This is a popular choice for small to medium sized businesses. The cost of set up is not very high and there is a separation between the owners and the company

Once you choose a structure, register the company and follow all mandates to make it official

4. Make a financial breakdown chart

If you are starting a new company, you need to address finances and see how the funding will take place 

One of the ways to do this is to prepare a break-even analysis. This is essential for financial planning to know when your business will be profitable 

The simplest way to do this is to calculate your fixed costs and your variable costs and get the difference between the two

Set a financial goal, this will help in keeping a check of whether you are stretching your budget or there is room for margin

Keep a list of the funding options available to you and at what stage you would like to use them

5. Build a Founding Team

Human resources are important to every business and an entrepreneur should be clear that he cannot manage all the functions

Get together a team by assessing their strengths and weaknesses, so that everyone is an asset to the company

Delegate work effectively

Incentivize the team so that when the company grows, they also benefit from it

6. Improve on the Go

Once you have clarity on all your initial steps, there is never a better time for starting up. Improvisations can be made as you go along. 

Most successful companies have launched with imperfections but that did not deter them from adapting to the changes

Learn from the journey and enjoy every bit of it!

7. Decide a launch Strategy

Once you start a company and your product is ready to hit the market, be clear about how you want it to launch

Think about media spends and the mediums you want to use, how do you want to market the product initially and grow it phase by phase

Start branding yourself using social media. Build a following on Facebook and Instagram to create the initial buzz  

Build a logo, create a website and let people identify with your brand

8. Feedback is Essential

Once the company has started and you have launched your product, let people use it and give feedback. A perspective from the consumer will help you see the product in a different light

Customer feedback will help in improving your business 

There is no perfect route to start a company and grow your business, but a killer instinct and the ability to adapt will help you achieve success. Have a quick problem-solving approach as you will

be constantly competing against time. Don’t rush into things and you will be on your way to building a company that you always dreamt of.

Categories
Startup

How to Make Your Startup Into a Large Business

दिल्ली में युवा उद्यमियों को बड़ा मौका
दिल्ली में युवा उद्यमियों को बड़ा मौका

3 Secrets that you must know to Boost your Business

While on your journey from becoming a startup to a large company, strategic decisions need to be taken to scale successfully. You have to invest your time and effort to reap the benefits. It is a necessity for the survival of your business & your economic well-being. Here are some key investments that need to be made while growing your business.

1. Invest in People

  • Employees are the backbone of your business, hence prioritize your team!
  • While it might be difficult for entrepreneurs to hand over control of some aspects of their business, doing so is necessary when growth is the goal
  • By Investing in people you are opening doors to great business opportunities. It helps you build a solid reputation in the market as you will attract the best talent from the industry
  • Provide learning and growth opportunities to your employees so that they feel empowered to take on new roles and responsibilities
  • Always remember happy employees will lead to happy customers. A motivated employee will work hard to build relations with the customer
  • Listen to your employees. Giving orders or lectures on what the company wants to achieve or where it is heading will not work anymore. The employees have a lot of insight about the company and its business function hence their ideas need to be heard.
  • For e.g. Virgin in the U.S had asked their employees to give suggestions on how to improve their cruise ship Virgin Voyager. One of the customer associates came back with a feedback of onboarding a celebrity chef to design a special menu for them. The employee knew that the chef was already a frequent traveller by the Voyager and would be happy to do this. This helped in making the Voyager menu a hit with its customers
  • Reward and give recognition to your employees regularly. Any achievment should be applauded not only by the reporting manager but the CEO as well. This makes the employee feel wanted and motivates him to work better

Investing in People is absolutely integral when it comes to growth of your business 

2. Invest in Processes

  • In order to scale from a startup to a large company, operate more efficiently and achieve insightful data about consumer behavior, a business must invest in process management
  • Move towards Business Process Automation for better employee and customer experience and most importantly streamlining business functions. In fact, if you don’t automate, the cost of that would be incredibly high!
  • Companies without good business process management and automation are likely to underperform and run into issues that could have been avoided
  • Process management leads to accuracy and better communication within the organization
  • While larger enterprises are aware of the importance of business data, small to medium sized businesses tend to oversee this significant aspect that impacts business performance. Investing in Business Process Management will help in centrally storing all business critical data
  • Companies can make that plunge from a startup to a large business if Business Process Management and Automation are treated as two of its important pillars

3. Invest in Technology

  • Technology today plays a direct role in affecting your topline, what you need to know is what tech is best for your business, how the implementation cycle will take place and finally the execution
  • When we say ’Invest’ in technology, don’t treat it like a pure cost to the company. It will yield returns and hence treat it as an investment for growth
  • Embrace and learn social media to increase your sales. Social media can help you interact with audiences around your product offerings and therefore help in increasing traffic to your website or YouTube channel 
  • Choose the right platform and community you want to interact with and then create a strategy around it to engage with them through useful and interesting content. This will force them to visit your page, again and again, leading to growth.
  • Use technology to streamline your business. Investment into software for Financial computation, Inventory management, CRM Management will help in making business processes easier and the customer interface seamless
  • Take a decision if you want to invest in technologies like the mobile app or take your business on cloud depending completely on your product and business model

Every business owner wants his company and idea to grow and become a powerhouse of income generation and following this three-pronged approach you can grow your startup into a large business. 

Invest in People

Invest in Processes

Invest in Technology

And let your business skyrocket!

Categories
HR & People Management

How to Evaluate your Business Performance

Evaluate your Business Report Card!
 

No business can survive without evaluating its business performance. Just like in school, how we review our subject preparation and how have we scored, businesses are no different. Once you have identified your market position and your hold, evaluating business performance will help you decide how to cross the next level. 

Reviewing your progress is useful in many ways: 

  • Helps you remove the uncertainty about how the business is performing
  • How to make the most of the market opportunities
  • Any revision needed in business plans
  • How to get the next set of customers 

Here are some criteria’s that can help you evaluate your business performance:

1. Look at your Financial Statements

  • There is no better way to evaluate business performance than to have a close glance at your income statement, balance sheet and cash flow.
  • You need to check the money flow of the business, this will give you an idea where you are losing money and which are the areas of improvement

2. Review your key business drivers- Sales & Profits

  • Evaluate is your sales target as per plan, which areas are giving you better sales and which are weak in numbers
  • This will help in finding loopholes where sales are dropping
  • Similarly, profitability is what keeps your business thriving. Steady profits with very low dips is a sign of steady growth.

3. Customer Satisfaction

One important principle to measure the success of small businesses is customer satisfaction. If the customer is not happy with your product or service chances are he is not going to come back again

There are a few ways of evaluating business performance on the basis of customer satisfaction:

  • Ask for feedback; analyze the ratio of positive to negative feedback
  • Take constant reviews, this helps in knowing what the consumer thinks of the product and can help you make changes for the better
  • Assess your customer acquisition cost, if you are getting more customers this should be on the decline
  • Keep a track of repeat orders, this shows that the customer is happy and is returning for your product or service multiple times

4. Be Updated about the Market & Competitors

  • Keep a close look on the market and keep evaluating your business performance with how the market is doing
  • If your growth has slowed down and so has of your competitors, chances are the market might be going through a slowdown
  • Everyone feels motivated when the tide is high, but if you find profits decreasing, don’t lose heart. It may be an indication to make some changes to your product, bring in some innovation and cut down unnecessary costs
  • It is useful to do a SWOT (strengths, weaknesses, opportunities and threats) analysis to find out more about what your competitors are doing currently and what the market is saying about them

5. Conduct Performance Reviews

  • Employees are your essentials- without them, the business can turn upside down. It is therefore essential to conduct quarterly performance reviews to evaluate business performance
  • A performance review helps you gauge whether the employee can handle additional responsibilities or is he unhappy about too much work being delegated
  • These reviews also help in maintaining a healthy competitive spirit in the company with everyone trying to give their best

6. Employee Training

  • Keep your employees updated about what is happening in the market
  • Organize skilling workshops and training sessions for them, so that the employees are satisfied with their skill development
  • Employee satisfaction and training can go a long way in enhancing business performance

Use this review to redefine your business goals and find answers to important questions like-

Where the business is going?

What is lined up in the next phase of growth?

A strategic analysis to evaluate business performance needs to be done on a constant basis if you want to be relevant, successful, and take your company to greater heights.