Category: Strategy

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Strategy

A-Z Guide to Understand Your Business Balance Sheet

A-Z Guide to Understand Your Business Balance Sheet
A-Z Guide to Understand Your Business Balance Sheet

Understanding the Balance Sheet to maintain Financial Stability

Is your business in a position to expand?

Can your business handle financial setbacks? Or should your business take immediate steps to increase cash reserves?

As a business owner, you probably are aware & keeping track of what your business earns and owes to others.

However, if you don’t organize these key pieces of financial data in your business balance sheet, you may be setting your business up for failure.

Fortunately, it’s not too difficult to understand the balance sheet, if you’re willing to learn a few key concepts. So let’s dive in!

What is a Balance Sheet?

Balance Sheet = Financial Position of Your Business

Balance sheet is a financial statement of a company which includes the assets, liabilities and equity capital of the company, at a particular point of time.

Balance sheet communicates the “book value” of a business.

Book Value of your business = Assets – (Liabilities + Owner’s Equity)

Business balance sheet provides you with a summary of your company finance at a given point of time i.e. how a business is currently performing, how it performed in the past, and how it expects to perform in the immediate future.

Understanding the Balance Sheet: How to read a Balance Sheet?

Business balance sheet includes 3 sections:

  • Assets
  • Liabilities
  • Owner’s Equity

Assets:

Asset means any tangible or intangible resource owned by a company like machinery, furniture, land, etc.

Assets include:

  • Short-term Assets = that you expect to sell or convert into cash, within 1 year.

– Cash

– Marketable securities – traded investments easily convertible to cash

– Trade accounts receivable (Debtors + Bills receivable)

– Prepaid insurance

– Inventory

  • Long-term Assets = assets that will not get converted into cash in 1 year, and provide long-term value to your business.

– Fixed Assets: machinery, equipment, furniture, buildings, land, etc.

– Investments: similar to fixed assets; long-term investments, not to be sold within 1 year

– Intangible assets: franchise rights, patents, copyrights, trademarks, goodwill, etc.

Liabilities:

Liabilities means the money that your business owes to others, which could be in the form of loans, wages, taxes, or debts.

  • Short-term liabilities = current liabilities, to be paid within 1 year.

– Trade accounts payable (Creditors + bills payable)

– Accrued expenses

– Taxes payable

– Short-term debts

– Current portion of long-term debts

  • Long-term liabilities = liabilities not to be paid within 1 year.

– Long-term loans

– Capital leases

– Other long-term debts

Owner’s Equity:

The final section of the business balance sheet is owner’s equity (or shareholder’s equity).

Owner’s equity = Total Assets – Total Liabilities

In other words, owner’s equity is what you own after you subtract (reduce) what you owe from your total assets.

  • Capital invested by the owner
  • Retained earnings

5 Simple Steps to Prepare a Balance Sheet:

Step 1: Gather the required information from your books of accounts

Gather all the information (discussed above) needed to prepare your business balance sheet. Any source with updated account balances can be used, however, the most appropriate tool for collecting information is your business’ Trial Balance.

Step 2: Report all Assets

 

  • Report all the assets in the right side of the business balance sheet. Report all short-term assets separately from long-term assets.
  • Short-term & long-term assets should be subtotalled, then totalled together.

Step 3: Report all liabilities

  • After reporting all the assets in the business balance sheet, next step is recording liabilities of your business. Start by recording short-term liabilities, followed by non-current liabilities.
  • Short-term & long-term liabilities should be subtotalled, then totalled together.

Step 4: Calculate Owner’s Equity

Owner’s Equity = Assets – Liabilities

Compare the assets and liabilities of your business to calculate the owner’s equity.

Step 5: Add Total Liabilities to Total Owner’s Equity and Compare to Assets

It is necessary to compare total assets against total liabilities plus equity, in order to ensure you’re your balance sheet is balanced.

Here’s an example of a finished Balance Sheet: Balance Sheet Format

Balance sheet in the books of _________ year ending 2020

Liabilities Amount (Rs) Assets Amount (Rs)
Capital XX Fixed assets XX
Loan Taken XX Current assets XX
Current liabilities XX Cash/Bank XX
Outstanding expenses XX Accounts receivable XX
Bank overdraft XX Bills receivable XX
Accounts payable XX Inventories (Stock) XX
XYZ XYZ

Balance sheet is one of the most critical and important financial statement of your business, offering a quick summary of the financial health of your business.

Learning how to prepare a balance sheet for business can help you understand the financial implications of business decisions leading to better decision-making and running of your business.

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Strategy

Strategies to Make Your Product Stand Out

Make Your Product Stand Out in 3 Simple Steps

Do you think your company has a unique product & offers?

Here’s the truth; you probably don’t, and there is nothing wrong about it.

Some of the world’s most successful products are not totally new, original or unique. Take the classic example of Google. Google’s founders ’ Larry & Sergey didn’t invent the search engine, yet the one they found out is generating crores of rupees in profits.

This is because they differentiated their product from the sea of other search engines over the years.

So, if you want to truly differentiate and make your product stand out from the crowd, here are 3 proven tips to help:

1. Target Audience: Define your perfect audience

’If you try to appeal to everyone, you will end up appealing to no-one’

Defining and choosing a specific target audience helps you make your product stand out from the rest, as long as you don’t choose the same target audience as your competitors.

For example:

  • McDonald’s target audience includes students, employees and professionals within the age group of 8 to 45 years, belonging to low & middle-income groups and having an easy-going personality.
  • Facebook: The target audience of Facebook has evolved with the company. In the initial years of its operations, Facebook targeted college students of the United States. 

But now Facebook has widened its target market focusing on millennials (25-34 years) and mobile using adults in 157 countries.

Choosing a specific audience for your brand is a start, marketing is the next step.

Marketing that doesn’t hit its intended target audience is classified as a waste, and marketing that does hit its target audience is classified as effective & efficient. The key here is to give your target audience something that interests them.

  

  

2. PSP Formula: Problem Solving Product (Value Proposition)

’You don’t grow when you try to make money, you grow when you try to offer the right value to your customers’

– Dr. Vivek Bindra (Founder & CEO, BadaBusiness.com)

Your value proposition tells your customers at a glance, what you do, and how you’re different & perhaps better from your competitors. 

It might not be the actual features that make your product standout from the crowd, but the way you deliver your service or a disruption brought about by you in a traditional function (think Ola Cabs or OYO rooms, for example)

Examples of Strong Value Proposition include:

Twitter: ’See what’s happening in the world right now’

Khan Academy: ’You can learn anything’

WeWork: ’Space to elevate your work’

These are all recognizable statements from companies that stand out from their competitors in their respective industries for their branding and positioning. 

Having clarity on what your value proposition is and what makes your business unique will help your customers understand what’s unique about your brand too and make your product stand out.

3. Customer Service: Providing consistent & quality customer service

Your product is only one half of the equation in making your brand stand out. Strong customer support & service is the other half.  A perfect balance between the two decided whether the consumer will make the initial purchase from you and whether they’ll continue to buy from you in the future.

  • Statistics shows that 45% of customers will immediately exclude products that come with additional shipping fees during an initial product search.
  • Similarly, other areas that matter includes warranty coverage, fast shipping, and hassle-free exchange & returns.

As a brand, your goal should be to provide consistent & high-quality experience to your customers, right from the moment a customer places their order till it reaches them at home.

Making your product stand out from the competition is getting more challenging nowadays. But it’s also becoming a necessity. Starting with these 3 fundamentals will help you breakthrough.

As the marketplace gets crowded, business owners need to leverage all the moving parts of their business in order to survive. Focusing on your target audience, the value proposition of your product and excellent customer service will help you make your product stand out among an increasing sea of sameness.

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Strategy

How to Evaluate Your Small Business Marketing Plan

Ingredients to Evaluate Your Marketing Strategy

How do you know if your marketing plan is working out or not? 

How to improve your marketing campaigns?

The success of a small business marketing plan depends upon 3 key factors:

  • Developing a strong plan
  • Executing it effectively
  • Evaluating the plan to measure its effectiveness

Evaluating your small business marketing plan is very essential for an entrepreneur, as it helps the business owner to know which campaigns and strategies are working well, and where to focus his time, money and energy to get the best results.

Here are 6 smart ways to evaluate your small business marketing plan:

1. Brand Recognition & Establishment

Grabbing people’s attention, getting people to know your business & brand, and building a relationship with your customers should be the first objective of your marketing plan.

This can be measured by finding out:

  • The size of your fan base on your social media handles
  • Mentions of your brand name on social media sites
  • The number of positive reviews left by customers about your company on social media as well websites like Google Reviews
  • Inbound website visitors from social media handles
  • Total number of conversions resulting from traffic generated through social handles or any other form of advertising

By analysing these factors, you can determine what form of engagement is working to your benefit and how you can drive it further. Increase in traffic on your website and social media handles, retail channels or enquiries on your website/call centre means that your marketing campaign is working out well.

2. Lead Generation

Not all marketing efforts are directed towards generating sales, however, marketing plans must fuel the sales funnel of the business by generating leads.

How to evaluate your small business marketing plan in terms of lead generation:

  • Increase in subscribers to your mailing list
  • Increase in appointments
  • Increase in customer response for your products or services

You should set quantified goals to track & measure your leads generated over the period of a week, a month and a year. 

3. Reviewing Sales Numbers

This is simple: Sales should be going up!

Reviewing your sales numbers is fundamentally the fastest way to determine the effectiveness of a marketing campaign.

For example:

If pre-marketing campaign sales of your company was Rs.500,000 and after the marketing campaign, the sales increased to Rs.800,000, it is a safe assumption that the campaign was effective and your sales have grown due to its effective execution 

4. Customer Response

Customer response in any or all its varied forms can help you determine the type of reaction your marketing activities create. 

  • You can create a funnel for surveys that can be posted online or taken in person from the customers. Customer feedback can help you figure out the reaction & impact of the marketing campaign on the consumer
  • Ask Simple Questions such as:

’How did you hear about us? 

How did you find out about our seasonal sale?

Will you try & recommend our product?

Such simple questions can reveal which marketing initiatives are reaching the right customers.

5. Business Expansion

When your marketing plan is working out well, your business begins to grow with more customer calls, fresh leads, sales and expansion

  • Good marketing campaign makes each customer, employee and stakeholder a marketer of your brand.
  • When you start getting customers from new regions and geographies, it simply means that your marketing plan is working well!

6. Return on Investment

Return on Investment (ROI) is one of the top concerns of any business owner, when it comes to running marketing campaigns.

  • The idea of knowing the ROI is simply to find out whether the amount spent or invested in a marketing campaign has resulted in a profit or not.
  • This can be measured by comparing the amount spent on the campaign versus the amount of sales each campaign has brought in specifically.

A business owner must consistently and carefully evaluate its small business marketing plan to spread brand awareness, spend wisely on activities and maintain its growth momentum.

If the objective & outcome of each marketing campaign has been defined clearly, business owners can not only make smarter marketing decisions but convert potential leads into life-long customers much faster. 

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Strategy

How Animated Videos Can Be Used to Enhance Your Brand?

Animated Videos:  A Game-changing Strategy for Small Businesses

Do you want to establish a powerful connection with your audience?

In today’s market, there is no better way to do it than connecting through animated videos. 

Now you might be thinking, that you’re a serious business and there’s no way a cartoon is going to help your brand get audiences’ Just think of Red Bull’s TV commercial for a second ’ It’s all about interesting animated characters spelling out the brand message well. For a vast majority of businesses, creating animated videos is a perfect way to enhance their brand identity. 

Here are 5 ways to do that:

1. Powerful Communication Tool:

Animated videos for business utilises the power of storytelling. A brand can close the gap between itself and its audience with a powerful story they can empathise with.

  • A simple animated video, with a powerful script, and well-design characters, is sure to keep your audience hooked, even if the topic might be a bit complex for them.
  • Animation based videos reduce the time taken by a customer to read the description of a product or service to mere moments.

2. Higher Viewership & More Share:

Since there’s a wide variety of content available online & customers are being bombarded with this content, they will definitely want to pick something simple, informative and quick to consume.

When it comes to consuming simple and quick content, watching animated videos is typically more attractive than reading verbose textual messages.

  • Your conversion rate can increase by 80%, simply by having a video on your landing page. Higher conversion rate means more sales.
  • Chances of more views and shares increase with the use of animated videos, people are encouraged to share your videos, making them an advocate for your brand. 

3. Complex Topics can be easily simplified:
 

Animated videos for business can bring concepts to life in a way that text or even live videos can’t. 

Animation based videos are very effective for explaining complex topics in a step-by-step process in a fun and simple way. 

  • Animation allows unlimited flexibility i.e. you can simplify complex topics and showcase aspects of your product that might not be visible otherwise.
  • You can send a subtle but clear message to customers regarding what your company stands for through an animation style that matches with your brand.

For Example: 

A good example of this is the videos put out by Bada Business for their customers. Bada Business (Dr. Vivek Bindra) has over 12 million subscribers on Youtube, making it the World’s No.1 channel for entrepreneurship and business content in Hindi. 

Difficult topics are simplified for the entrepreneurs and small businessmen of India, using simple, informative and interesting animations.

4. Animations are Engaging & Easy to Remember:

Animations are engaging and fun and can tap into the emotions of audiences more effectively than any other medium. Just imagine a brand trying to explain its working through an animated video vis-’-vis a brochure. What would be more appealing to the customer? The answer is obviously the video format.

  • Numerous studies have shown the benefits of using animated videos in education. It is so because people find the concepts more engaging & easy to remember when shared using both audio & visual tools.
  • Animations can be used to reflect the uniqueness of your brand, as it can be personalised.

For example TV commercial of Red Bull: Just think how easy it is to recognise a Red Bull ad, by immediately identifying the style and characters.

Using animated videos for business can do the same for your brand.

5. Animations are Cost-Effective:

Animated videos are not just fascinating but also come with a low production budget when compared to other video formats.  

When you shoot any other type of video, like a live-action video, there can be an extensive list of associated expenses. 

  • Animated videos take off the burden to cast actors, scout for production, arranging for props and production time, scheduling for shoots & finalise sets and equipment.
  • A small businessman can simply get in touch with a design agency or a freelance animator to get rid of a lot of hassle and only worry about the creative input.
  • You have control and can manage small details until the last minute, which is certainly not possible with live videos.

In the case of live videos, one has to stick with decisions made prior to the shoot, and any changes mean additional cost to the business. However, in the case of animated videos, one can change the storyline or characters, without affecting the project or budget of the videos. 

Animated videos can be a useful tool for building your business & your brand. Animation based videos are cost-effective and at the same time a powerful communication tool for small businesses.

A well-done animation can help consumers remember your brand and compel them to do repeated business with you.

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Strategy

Your Complete Guide to Business Assets

इनकम टैक्स रिटर्न भरने वाली 57% इकाइयों की आय इतनी
इनकम टैक्स रिटर्न भरने वाली 57% इकाइयों की आय इतनी

Understand Deeply the Assets that Affect Your Business

Asset means anything of monetary value owned by an individual or business. 

A business asset is a resource that has an economic value for a company and which can be used in the current or future time period to generate revenues.

Examples of business assets are:

  • Cash and cash equivalents
  • Property, plant and equipment
  • Inventory
  • Investments
  • Furniture and fixtures
  • Patents, copyrights and trademarks

Properties of an Assets:

There are 3 key essential properties of a business asset:

  • Ownership:
    Assets that carry ownership and can be eventually turned into cash and cash equivalents
  • Economic Value:
    Assets that carry economic value & can be exchanged or sold
  • Resource:
    These assets are basically those resources which can be used to generate future economic benefits

Classification of assets:

Business Assets can be classified into 3 categories:

  1. Convertibility:
    Classifying assets based on how quickly they can be converted into cash.
  2. Physical Existence:
    Classifying assets on the basis of their physical existence i.e. tangible or intangible.
  3. Usage:
    Classifying assets on the basis of their business usage or purpose.

1. Convertibility:

Classifying assets based on how quickly they can be converted into cash i.e. short-term assets and long-term assets.

  • Short-term Assets
    = Assets that you expect to sell or convert into cash, within 1 year.

– Cash

– Marketable securities ’ traded investments easily convertible to cash

– Trade accounts receivable (Debtors + Bills receivable)

– Prepaid insurance

– Inventory

  • Long-term Assets = assets that will not get converted into cash in 1 year, and provide long-term value to your business.

– Fixed Assets: machinery, equipment, furniture, buildings, land, etc.

– Investments: similar to fixed assets; long-term investments, not to be sold within 1 year

– Franchise rights, patents, copyrights, trademarks, goodwill, etc.

2. Physical Existence:

On the basis of physical existence, assets can be classified as: tangible and intangible assets.

  • Tangible Assets
    = assets which can be seen, touched i.e. having physical existence

– Land

– Building

– Machinery

– Cash

– Furniture & Fixtures

– Office equipment

  • Intangible Assets
    = assets which can’t be seen i.e. which don’t have physical existence

– Goodwill

– Patents

– Brand

– Copyrights

– Trademarks

– Corporate intellectual property

3. Usage: 

On the basis of their usage, assets can be classified as operating and non-operating assets.

  • Operating Assets
    = assets required in the daily operations of business i.e. assets which are used to generate revenue from company’s core business activities.

– Cash

– Stock

– Building

– Machinery & Equipment

– Patents & Copyrights

– Goodwill

  • Non-operating Assets
    = assets which are not required in daily operations of business but still generate revenue for business.

– Short-term investments

– Marketable securities

– Vacant land

– Interest income from a fixed deposit

Why are these assets so important for any business?

Assets are important for any type of business due to the following reasons:

  • Generating revenue
  • Increasing the value of your business
  • Facilitate the running of your business

You can transfer or sell assets, use them to lower your tax liability and in turn increase the efficiency of your business.

A good understanding of assets in business can help you achieve potential savings in your business.

For example:
In some cases leasing an asset in a business, such as a machinery, can be way more cost-effective than buying one.

Intangible assets such as patents, copyrights and trademarks help in protecting your business against infringement. 

Learning about assets in business is a must for every entrepreneur. The efficient management of assets in a business is absolutely critical, as errors can lead to inefficient decision-making, incorrect tax reporting and inaccurate valuation of your business.

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Strategy

3 Important Tips To Improve Your Logistics Strategy

Improve your Logistics Strategy & gain Customer Loyalty

’The sustainability of your business isn’t just based upon acquiring new customers, but also on your ability to maintain a loyal customer base who buy from you time-to-time’

Every business owner knows that the cost incurred to acquire a new customer is always way more than to keep an existing one 

To create a loyal customer base it’s essential to build a reliable & best logistics strategy. Here are 3 tips to build a consistent logistics framework

1. Preparation is the Key:

Managing your inventory and choosing right logistics partner are the most important steps to create the best logistic strategy for your business.

It seems obvious but if you don’t have the products that you’re selling to your customers in the warehouse, sooner or later you are going to disappoint them. Hence, whether you procure and manage your supply in-house or outsource it, you need to have this element under complete control.

The best way to manage an accurate inventory?

  • Tracking your goods: For small business owners, it is essential to master the art of supply and demand, which is not any easy thing.
  • Regularly reviewing your stock forecasts and committing enough time to calculate safety stocks.

An effective way to create the best logistics strategy is to always connect with all parts of the supply chain- such as suppliers, partners, and companies.

2. Choose Reliable Logistics Partners and Tools

The second step to creating the best logistics strategy is to choose consistent logistics partners & tools. Many startups or smaller businesses prefer to keep logistics as an in-house function because involving a third party agency or a vendor means additional cost for the business.

According to our Bada Business Professor, Mr. Harpreet Singh Malhotra – Managing Director, Tiger Logistics (India) Private Ltd, budding entrepreneurs or business owners should focus on their strengths which is the product and should outsource the logistics service at the initial stage of business.

Outsourcing the logistics service helps in the following ways:

  • Focus can be directed towards the core business and product
  • Taking advantage of the expertise of the logistics partner
  • Bringing economies of scale in the business
  • Cost-effective and timely solutions

How to choose the right logistics partner?

To choose the right logistics partner for your business, you should consider the following points:

  • Product Knowledge:
    Your logistics partner must have the essential knowledge about your product. 

For example: If you’re in the food grain business, then your logistics partner should be the one who has sufficient knowledge about this domain and can make sure that grains are delivered in time without any loss to the product.

  • Reliability of the partner company:
    Your logistics partner needs to be someone, you can completely rely upon. This can be evaluated on the basis of the following:

The capability of the company to handle your products

– Credibility in the market

– Ability to give the benefits of its vendors to you

– Timely delivery of the product

– Reasonable costing of delivery

– Experience in a similar product line or product mix

3. Offer a wide range of options to your customers

Last but not the least, to create the best logistics strategy you need to offer a wide variety of options to your customers.

Flexibility is an absolute must nowadays. Today the customers are me-centric and expect the business to provide the options that fit in with their lifestyle and needs. And when it comes to logistics & order fulfillment, this is very relevant and crucial.

Many customers discontinue and leave their shopping cart when choosing the delivery option. Why?

Because customer haven’t found the delivery option they wanted. Keep in mind, as a business you have to consider and offer both delivery/pickup options and the speed at which these functions take place

  • Many customers want a door to door shipping option while others feel that a pickup delivery option is better and works for them well.
  • To maintain an edge over speed, you can offer regular, express and even same day or next day delivery services.

This helps you to become the preferred brand for your customers and builds a good reputation in the market.

We hope these tips help you create the best logistics strategy that will not only be good for your business but for your customers as well, leading to a long-lasting relationship with them. An efficient logistics strategy creates loyal customers for your business and loyal customers can help your business grow. 

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Strategy

How To Use Discounting Strategy To Make More Sales

Offer Discounts without Losing on your Profits 

Discounts are always a lucrative way to increase sales and tempt the customer. Many of the discount strategies work wonders if they are backed by a strong service and distribution channel. But if a company constantly lowers the price point, there are chances it might eat into the profits.

When small businesses are looking to move up their sales figures, discounting is one of their first approaches. Here are a few tips that can make your discount strategy in retail work without cutting into your profits or damaging your brand image.

1. Define your Goal

  • Keep yourself and the team focused on the discount strategy decided. Blindly introducing discounts will not solve the purpose. Keep weighing the pros and cons and cut your cost to an extent that you will remain profitable.
  • If the purpose is to make new customers, then you can adopt a heavy discount strategy across your retail channels that increases the footfall
  • If you are looking to re-engage with customers who have bought products from you before, then maybe look at some customized offer, or offers on a product that is bought more

2. Get a Competitive Advantage

  • If you are looking to sway customers from your competitors, then go for a discount strategy that will be lesser than your competitor’s pricing, but will keep you profitable
  • In this case, when the customer compares your product with the competitor, even a difference of as low as 300 rupees makes a difference
  • If the customer notices that your pricing is always lower, maybe after a few trials they will start coming straight to your retail outlet and buy rather than even comparing

3. Make Customers feel Positive

  • Sometimes even a small discount or a gift coupon makes customers happy about shopping from you. They leave with a positive feeling about your brand.
  • This will help you in the long run as the customer will associate you as a brand that cares for them

4. Timing should be Right

  • Sending out discounts at just the right time i.e. when customers need them, this will greatly increase your conversion rates. A discount strategy like this works wonders in retail
  • For e.g. if you have lost of customers that come and buy in the first 10 days of the month, then aim your discount strategy around that time

5. Keep a Check on your Margins

  • Compare the sales you need to do at your current margins to achieve your target revenue with how much sales is needed at the discounted margin. The marketing activity can be increased proportionately then
  • A lot of companies also set an ’acceptable range of margin’, unless your objective is aggressive customer acquisition keep you discount strategy in retail within the acceptable range of margin

6. Promote Sale of New Products as well Impulse Buying

  • Since you have put items on heavy discounts, people who visit the store will indulge in impulse buying as well. This discount strategy in retail will help in selling other products as well
  • Give your customers product recommendations and suggest upgrades that can help push your sales indirectly
  • Arrange your products in a way that, the new products are placed in the front of the store while the discounted one behind them. The customer will be left with no choice but to go through the new launches and make note of them. There are chances that he might pick up an item here or there for trial

7. Give Discounts with Conditions

Don’t offer blanket discounts, make sure you have some pre-requisite conditions that the customer must meet before being eligible for the discount. 

Try different method of discounts such as:

  • Buying a certain number of quantity
  • Spending a certain number of amount
  • Special discounts for Loyalty Program customers
  • Buy 2 and get 1 free
  • Bundled Discounts (Cub 2 or 3 items in similar categories together, For e.g. A face wash and a cream)

These conditions don’t let discounts eat into your profits and maintain healthy sales

8. Offer Heavy Discounts to get rid of Old Products

  • This strategy works for products or businesses that are usually seasonal. For e.g. if you run a clothing boutique, you can get rid of your summer collection by offering heavy discounts and you need to display clothes for the next season
  • It can also be used for electronic items like mobile phones especially when a new product of the same series is being launched. To get rid of a lot of the existing model inventory, heavy discounting can be used.
  • This discount strategy helps in at least getting rid of the stock even at the base price instead of dumping them away

Discount Strategy in retail can be a great tool to get in new customers, also engage with your old customers and dispose of old inventory, what really needs to be worked out is the strategy.  Calculate how much discount can you afford to give otherwise there is no option left but to give it away from your profits.

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Strategy

What Will Change For Your Business Post Corona Virus Lockdown?

Business post-Corona: Changes that every company needs to follow
 

We all know that the world will change post the Corona outbreak. There will be change in business and all of us will have to adapt to a new way of living, working, and building relationships. Here are 10 things that will change for businesses when life returns to normal:

1. Business Model Reinvention

  • Entrepreneurs will reinvent their business model and other functions to adapt to the changes the pandemic has left behind
  • The first step to business reinvention is deconstruction- a new framework will be drawn for key elements of the business. For e.g. Customer relationship, resource management, key partners, revenue, cost, etc., all functions will need to be looked closely and tweaked accordingly

2. Leaner Business Models

  • All tasks & functions that have no value to the customer will be eliminated and a continuous process of testing your assumptions about sales and revenue will be put in place
  • A leaner business model can lead to greater productivity and smooth functioning. Since the wasteful tasks will be eliminated, the focus would now be on the important and revenue-generating functions and hence would lead to smooth running of the business
  • Faster delivery options can be explored leading to increased customer satisfaction

3. Business Automation

  • Technology & Business Automation will be the backbone of every function that we conduct in a business
  • ERP tools will be used more than ever to automate tasks leading to a lesser human face to face interaction and updates
  • Meetings, personal interactions, and even Events and Conferences will be facilitated with remote work tools without any loss in productivity of employees

4. Artificial Intelligence (AI) and Automation

  • AI & Automation will happen faster than ever imagined. With the help of AI, Business Automation, customer engagement and data analysis will form the basis of many business decisions
  • Role of Machine Learning to process data- For e.g. you have a manufacturing unit and your machines are connected to the network. Constant data about production will be fed to a central location. It is not possible for a human to process so much data, hence AI & ML will help companies collect this data and also extract important information out of it
  • Predicting customer insight will become more accurate. Patterns of what a customer will buy, identifying quality and safety measure and personalized targeting of digital ads will be done using AI more often

5. Risk Insurance
 

  • Post Coronavirus outbreak, businesses will have to take several insurance to safeguard against unknown risks
  • Currently, there are 2 major insurance covers-’Event Cancellation insurance’ offered by usually big firms and the other is a more general cover for ’Business Interruption’
  • Businesses will move from ’standard policies’ to more specific ones that cover unknown risks extensively
  • Employee health insurance given by companies will have costs related to epidemic illness and death covered as well

6. Expansion into New Markets

  • The possibility of more profits, more reach, and more impact is enough to get anyone excited and decisions related to expansion into new markets will be taken faster.
  • Prioritize and select your markets and assess internal capabilities in terms of which core competencies can be leveraged.
  • Going digital will help enter newer markets faster 

7. Cost Reduction

  • Companies will be heading towards cost-cutting & cost reduction measures for various functions that can either be automated or outsourced as and when required
  • Hiring across organizations will be lean with more of scope of work being defined across lesser employees
  • Companies will become less hierarchical leading to cost reduction with lesser people on top
  • Businesses will approach more inbound techniques of marketing like social media, blogs, CRM rather than costly marketing practices. This will help them target relevant customers at half the cost.

8. Hiring Freeze

  • Due to the Coronavirus outbreak, many businesses suffered with absolutely no revenues but they were still paying salaries to their employees
  • Post Corona, we will see most companies going into a hiring freeze with current employees carrying out inter-departmental functions
  • For e.g. a marketing professional in a company can also handle its branding strategy, external & internal communication rather than just focusing on building marketing plans

9. Invest in Employees

  • An employee is the most important asset for an organization and without good employees, the business will be alive on a ventilator sort of situation, so invest in employees
  • Put forward a peer-led rather than leader- or boss-driven model with increased communication and engagement within the group of workers
  • Revisit your sick leave policy
  • Implement flexible working arrangements which can be mapped
  • Mental wellness will become a priority for companies for their employees to function well
  • Provide certain facilities/benefits to employees that make them feel wanted and cared for.
  • Rewards & Recognition for good performers, a celebration of milestones and enhanced learning opportunities for employees that have potential

10. Focus on Innovation

  • When a business tries to bounce back, your business idea and model form the foundation of getting back into the groove
  • Companies have to innovate at a faster pace otherwise they should be ready to perish
  • Every business post-Corona will try to bounce back and get revenues in place. It will become a do or die situation for many
  • Put in place lifeboat plans for three-month, one-year and three-year downturns
  • Faster innovation will help you become more competitive and build the value of your brand
  • Focus on innovation will help companies scale up their structure and eventually lead to increase revenues 

Change is inevitable and a global pandemic like Corona is setting the ground for change in business as well. Act with compassion and take each and every action NOW, as you don’t want to miss the bus.

Categories
Strategy

How To Select The Ideal Business Entity

Choose the right Business Entity for your Company

Starting is a business is not easy. Apart from the many decisions that you need to make, one important decision is to select a business entity for your company. An entrepreneur needs to be very clear about choosing a business entity as this decision will affect your taxes you pay, your growth plans and even your ability to raise money. 

While choosing a legal or business entity, you should be very clear about-

  • The kind of work you are going to do
  • Under what government or taxation norms does it fall into?
  • How can I seamlessly fulfill my future business requirements
  • Only after selecting a business entity, you can register your business with the state

Here are the major types of business entities you can select from:

1. Sole Proprietorship

  • One of the most easily formed entities is sole proprietorship as both, the managerial control & financial liabilities remain with the owner
  • If you want to be your own boss and don’t want to enter the hassle of having multiple partners or too many obligations, then this is the best decision for you
  • It’s simple and cheap, you can think of the business structure. The only fee you need to pay is license fee and taxes
  • Under a sole proprietorship, you are entitled to some tax deductions as well

2. Partnership

  • This business entity is run by two or more people together who have a share in profits as well as loses too
  • This kind of an arrangement is ideal if you want to start a business with a family member, friend or a business partner where all share the profits and losses and are involved in making important decisions regarding the business

There are 2 types of partnerships- General and Limited partnership

  1. General Partnership- In this arrangement, all profits and losses are shared equally
  2. Limited partnership- Limited partnerships have one partner with unlimited liability, and all other partners have limited liability

The benefits of a business entity like the partnership is that it can be formed without any hassle and does not cost a lot 

  • You work as a team. Partners are in the business not only to share the profits but also to share the challenges that come along during setting up a business. Ideas can be shared and learning from each other is natural.
  • However one should only enter a partnership when you can work in tandem with another person and accept that the profits are not solely your profits!

3. Limited Liability Companies (LLC)

  • This is a mixed structure business entity that allows the partners or shareholders to limit their personal liabilities but still enjoy the tax benefits of a partnership. The members of an LLC can be individuals, a partnership or a corporation
  • The major benefit of an LLC that in most cases the partners are protected from personal liability the same way as shareholders are in a corporation.
  • You do not need to file corporate tax as an LLC, but you need to file your profits and losses and submit it with your tax return under schedule C

4. Corporations

  • Corporations are business entities separate from their owner. It handles the responsibility of an organization and running a business
  • The corporation is taxed and is also fully liable for its actions
  • The benefit of forming a corporation is that it is separate from your personal liability and the disadvantage is that it is a bit costly to form this legal entity
  • There are several types of corporations, such as C corporations, S corporations, B corporations, closed corporations, and nonprofit corporations. However, the S-corporation was formed for small businesses to avoid double taxation
  • When your business is a corporation, the chances of you raising more capital from investors increase because funds can be raised through selling stocks which can be a luring option

While choosing a business entity you need to compare the pros and cons and how it will benefit you. The tax implications, ownership rules, and future needs should be in your favour. It is absolutely important to take advice from a business consultant/expert or your chartered accountant before finally arriving on your decision. 

Categories
Strategy

Learn the Best Ways to Communicate with Stakeholders in your Business

Learn the Best Ways to Communicate with Stakeholders in your Business
Learn the Best Ways to Communicate with Stakeholders in your Business

Communicate & Connect: One-Stop Solution to Build Brand Perception

When the entire business community is going through a tough time, communication is the only saviour for your stakeholders. Communication will motivate all your patrons in the business to keep going and stay connected with you.

1. Communicate with Employees

  • The biggest and most important stakeholder in an organization is the Employee. Communication with employees is a must, not only during hard times but on a regular basis as well.
  • Welfare of the employees and how to survive through the crisis together should be your first priority.
  • Set up a COVID-19 or a crisis cross-functional team that can look at employee distress.
  • Look at HR plans for emergency employee support and action remote working policies if need be
  • Leaders should communicate personally to their teams on goal setting
  • Send Voice notes on key decisions and actions taken
  • Invite teammates to meetings that demonstrate the impact of their work
  • Create an Internal Communications team- Put a process in place for reaching employees through e-mails, Social media posts, leader connect or internal chat groups
  • Demystify the fear and outline the steps the organization is taking on behalf of its employees to protect them

2. Communicate with Customers

  • Customers need to be communicated in a different way that employees. They need to be provided with relief rather than constant business information
  • Send out a note from the Founder/CEO of the company to all the customers assuring them that all measures are being taken to continue to serve them
  • Communicate with them through e-mailers, get their feedback and try and apply as much of it. Also let them know that their feedback has been implemented
  • Engage with the customer on social media through relevant content. Today a brand is a community, devise content that requires their involvement, could be in the form of a quiz or a Q&A session
  • You can also create a small one minute video for them, talking about the measures taken by your business to comfort them during tough times
  • Blogging and micro blogging is a new-age tool that can help in brand recall for the customer. Put content on your blogs that can go viral and is evergreen, hence it will help in making a chain of communication with not only your present customer but with potential ones as well
  • Make sure similar communication is given to all customers, treat everyone as equal

3. Communicate with Banks

  • Though during tough economic situations, banks themselves take a lot of measures such as extending loan & interest payment durations & reducing interest rates to help businesses out
  • As a business your communication to the bank should be transparent and timely
  • If there is a crisis, sit and understand with the bank officials what is the best bail out option that they can offer

 

4. Communicate with Partners

  • Partners are the lifeline of the business. You need them at every stage of growth
  • During hard times communicate with partners on a regular basis
  • Conduct a video conferencing with the Founder/CEO or a meeting in person, so that they are convinced that you are on their side
  • Build relationships outside work meetings; this will help in creating a rapport between the partners and you
  • Prepare Smart Presentations which means don’t make your presentations a sales pitch, use story-telling to connect with partners and consumers

5. Communicate with other Stakeholders

  • Apart from the ones mentioned above in the article, the other stakeholders can be your legal advisors, brand partners and investors in the business
  • Educate your stakeholders on a regular basis- Let them know about the developments at the workplace and how their role is important
  • Create transparency- Don’t assume all communication channels are perfect across the organization. Make all product updates and roadmaps available to them to avoid any friction
  • Learn to write a press release and communicate with the media. They can be an important stakeholder in building your brand

Communication is vital to build your business and regular communication can help it build manifold. Bada Business through its SPICE Problem Solving Course is trying to solve this burning problem of ‘How to communicate with all members and partners involved in the business;’ not only during crisis but also on a daily basis. Your communication creates the perception of your brand and that perception should be about- Trust, Transparency, Quality and Care.

Through the course you will also learn important skills such as:

How to make sales proposals?

How to make sales pitches?

How to use LinkedIn.com?

For more details and content related queries you can subscribe to our SPICE course available on the Bada Business website and the App.