Business Icons’ Advise:
Never start with diffidence, always start with confidence.— JRD TATA
All people want to be their own boss and start their own enterprise, but few actually do. Entrepreneurship is an attitude. Check out, if you have it. Here are some of the qualities that are essential for success as an entrepreneur.
Capacity to cope with uncertainty.
Success of a start-up is full of uncertainty. It requires lot of hard work and dedication. You should be prepared to handle situations that may crop up without warning. You should not expect fixed schedule life any more. You will have to work at odd hours when required. Meticulous planning can definitely reduce ambiguity and uncertainty. Planning for resources and connect with the people who will support and advise in difficult times helps a lot.
When you start an enterprise, it’s only you who has full responsibility and accountability for everything. Customer/clients want what they want and when they want. They won’t listen to excuses. Even when it’s their fault, they want the solution. To do that, you need discipline. If you are used to an easy going life style you should be prepared for a marked make over or forget entrepreneurship.
Be fit as a fiddle.
The first two qualities require that you should be in the best of health. There are no sick leaves for an entrepreneur and there is a possibility there won’t be for years to come. You will have to deliver even when you are not feeling good. You cannot afford to miss business opportunities. You need to keep yourself healthy with diet as well as exercise. Yoga and meditation help in physical and mental health.
Love your work.
Be sure, you are passionate about what you intend to pursue and are equipped with the skill set to start work. This is important because you will have to put in long hours of hard work and handle intense situations, which is will not be possible unless you love and enjoy what you are doing. Money alone will not bring in the required motivation.
Inter-personal relationship skills.
When you get in to managing your enterprise, the most important is your capability to manage people, be it your employees, your customers, your vendors, your financiers or the govt. Agencies. Relationships are based on trust and give-and-take. Build enduring relationships, you will need them for support and advice in difficult times.
Things may come to those who wait,
but only the things left by those who hustle
We may know a lot of things but its of no use until we take action and do things. “The universe rewards action.” We all understand this axiom but still we are bogged down in analysing, planning and organizing while what we really need to do is, take action. One thing that primarily separates winners from losers is that winners take action. Successful people are action oriented. Once they have developed a plan, they start. Once you take action, people know you are serious and those with similar goals become aligned with you. When you take action you learn from your own experience and know how to do it better, more efficiently, and more quickly. Things start becoming clear and easier.
People usually delay action for fear of failure and looking foolish in the eyes of others. There are patterns of behaviour which indicate how a person will act/react. How you do anything, is how you do everything. If you are cautious here, you will be cautious everywhere. It becomes your habit/attitude and holds you back from action. If you want to be a winner, you must break such patterns.
Planning is important, but it must be kept in perspective. There will never be a perfect time for starting anything. But once you start, you will know where you made mistakes that will help you make amendments and you will start learning rapidly. Successful people have a low tolerance for excessive planning as it delays action and may be, a missed opportunity. You know well, big corporate do make mistakes and make amends but don’t abandon projects. Tata’s Nano car project in West Bengal is a good example. Hundreds of crores were spent but when they found unmanageable opposition from a political party it was immediately shifted elsewhere. But the project continued.
So, friends quit waiting for perfection, absence of risk, right person to come along, more self confidence, a favourable administration. Take action.
The “placebo effect” is a term used in a number of different disciplines to refer to the way a person’s behaviour, attitude or feelings can change when they are convinced they’ve received or experienced something attributable to the change. The interesting part is that the change is actually based solely on perception and has little to nothing to do with the thing received or experienced.
In healthcare, placebos – fake treatments such as sugar pills or even sham surgery – work, in the sense that the relief of pain from a headache or a bad knee is often real. You can think yourself better. The reverse is also true. If you don’t have faith in your treatment, you are less likely to improve: effective treatment is an equal partnership between physician and patient.
There are obvious parallels with management. Management is much less scientific than the world of medicine, and probably always will be. Vast swathes of what goes under its name are half-truths at best. But although the corporate placebo effect – the power of expectation – is utterly unquantifiable, ruling it out in the name of science deprives management of one of its most effective ploys.
A placebo makes a toothpaste or detergent more effective, a food healthier, a drug more effective, or employees perform better and that’s what modern marketers do-create stories, build rituals and produce external cues to effect desired change in personal behavior and expectancies.
How Placebos Are Used In Marketing
As with all kinds of placebo effects, the placebo effect in marketing has to do with the way in which expectations are managed. To get your customers to want to purchase your products or services, you need to convince them that they want or need the goods you are offering. There are a number of ways to go about this. You can include positive testimonials in your marketing materials, for example, or you can share photos of people enjoying your goods on social media sites. The idea here is that customers will respond positively to depictions of other people reacting positively to your products or services.
Price and Psychology
The placebo effect in advertising is also directly related to price. Most customers have a mental limit to the amount of money they are willing to pay for a given product or service. You’ve probably noticed that many businesses like Bata India sell items at Rs.499/- instead of Rs.500/- or at “50 percent off the retail price.” Both of these are psychological ways to convince consumers that they are saving money by choosing these particular goods. Apparel brand Koutons offers goods at up to 80% discount. Paying Rs.499/- is more palpable than paying Rs.500/- even though it’s only a rupee cheaper; and any item that is marked down with a sales promotion instantly seems like a deal.
Closely related to the placebo effect is the idea of using celebrities or famous people to market products and services. This can be a bit tougher for cash-strapped businesses, but using local public figures can also do the trick. People often respond positively to seeing famous people endorse products or services. Using the likeness of a celebrity on your print advertising materials, in your social media or on TV or radio commercials can help draw in customers that value the recommendations of seemingly trustworthy spokespeople.
Keeping it Real
While the placebo effect in the forms of celebrity spokespeople, price-point and testimonials can all work with your advertising strategies to bring in new customers, your business should be realistic about the potential outcomes. Not all people are convinced by placebo effects, just as not all marketing or advertising strategies work on all customers or demographics. Your goal as a business owner should be to produce high-quality, fairly-priced goods and services. Coupling this with a solid advertising plan will keep consumers coming back again and again.
The Central Govt. Launched the 5000 crore India Inclusive Innovation Fund(IIIF), on Monday, the 27th, January, 2014. The Fund is the brain child of Mr. Sam pitroda, Advisor to the PM on Public Information Infrastructure and Innovations and the Chairman of the National Innovation Council. The fund is targeted at funding businesses at the bottom of the pyramid, with a social hue. The fund has been conceived to operate under the aegis of the government and yet be independent in its decision making. The IIIF has a three layered structure; a 10 member governing council, an 11 member investment committee and a 12 member management team. The top layer will have two members from the government but the government will not interfere in the day to day working.
The tenure of the fund is nine years. It will start with an initial capital of 500 crore. The ministry of Micro Small and Medium Enterprises contributing 20% and public sector banks, insurance companies and other quasi government financial institutions contributing the other 80%. Within two years it is planned to be scaled up to Rs.5000 chore. IIIF will target government and quasi government institutions for funding. The IIIF will seek registration with SEBI and set up an asset management company.
IIIF will target a return of 10%-12% IRR from the funded businesses against 22%-25% targeted by private Venture Capital Funds. The fund is targeting funding of up to 200 start-ups with funding from, Rs.50 lakhs to Rs. 2 crore per start-up, in areas like, agriculture, food, education, healthcare, financial inclusion, water, employment generation etc. At least 50% of its investments would be to MSMEs.
The fund is likely to face three challenges at the operations stage;
· How to attract non-govt. Capital.
· How to draw competent fund managers from private sector at below market salaries.
· How the new govt., in case of a change, will respond to the requirements of the fund.
Steps are being taken to make the Fund operational soon.
A business has to grow continuously. New products & services are being launched by new as well as existing entrepreneurs. You might feel your product is unique and you are not going to face any competition, but remember, people’s preferences also change with new products coming to the market, and people do like to experiment. You might have to face saturation in the existing market segment. To keep the excitement in business you must plan to start something new, may be a new product line or testing a new market segment.
Starting something new from within an established company is easier said than done for one good reason. It requires managers to act against many of their perfectly reasonable instincts. There are three common mistakes people make in launching something new. These are:
· They don’t put in adequate resources, especially on the human resource front, in start-up ventures to hedge on resource and manpower fearing failure.
· They usually keep the new project under cover, apprehending competition or sabotage from competitors. They limit the new venture’s autonomy.
These mistakes are due to apprehensions about the success of the new venture. In case of failure you fear looking dumb and losing precious money. The winning strategy comprises antidotes to the above mistakes. These are:
· Spend plenty upfront, and put the best, hungriest, and most passionate people in leadership roles. . Companies normally deploy less utilised and available staff to run new ventures, while for a new business to succeed, we should have the best people in charge. New businesses with limited resources and good enough people stay small. Under spending on resources and people can kill new ventures.
· Make an exaggerated commotion about the potential and importance of the new venture. Playing not to lose can never be an option in starting a new venture. Even multi-national corporates do fail at times. If you make big noise and news about the new venture, your competitors will fear your confidence and customers will eagerly await the new launch.
· Err on the side of freedom; get off the new venture’s back. Autonomy gives people ownership and pride. In ideal situations, new ventures with strong leaders should have all their own tools like their own sales & marketing teams.
“Kai zen” is a Sino-Japanese word where “Kai” means “change” and “Zen” means “good or better” or to say “change for the better”. It refers to any improvement, one-time or continuous, big or small in the same sense as the word “improvement” in English. In Japan all industrial or business improvement techniques are labelled “Kai zen”. Though the concept of Kaizen originated in Japan and is considered ‘The key to Japan’s Competitive Success’, these practices are now regarded as sound principles and applied by the managers world over. Companies/organisations in the world are, today, following the KAI ZEN concept for continuous improvement in quality, operations, productivity, technology, processes, cost reduction, company culture, leadership and personal efficiency. Kaizen does not mean that the improvements should be huge and drastic. It aims to systematically take incremental steps towards improvement. This concept as a business philosophy has become popular because, it aims at continuous and gradual improvement at minimal cost, involving and optimally utilizing the existing labour/staff from CEO to the level of a janitor. The companies hold periodic KAI ZEN conferences to celebrate success and reward those who contribute effectively.
Let us understand the principles on which “Kai zen” works.
“Kai zen” works on three basic principles, which are;
• Identifying & Eliminating Muda(waste)
HOUSEKEEPING. Housekeeping is a process of managing the workplace where value is added to the products or services before passing them to the next process where they are formed. For proper housekeeping the process is called 5 ‘S’ methodology. The term 5 S is derived from the first letters of five Japanese words which denote five practices which lead to a clean and manageable workplace. These practices are Seiri(Sort)), Seiton(Straighten), Seiso(Sweep), seiketsu(Sanitize) and Shitsuke(Sustain). Action required under each practice is as under:
SEIRI (SORT). Separate things which are not needed and put a red tag on all such articles. Give everyone to identify if something is of use out of the separated items. All items with red tag which nobody identifies as needed should be eliminated by sale to employee, scrap dealer or transfer to trash for proper waste management/processing. The idea is to ensure that everything left in the workplace is related to work. When this is done effective use of space, simplification of tasks becomes possible. Future purchases are also rationalized.
SIETON (STRAIGHTEN). This step requires “ A place for everything, and everything in place” that is, everything required in the process is assigned a place and put in its assigned place so that when required it can be accessed or retrieved quickly and should be returned to the same place immediately after its use. The correct place for everything must be decided keeping in view the work flow and people who will use it. Each location must be labelled prominently for easy identification. This results in efficiency of the work flow because no time is lost in locating things.
SEISO (SWEEP). The third step is cleaning the workplace and giving it a pleasing look. No area should be left unclean. Every employee should look areas assigned to them as a visitor and should ensure it it gives a good impression.
SEIKETSU (SANITIZE). This step, more or less, means to set up standards for cleanliness and tidiness. It requires both personal tidiness and work place cleanliness. Standardizing expectations makes them automatic and empowers all involved to monitor and make adjustments to achieve performance benchmarks.
SHITSUKU (SUSTAIN). To maintain, what is achieved in the first four steps above, requires discipline and commitment. Once this self discipline is achieved, personnel voluntarily observe cleanliness and orderliness at all times, without anybody reminding.
IDENTIFYING & ELIMINATING MUDA (WASTE). The next step in achieving Kai zen is identifying & eliminating muda, a Japanese word meaning, waste. The entire process of manufacturing/assembling of a product from procurement of raw materials to the final product is series of value-adding-activities. In Kai zen, the aim is to identify & eliminate seven types of waste caused by over production, waiting, transportation, unnecessary stock, over processing, motion and of defective parts. These are discussed briefly here after.
Muda of overproduction. Overproduction occurs due to expectations of a machinery breakdown, defective products which are likely to be rejected and employee absenteeism. But this overproduction to meet sales targets results in tremendous wastage in terms of excess inventory, manpower and utilities, excess storage, added transportation and administrative costs and also on account of additional interest on capital employed.
Muda Of Inventory. Maintaining excess inventory in the shape of finished and semi finished goods, raw materials and spares do not add any value, rather it adds to the cost of operations. Deterioration in quality, especially in case of products with limited shelf life adds heavily to the cost. Just in time (JIT) system of production helps to solve the problem.
Muda of Rejects. Production of defective products result in rejections, returned sales, interruption in the production process and loss of credibility among customers. Streamlined process and worker training coupled with regular and frequent checks can solve the problems. Workers views on quality of materials and machines can also give an insight into the reasons.
Muda of Motion. Unnecessary movement of workers, materials and equipment do not add any value to the output and should be eliminated. Workers movements while working should be ergonomic to reduce fatigue. Flow/movement of materials should involve minimum effort in terms of physical effort. Equipment required during process should positioned such that those who need them don’t waste time in accessing it.
Muda of Processing. Wastage during process occurs due to lack of proper synchronisation and bottlenecks. Such deficiencies should be studied and eliminated after discussions with workers, supervisors, helpers and works manager. The number of workers in a process should be minimized, as more workers mean longer process time, incidence of more mistakes, longer process time and consequently avoidable process costs. Training of workers is also very important. Lack of proper training can derail the entire production process. Wastage during process is also due to insufficient and defective machinery equipment. For example, if more than one worker is to work on some equipment, there will be waiting period and wastage of worker’s time and delays in the production time. Worn out machines will mean frequent breakdowns and repairs resulting in disruption of production, loss of man hours, delayed deliveries and consequential financial costs.
Muda of Waiting. Idle time in a process line is wastage of resources. It can be due to imbalances in the production line, delay in delivery of materials and breakdowns. These need to be carefully planned according to the production process and plan.
Muda of Transportation. Transportation of materials is an important part of operations in any production process. This may be in the form conveyors, forklifts, cranes, trolleys or vehicles. Production process should be designed in such a way which minimises the movement and distance from the source of supply/storage to the point of use.
The process of continuously identifying , reducing and eliminating the above mentioned wastes from the work place is the essence of Kaizen, but the following must be kept in mind.