Talk about your Business Model

 

While engaged in business negotiation you need to explain about your business model at some stage. Therefore, it is necessary that you must have sound knowledge of your business model, and how it follows through. Check out for the main components of a business model and bring this into your business ASAP

Business Model

Started as a buzz word during the dotcom days, business model has to come to stay as a powerful tool in business negotiation where parties thrash out how they can work together in a particular deal. Investopedia defines business Model as “The plan implemented by a company to generate revenue and make a profit from operations. The model includes the components and functions of the business, as well as the revenues it generates and the expenses it incurs”. A sound Business model can take your business to the top range whereas a poorly made one spells doom. Let me give you ten components of Business Model for you to adopt instantly:

1. Identify/Create Market Need: Look at the market place; there may be a specific need that remains un-fulfilled; or may be that the current supply of products does not give optimum results. Conversely, you can create a need that does not already exist but could offer more convenience. Computer based telephony was a created need that did not exist previously

2. Design Product to satisfy this Need: Second component relates to how you satisfy the need that you have already identified or created. This involves lot of thinking, technology, engineering skills and stipulating parameters of quality and technical specifications. Excellent features of the product, its un-failing quality, convenience it offers and finally its capacity to integrate seamlessly with existing systems are some of the concerns need to be addressed. The outcome is Voice over Internet Protocol (VOIP) that was found to satisfy the need for computer based telephony

3. Introduce Product to Market: Third component has everything to with what the market bears. Your business model must involve activities covering release of the product as test marketing or as a beta version to be improved later on. The depth of market along with its willingness to accept & adopt your product is a key criterion in-built in your model. If ever failure occurs the business model must provide honourable retreat or withdrawing and introducing it with modifications later. If the outcome is indeed successful you have to begin a marketing campaign aggressively

4. Price & Discounting: Your business model must take extra caution in this area. You can either choose to come up with a lower price for basic product and higher price scales applicable for use of advanced features or you can introduce at a market skimming price so that you can evade competition in the short – run. Your business model must also address the concept of discounting price scheme for bulk purchases, wholesalers, business partners or buyers under agency arrangements

5. Selling & Commission: Fifth component is how to set up sales and how much you are willing to share as commissions with dealers and business partners. In most business models these re- sellers, business partners, dealers and agents who get double benefits. One under price and the other under sales; the latter is referred to simply as commission and written-off in the trade invoice or paid separately

6. Delivery & Stand-by: Though it is the sixth component in our discussion, it is the most critical one that can damage relationship with re-sellers or direct buyers. Time, mode, quantity and delivery schedule are matters that cannot be pre-determined in any business. Nonetheless, it must be brought in as a standard element when product is sold. I do not suggest any uniform delivery mode as none exist in today’s context. What your business model must provide is the optimum manner in which you will handle delivery. Stand-by procedures often follow the delivery schedule and must come into force as and when you detect snags in delivery

7. After-Sales: The seventh component is after-sales; your business model must stipulate after-sales terms covering replacement, repair and product warranty. The best example of after sales is when you buy a Toshiba laptop; the guys will give a stand-by laptop for your use in case of break-down till they repair it or simply give you a new replacement. I am yet to see this type of after-sales from other laptop vendors

8. Review: You must build the component of review in the business model so that after successful conclusion of a business transaction and frequently thereafter you continue to review the sale by being in touch with the re-seller or direct buyer

9. Flexibility: The ninth compartment is to bring some degree of flexibility into your business model; all the above eight components are flexible and not rigid as sacrosanct. When the need arises you must be able to tweak your components quickly and get the operations going. You are not the one who should bicker acrimoniously on price and sales terms when a big deal is in the offing. By the same token you will not throw away time tested business model for the sake of a single non-repetitive deal

10. Cosmic Balance: The final component has got to with your own cosmics; cosmics are aspects that are beyond facts & figures but still influence the conduct of your business and the formulation of your business model. Your business model, therefore, must bring cosmic balance so that you make better sales and generate more revenue and at the same time make good profit and keep your buyers glued to you forever.

Muthu Ashraff

Cosmic Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

Finance for the Holiday Season

 

Holiday season is round the corner. Christmas comes but once a year; when it comes it brings the season of cheer. Your finance constraints should not stand between you and your enjoying the holidays. Here are few tips for you to follow through:

1. First and foremost decide where you are going to be during this season; be with the family at home or take them to a faraway land by the beach or under the shadow of peach trees

2. Assess how much is the budget for this round of holidays. Once you have worked out a figure find out how much you can marshal from your own source and how much is left to be topped-up

3. Now you must find out how to fill the shortfall; at this juncture two issues come to the fore. One relates to your personal status and the other relates to your finance sources

4. Check your personal status: you can be a business person; fully-employed in a company; part-time employee somewhere; or self-employed

5. Check your credit status: if you have excellent or good credit score then it sounds fine; any average or poor score is still redeemable. If you have bad or miserable credit score your chance of getting finance is dim

6. Now check your sources of finance spanning in consumer divisions of major banks, credit unions, building societies or savings and loans associations

7. Either choose temporary enhancement of your credit card limit to tie over the holiday season or go for a personal loan to finance holiday season

8. If you choose credit card enhancement negotiate with the banks on the amount you require, their willingness to extend the period of payment, the relaxation of minimum payment for the season without incurring any interest over-charge

9. If you tick personal loan you have to do much more ground work. The lender would look at your credit status, past performance and affordability before making a commitment. Furthermore, they would also look at the terms and conditions to decide upon the rate of interest that is charged for this personal loan. Primarily, the period of repayment matters. Depending on the market movement short and long term lending is priced lower or higher. If you tie for a long period say five years it will be tagged to bond market rate and interest will be charged accordingly. If you are eying a short term say one year loan then the rate would correspond to money market rates and interest will be charged accordingly. Interest rate you pay is also governed by the fact whether your loan is secured over collateral or remains un-secured. There is another side of the coin: you can also book in for fixed or floating interest rates

10. Before signing on the dotted line do a search to find out personal loan terms and conditions from at-least 3 sources and do what we call as “comparative terms”. You must also get the precise amount the lender would charge as commitment or engagement fees

11. It is advisable that you clear out the option of early payment with the lender. Generally, personal loan is granted for a fixed term of X number of years. In case you wish to make a lump sum payment during the pendency of the loan, the lender is not amused. This is because he has to find ways to park the excess funds. Ordinarily, lenders insert a clause that such early payment attracts a penalty. When you go for a personal loan negotiate for the removal of this penalty clause

Even though you are borrowing to enjoy your season of merry be rest assured that it comes with a big plus point. You are relaxed; more than that your cosmics are fine-tuned. Cosmics are aspects residing within you shaping and influencing you and your business or career though these are un-seen and un-noticed by you. After giving a chance for your cosmics to work you return to your office desk as a new-born guy with zest and zing.

Season’s Greetings

Muthu Ashraff

Cosmic Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

Seven Strategic Risks facing Business

 

Business faces some kind of risk in normal course and that is inevitable. What is important is to identify and understand which risk turns out to be a strategic one. Normally such risks arise due to a failure of one or more of your strategy in seven areas. Let me elaborate seven strategic risks facing business:

1. Reputation: This strategic risk is the most critical. Your reputation is your business. If it is damaged your business will never recover. You must ensure that the name of your company, its processes, its products and its image remain always above censure. Recently a Chinese milk powder company went out of business when its products were found to contain chemicals injurious to human life. When this happens business must take every effort to neutralize bad press, news or propaganda while at the same time making amends to the damages already done

2. Regulatory: In the case of risk of reputation business has control over what it can do about it; in regulatory risk business faces situations beyond its control. As a strategic risk regulatory aspects can be debilitating. Recently, Blackberry a mobile and smart phone device sold by Canadian company Research in Motion (RIM) has to face spate of restrictive regulations in several countries. Effective negotiations, compliance with regulations along with ensuring that such regulatory rules do not recur are few of the risk control measures recommended

3. Technology: If you are in IT you know that technology is changing hour by hour. Today technology is the main strategic risk for businesses in internet and communications. Look at how Microsoft was losing its internet search engine market. Google’s adoption of Android Operating System gives endless hours of worry to search engine Bing. Updating and bringing still better technology are measures to neutralize this strategic risk

4. Marketing: Strategic risk in marketing has time limitation. When a business introduces novel marketing strategy it will have upper hand for some time. By and by its competitors would also introduce similar strategies bringing the score to even. Sticking to a single marketing strategy for promoting your products is therefore not possible. Look at the cola war that continues between giants Coca Cola and Pepsi Cola. Both are engaged in aggressive marketing campaigns including targeted advertisements against each other and heightened marketing strategies adopted to secure advantages. The one who blinks will be eliminated. So the war continues forever

5. Finance: This is a strategic risk that affects every business small, medium and large. Small business has more potency to be destroyed by finance risks than its counterparts in medium and large scale operations. Strategic finance risk arises in many areas and stretch from weak capitalization to creation of financial instruments to manage exposure to risk. Businesses that borrowed large quantum of money by issuing exotic instruments are in for trouble now. They have brought down along with them the lenders, creditors and even governments. Look at what is happening in the Euro Zone

6. Key Person: Insurance companies are smart; they brought the key person insurance pretty long time ago. Business faces this strategic risk when a prominent leader or manager leaves office. High profiled companies assign head-hunters to get their choice of key persons tumbling the companies where these persons previously worked. Though this strategic loss affects companies across the board, the worst mauled are in those in the field of technology, food , travel and tourism. Business must apply several measures to neutralize if not eliminate this strategic threat

7. Cosmic Risk: Cosmics as a risk factor is something new. Cosmics are aspects residing in every person and as an extension in every business. Cosmics can arise in different ways. You have to understand cosmics and turn it to your advantages. Ignoring cosmics can lead to failure. An interesting example is the James Bond film series. Albert R Broccoli produced 16 films in the James Bond series where he portrayed Bond as a male chauvinistic spy. After his death in 1996, his successors diluted this concept and today the appeal of the Bond as a ravisher tinged with magnetic personality has evaporated.

 

Muthu Ashraff

Cosmic Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

Should Business Idea must be original to Succeed?

 

When you speak to someone about your business idea the first question that pops up is whether it is an original one. So business persons are more concerned with innovation and make their business ideas sound original. But they have not looked at the performance angle. Should every business idea must be original to succeed in the market place. Let us find out.

Your business ideas are sparks of your studied imagination. You get a bright idea in your mind based on your experience and learning and from what you read and reflect upon about how others have gone through. I just looked at the Fortune December 12, 2011 issue and read about the list of 50 Movers and Shakers profiled there. Afterwards, I superimposed the originality or otherwise of the business idea represented by four of those movers and shakers. My findings are as follows:

Original Indeed: Mark Zuckerberg Co-founder and CEO of Facebook ranks as a businessman who brought the original platform on social networking in style and relevance. Leader of the social media, Mark founded Facebook in 2004 and today its sales top 4.3 Billion U S Dollars. The present valuation of the privately held share capital is between 79 to 82 Billion U S Dollars. The financial market awaits the initial public issue of the Facebook expected to open in early next year hovering around 100 Billion U S Dollars. This is remarkable success of an original business idea

Improvement: Larry Page Co-founder and CEO of Google went on to improve the business idea of internet search engine in competition with Microsoft. He improved the technology of search engine by introducing innovative platforms such as Android Operating System and implemented it seamlessly across various products offered by Google. From Android it was easy to get into telephony and the hand set market. Just look at Samsung Galaxy Tab 10.1 and you will realize how effective Google as search engine is. It is giving strong competition to Facebook in social media by introducing Google+ which has more than 40 million users right now. Revenue for 2011 expected to touch about 40 Billion U S Dollars

Adaptation: Hamdi Ulukaya Founder and CEO of Chobani is dubbed as the King of Greek Yogurt. There is no such thing as Greek Yogurt or Armenian yogurt. What Hamdi did was to adapt the business idea of yogurt in pleasing flavours including vanilla, strawberry, peach, blueberry and honey and mixed with pomegranates and other fruits. He then presented Greek yogurt to the American market obsessed with Greek yogurt and crazy over health food. Founded in 2005, Chobani is now ranked as third largest yogurt company with sales targeted around 700 U S Dollars in 2011. Its market share in Greek Yogurt is almost 50 % while in the overall industry Chobani has about 10.4 % market presence

Re-Make: Robin Li Co-founder and CEO of Baidu is a classic example of a shaker who just did a re-make of an internet search engine in the fast growing Chinese market. Robin saw an opportunity of re-making the business idea when Google made a graceful exit from Chinese market. Modelling on Google, Robin has everything that Google did or offered. He integrated with Android Operating System and expanded his web portfolio to include search, on-line business and auction based marketing methods. Baidu is now controlling 75 % of the internet market in China

Cosmics: All four business persons profiled above took their business idea and fashioned it differently. But the binding thread that runs across them is the way their cosmics helped them succeed in their chosen ventures. It is because cosmics make each businessman succeed in a particular field or sector. Cosmics are aspects residing within everyone shaping and influencing his idea and business. 

 

Muthu Ashraff

Cosmic Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

Put Your Personal Finance in Order

 

Today we observe that many a business person mixes business finance with personal finance. This trend is too acute in the case of small business where the line dividing business and the owner is much blurred. This has caused so much of troubles lately that every business person must be coerced to put his personal finance in order before doing anything else.

Streamlining your personal finance dictates that you tick off each and every instruction below as right and doable:

1. Legislate in your business model that you will never ever draw more than one-third of the profit or forecast-profit of the business. Now is the bitter part: learn to live within this ceiling

2. Once in a way you would have over-stretched your personal finance; that is excusable but do not make this as a habit

3. When there is indeed some over-stretching and your manoeuvrability is limited you must work consistently to improve the situation. Hoping for an Aladdin’s Lamp to solve your financial worries is meaningless. Of course, you are justified in having the thought that the situation might improve over a period of time; but if you are not going to act promptly the situation might even get worsen. A classic example is what is happening in Greece. The Greeks have jacked up public expenditure; borrowed more money to finance it; they do not want to tighten their belts; now they want the rest of the world to give them some more money

4. Never get into arrears in utility payments such as electricity, gas, water, telephone and mobile s as these bills add to your finance woes

5. Learn one wisdom: Credit card due is a treble-edged sword; if you do not make the minimum payment there is a plenty; even if you make a minimum amount due still the banks charge you interest on the whole amount including the amount you have paid in; if you make further purchases that amount is also added to your burden and payable in the next cycle. Therefore, either you pay the entire amount due well before the due date or never use the credit card at all

6. Contrary to many financial gurus, I hold the opinion that you must pay your bills manually rather than electronically. It is because you never know the amount you are paying till you get the bank statement. On the other hand you might be charged interest if by paying these bills your account gets overdrawn. A systematic way of paying bills as these fall due must be initiated by you rather than you allowing some machines to handle this on auto mode

7. Never lend your money to your friends or members in your family circles as the chances of getting it back is slim during recession

8. You must streamline your purchases for home and personal needs. Shopping must be done either weekly or fortnightly basis in a planned manner. This rule may not apply to urgent or daily purchases. Drive away the feeling of swiping your credit or debit card at supermarkets at your whim and fancy

9. Your business makes profits; such profit must be allocated in three ways; one part be invested within business; one part be invested outside business and the remaining part goes as your drawings. In this scheme the second one is very important. You must invest about one-third of your business profit elsewhere so that you will be able to get some return when you really need it.

10. Always save for the rainy day; keep some spare cash stuck away somewhere in a bank, bank locker or in some corner in the house

11. Examine your cosmics for guidance and inspirations. Cosmics are aspects that are beyond facts & figures but still influence the conduct of your business and your personal finance; cosmics reside in every individual and by extension in every business. A business person who understands his cosmics can plan out his personal finance by culling the fringes of his spending patterns. Moreover, he can focus on keeping a tight and right balance over income, savings and expenses.

 

Muthu Ashraff

Cosmic Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

Making Money in Microenterprise

 

Economy is too stupid; finance in doghouse; most families are struggling to make ends meet; gloom all over; some 45 Million Americans have slipped into poverty; recession is not abating. Endless media outbursts on state of economy paint a picture of gloom. But there is light at the end of the tunnel: despite all these concerns you can still make money by moving into a microenterprise. Here are details:

Do a quick Test:

If you are in one of the following situations, you are the suitable candidate to start a microenterprise:

1. You are unemployed or under-employed, the latter means you are not in a full time job or working below your level of qualifications

2. You are a housewife having spare time but without any individual earnings

3. You are an immigrant

4. You are member of minority community lacking social mobility

5. You have individual talent and creativity but lack economic opportunity

6. You are unable to budget as income is less and expenses have spiralled

7. You have no collateral to approach mainline banks for finance

8. Finally, you are in one of the growing pools of people who have slipped below the poverty line

What is Microenterprise?

A microenterprise is the smaller version of a small business; hope you do not get confused by my using the word small twice. It is simply a low scale business that you can start with least amount of capital and without many assets. While Government administrators do not specify any minimum capital, asset or employee levels for microenterprise they have come up with some kind of ceiling where microenterprise gets elevated to small business. The most recurring ceiling comprises the following:

1. Maximum 10 employees

2. Maximum capital about 50,000 U S Dollars

3. Maximum Assets about One Million U S Dollars

The concept of microenterprise was originally founded by Dr. Mohammed Yunus, a Bangladesh Social Reformer in 1976 and accepted by the U S Small Business Administration as a distinct type of business in 1991. Association of Enterprise Opportunity (AEO) of USA is promoting the concept in America hard resulting in more than 2 million such microenterprises operating successfully.

Distinct Advantages

Microenterprise gives results in quicker time compared to other business types. Some of the key benefits that arise are:

1. Creating jobs opportunities to you and others much faster

2. Jacks up your income earning capacity in short time

3. Takes out your financial worries immediately

4. Gives you a social status as a business person with least amount of capital

5. You are back in form with the purchasing power that eluded you for sometime

6. You are engaged in something, which itself is a relief for you

7. You provide goods and service in improving convenience of your locality

8. Your output is priced competitively as the cost of producing it is much smaller compared to other types of business

Where you can Pitch

You can pitch in any sector where there is opportunity for you to use your talents and turn out goods or services that are pretty saleable. I am suggesting few areas in the following list, which however is not exhaustive:

1. Boutiques or corner shops

2. Home-based kiosks

3. Skilled operations such as carpentry, plumbing, welding etc..

4. Specialized farming of grains or exotic fruits

5. Craftsmanship that can be provided in a localized set-ups, such as garages, picture framings, etc..

6. Creative products including painting, music, dancing and entertainment

7. Providing management services such as event management, security, maintenance and others

Caveat

Before embarking on a microenterprise you must pause for a while and think whether you have a key driving force in you. That is your cosmics. You know that, cosmics are aspects residing within you shaping and influencing your business throughout. If you are not going to evaluate your cosmics and find the suitable microbusiness for you, your chance of making it a success is doubtful or call it micro.

 

Muthu Ashraff

Cosmic Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

How to Package your Personal Branding?

 

Many a successful business is built around a single person who is either its owner or founder. This person endows his personality to the business thereafter he, his personality and the business are identified together. As time goes on his personality transforms as the brand for his business. When this happens we have an identity known as personal branding. For the success of a small business as well as larger ones personal branding is a definite must. Let me un-wrap a personal branding package for you:

Personal Branding Explained: The concept of personal branding was originally introduced in 1937 by Napoleon Hill in his book “Think and Grow Rich”. Later Tom Peters developed the concept as part of corporate culture in his book “In Search of Excellence”. Today personal branding as a distinct identity is popularised by many personal branding gurus, chief amongst them is Dan Schawbel, whose writings have been quoted extensively in business literature.

Personal branding is basically packaging your unique personal features into a consolidated brand. This branding then turns out to be a valuable asset in your repertoire. At the zenith, your business and your personal branding are as inseparable as Siamese twin. There is a risk of your indispensability though. Once you have retired from the business the personal branding you have developed could boomerang on your business, unless your successors too could be cultured in similar manner. Here is your personal branding package:

1. Shaping your Body: You can be tall, of medium height or short person. Whatever your height is you should keep your body in good shape to garner instant attention. You are aware most people get impressions on the first sight which is difficult to erase later on. Therefore, you have to morph your body to make you a smart and pleasing person. A big tummy has two negatives: it can cause health issues and it can kill your business chances too

2. Distinct Clothes: I am not suggesting that you should have Armani collections and Versace accessories in your wardrobe. But whatever you wear it must fit your personality and you must stick to that. You must do what we call as power dressing. It can be simple or fastidious; but keep it in your mind that you are half and the better half is not your wife but your dress

3. Shining Face: You know face is the part of human body that is watched more than any others. An adage goes thus: face in the index of mind. Of course there are different face structures; round, oblong, thin and plumb and so on. What matters is not the shape of the face but how it brightens you up. You would have seen men and women whose faces made remarkable impressions in your mind. It was a pleasure to look at them and you still remember how those faces were shining and how you were galvanized by that pleasant smile

4. Winning Attitude: When you speak or move, it is the attitude that comes out. Your uniqueness in terms of body, clothes and face convey in a single word about you and your attitude. Without a winning attitude none of the above can deliver the goods. Attitude is always based on the belief system you have about you, your business and the person with whom you inter-act. Great men are always born with winning attitude; successful men develop it. Therefore model yourself with those who have succeeded in business with positive attitude. Steve Job is an excellent example

5. Broad Knowledge: There is no requirements as such that you should get “A” grades in your subjects while in college; but gaining broad knowledge is indeed is compulsory. When you speak you must flaunt that knowledge not to impress others but to bring them onto your side; make them see your point of view; get them to think like how you think; that is personal branding in a nutshell

6. Fitting Conduct: All the above ingredients can be thrown over-board if you are lacking in appropriate conduct. You have got to play by the ear; rise to the occasion; conduct yourself in exemplary manner. You can be harsh sometimes but well meaning; you have to be guided by ethics and logic while inter-acting with staff and customers. Never allow your emotions to take charge and fly into rage. Even if that happens you must have the courage to say sorry and make up quickly. You must show dignity and decorum befitting every situation you are in, in a manner that makes you a loved person more than a feared one

7. Leveraging Cosmics: You have hidden resources which we call cosmics; aspects that are residing within you shaping and influencing your business throughout; you must understand your cosmics and leverage it in your business life. A good example is the charming smile that you have accompanied with the soothing manner in which you speak to people. You can leverage this cosmics in negotiating and closing business deals at ease

Once you have these seven aspects you are well in the way to have your own personal branding.

 

Muthu Ashraff

Cosmic Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/