Tag: Strategy

Different companies have different motivations to go public. Some go public in order to attract investors, and some others simply find it glamorous. Many others think they have only arrived when they file for an IPO (initial public offering). Yet, there are a few others who believe that going public is a safe way to exit. Indeed, when companies look at IPO as an exit strategy, they are making the fatal mistake of washing their hands clean off a great company with immense potentials. We all know that many companies which go public often try to sell them and make quick money, only to later realize that their former company achieved greater heights. Instead of looking at IPO as an exit strategy, companies should warm up to the idea of it being an entry strategy. Indeed, IPOs help companies to gain in stature and become more competitive than they previously used to be. For this reason and many others, companies should start looking at IPO as an entry strategy. In this article, let us take a look at why IPO can make for such a great entry strategy, instead of it being otherwise. IPO opens you up to the world When you make a public offering, you are essentially opening yourself up to the investing world, which can be a great thing. This will bring you added marketing opportunities, clients and even business deals across the world. [php snippet=1] It brings stature A company that has gone public is usually seen as a larger company. Of course, there are a number of small companies that have gone public but they still seem more reliable and trustworthy than a regular company. There is a psychological effect to public companies, and it can only do you good. Helps you get rid of financial bottlenecks It is always easier to rise funding when you go public. Whatever financial bottlenecks you might have, you can easily solve them when you have access to investors of all kinds. Public investors tend to be safer than other kinds, as there will be transparency from all sides. Easy publicity and credibility There is nothing better than being able to gain some free publicity and credibility. When you go public, your name gets splashed across investment sites and stock news channels, which helps you to get more publicity. As you will be required to reveal more information about your company, you will also be seen as a reliable and credible source. Looking forward Certainly, going public should be looked at as an entry strategy instead of an exit strategy. If you are able to convince yourself that your company will be successful, you can do that to the public as well. As long as you have an honest and workable business plan, an IPO strategy should work in your favor. Instead of looking at going public as a way to sell your company and retire, look at it as an entry strategy that will help you grow as an entrepreneur.

Big data analytics has always scared SMEs away. The primary reason is their inability to fund it. On the other hand, large enterprises are capable of investing huge amount of money in storage capacity to store data. Stored data can later be analyzed to gain insights. Big data, as a matter of fact, needs a lot of storage space; however, it is an impractical approach for SMEs. Nevertheless, SMEs can still reap benefits of big data. Big data analytics is surely under the purview of SMEs, provided they look the other way round. Big data is a surplus amount of data in both structured and unstructured form, gathered from customers.  The data sets are so large that it is practically impossible to analyze it using traditional ways of processing. Every business faces a unique set of challenges that impedes its growth. Businesses look for opportunities to gaining insights into big data not otherwise possible with existing data. How to make big data analytics affordable for SMEs? Find out why you want big data For a small scale business, it is very important to know why it does need big data. It could be to grow your sales potential for which you may want to perform customer profiling.  You may want to study in-depth customer behavior to improve product design, add new product features or develop a new product.  You may also be looking forward to process improvement by understanding customer behavior. [php snippet=1] The point is that you should specifically know what you want to improve at a given point of time.  How is your existing data incapable of solving your purpose? What extra data would you need to plug in the gaps? Accordingly, devise strategy and fix key parameters to capture only that specific big data which is capable of answering your queries. Trying to record everything that comes your way is no way to go forward and only adds to your existing data load. Analyze data within budgetary constraints Data analysis can become a mind-boggling task.  Be prepared with how you are going to treat additional data captured. The first step is to involve specific people within your organization who closely understand the problem. Get the most experienced data analyst with you. Use existing tools and techniques to analyze data. Analyze a smaller data set and see if you are able to get information that you are looking for. If yes, test your approach on a bigger scale. If no, find out what limits you to get specific information and redefine your approach. It is possible that you realize that you are trying to search for wrong information and that it won’t solve your problem. It is also possible that you don’t need big data to solve it. Initial checks during data analysis will ensure that you are not deviating from your goal. This helps you to save gratuitous costs. SMEs have a clear limitation of storing huge amount of data. They invest in big storage servers only if they are assured of good ROI. Subscribe to cloud storage services Now that you’ve decided to invest in big data to find a solution to your problem, provided you are well aware of what you are looking for, subscribe to pay-as-you-go cloud subscription model. There are many cloud services that enable you to create your own analytic sandboxes. You are free to scale up your requirement when required or stop the service when your project is complete. This helps you to bypass capital investment and your project cost stays under control. Big data experiment is a grey area and as a small scale investor, you don’t want to risk your hard-earned money without conviction. How do SMEs stand to gain from Big Data Analytics Gain real-time insights and assist decision-making process Drive innovation and business growth Anticipate the scale of problem before they become too big to handle Prevent problems rather than step into damage control mode Get the most out of business opportunities at the right time Save time and money Improve productivity and efficiency Better customer service through closer understanding of customers Challenges faced by SMEs and how to conquer them Many SMEs are of the view that big data is only suitable for large corporations. This is owing to various challenges faced by them. Some of them are: High cost of storage Big Data means tones of data generation. Storage and maintenance costs are only manageable if SMEs become competent to handle Big Data. The cost of choosing a hybrid cloud computing model for data security reasons can be justified only with sufficient knowledge about Big Data. Skeptical about investing time and energy SMEs should realize the potential of Big Data and work out ways to exploit it within their limited capacity. Initially, Big Data Analytics may sound like a daunting task however once they extract something of value, they can open gateways to growth and challenge larger organizations. Lack data expertise Many SMEs are incapable of processing Big Data. Practical and affordable technology is available in the market. There are many useful data mining tools available. SMEs can take full benefit out of it provided they know what to ask Big Data and how to apply it pragmatically. Ambiguity about sources of data collection Social media, emails, CRM applications generate a lot of data. To begin with, focus on smaller data sets from these data sources.  Try to understand customer behavior patterns. While company’s own sources of data serve the purpose to a larger extent, it is equally important to engage channel partners. Channel partners can aggregate and manage data from sources which SMEs can’t. Their expertise about vertical and market segments do a major contribution towards value addition for customers. The way ahead It is the right time for SMEs to harness the power of Big Data Analytics. Their focus should be to find the right solution. This will enable them to develop a unique image in the market and gain a competitive

A business faces a higher risk of a downturn and diminishing revenues when it caters to one product or market.  During economic uncertainties, small and medium enterprises are more vulnerable than their larger counterparts. For a smart business, with a focus on long-term growth, it is important to diversify into different products, industries, and markets.  This not only helps you to boost revenue but minimize risks associated with business uncertainties. It cannot be denied that diversification holds considerable risks. However, proper planning and execution shields your business during slump besides giving you the wider exposure to safer markets. A CRISIL study indicates that average sales of MSMEs with a diversified product/service, customer and geography base grew by 18 percent in 2013-14 in comparison with 10 per cent growth attained by businesses with limited or no diversification.  It also stated that track record and experience play a significant role in successful diversification. [php snippet=1] How does diversification shield your business from various risks and aids growth? Circumvent downturn in a particular product Relying on a single product is laden with risks. A product may become obsolete and demand may suffer. For instance, if you are a manufacturer of computer accessories, where technological change is rapid, it is imperative for you to keep a tab on changing technology. Demand for a specific accessory may become low due to obsolescence. In order to prevent a sudden shock to business revenues, you can keep your revenue stream flowing by manufacturing another important accessory alongside.  That’s why, it is also important to focus on product development strategy because your rivals can soon imitate your existing product design. Evade stiff competition in a particular market and establish stronger base elsewhere Continuing the above example, if you sell your computer accessory to a specific market where the competition gets tougher every day and your margins are shrinking, it is always better to explore underserved markets. While you keep your existing customers happy, you open accounts with other customers in a different market.  You can expand your customer base there and establish yourself as the key provider. Stabilize revenue stream through client diversification Every business is prone to market volatility.  When you focus only on one product, you are at risk of losing significant business when your key customer closes a door on you.  It could happen due to various reasons like availability of better vendor, availability of better price or better credit, change in business strategy, or bankruptcy etc. Under such circumstances, you are left high and dry. Conversely, client diversity endows security of consistent revenue flow to your business.  You get a better control over your business revenue and few customer drops here and there don’t hurt very much. Even the loss of biggest customer can be contained by spreading your clientele revenue. Alleviate business risks through sector diversification When you operate in a single sector, your business is vulnerable to sudden changes in that sector. The sector could be marred by a sudden dip in demand. It could face high taxes and duties by the government that severely affects your margins. In the worst case scenario, there could be a long-term decline in the sector. For safety reasons, small and medium businesses should at least aim to operate in two sectors to avoid this risk. For instance, if you are an application service provider with an expertise in the medical industry, it could be viable for you to explore other sectors like insurance, retail etc.  Serving different industries not only mitigates volatility concerns but also offers you diverse servicing experience. Explore geographies to minimize geographical risks Do not be bound by geographical restrictions. If you serve customers only in one city or area, your long-term business growth is limited to the growth in that city. Step out of your comfort zone and explore new cities where you can find more customers.  Expanding geographies helps your business grow and you are less likely to be affected by slower growth rate in one city.  Ideally, an SME should target at least two cities with regular clients. Expand your office locations to curtail resource risk Again limiting your business to a single physical location is susceptible to resource risks. You may have to pay up more for office space. There may be a shortage of skilled labor or raw material in that location. Though your customers are spread across different cities, serving them through a single location could be risky for your business.  A second or third location probably in a different city gives you a sound backup and you can also cater to extra load burdened on single facility. How to diversify your business? There’s no doubt about leverages bestowed upon a business through diversification.  However, it is important to pursue diversification with the right approach and strategy in mind. Diversification does not mean that you have to venture into a new product altogether of which you have no knowledge or associated experience. Build upon existing resources To begin with, a business proprietor should consider building upon existing resources like machinery, space, manpower, skills etc.  One should think about exploiting existing resources for other purposes.  Core strengths of a company can be utilized to offer complementary business service. Offering complementary services is a great way to diversify. Customers can benefit from bundled services. Do not shift focus from core business Core business operation should not be tampered with during diversification.  Think of ways that require minimum investment whilst opening new markets for you.  This ensures that there is no financial instability due to diversification. Many a time, diversification is a consequence of natural progression.  Your product line expands with time and experience. With a well-established brand name, your product reach expands. For instance, a make-up product manufacturer making foundation and powder can venture into eyeliner, lipsticks, mascara etc. Be mindful of your weaknesses Ideas for diversification also stem from business weaknesses. A business owner should conduct business feasibility in the longer run. Identify the threats it

Any fledgling business that seeks to grow will require funding. The amount of funding required depends on the actual business and its goals. However, most companies that have just started or are looking to expand invariably look for investors. There are several websites which help startups and small businesses to look for investors and even contact them. Some of them, such as Seedrs.com, Unbounce and MoolaHoop assist businesses to pitch so that investors can help them with funding. However, there may actually be an easier way than this. Set up a page asking for investment You can set up a page that explicitly asks for investment from funding entities. This page can then be set up in such a way that investors will find all the answers to why they must invest in your business. After setting up the page, you will have to market it to the right target audience so that the message reaches, amplifying your chances at getting investment. It is not an easy thing to do but it certainly is helpful and immensely effective. In this article, let us take a look at how you can optimize your own website to seek investment. Build a great page When you are setting up a page to attract investors, it should look respectable enough to attract investment. This means, the page should be well designed, free from clutter and should be as direct as possible. Try to reduce design as much as possible and focus on quality content that will attract investors. State why your business needs investment and how investors will benefit from it. Market the page well Once you are done building the page, you will need to market it to the right target audience. This means, your website should be circulated among circles that are known to invest in fledging companies. You may also seek the help of firms that assist in attracting investors. With a dedicated page for attracting investors, you will be at a greater chance of attracting investors, especially with professional assistance. Optimize content to attract investment Make sure that all the content that goes on the page is optimized to attract investment. If something is not showing you favorably, that does not deserve to be on the page. Hire professional writers and editors who are trained to write marketing copy. You are marketing your own business or yourself so that investors can find something of interest and conviction. Learning from the experience Today, a number of companies are looking at external funding and investment for them to keep going. One way is to seek to crowdsource or use one of the many websites to find investors. Another way is to actually build a web page that will attract investors. Firstly, you will need to build a well-designed page that is dedicated for possible investors. Second, you will need to market this page very well. Third, you will need to publish excellent content so that your business goals, aspirations, reasons for funding etc are known without any hitch.

When companies are started or envisioned, they have an almost missionary-style zeal to them. Company founders often believe their ideas are revolutionary and that they can change the world. However, after a few years, it becomes evident that a company requires a lot more than what was initially envisioned. In fact, many original missions and objectives may no longer be relevant to a company’s future success. This is when founders or head of the organizations should start thinking about transforming companies that they built with love. Is it time to transform? If you have a company and you are feeling stagnated, it is probably time to make certain changes, both structurally and ideologically, within your company. Let us try to understand how changes can help you to grow as a company and fulfill both societal and business goals. After all, the old adage ‘change or perish’ still holds good today, even if it is a cliché that everyone says these days. When we look at how we can change a company, it opens doors to previously unrecognized opportunities and doors, which will lead to a scaling and future-proofing. Making changes within a company is thus very crucial to its very existence. Fighting resistance and plunging into transformation There is usually a lot of psychological and organizational resistance to change. People do not like changes and if we are to change something that we created ourselves, sentimentality comes to play and may cause you to view your organization through a distorted lens. However, if you stepped aside and looked at your company from an outsider’s objectivity, you will realize that many of your previous objectives and mission statements are no longer valid or relevant. This is when you need to start thinking about transforming your company. There are many ways in which you can bring in transformation. Technology Culture Products and Services Structural Changes Servicing different markets To bring in these changes, decisions should not be arbitrary. You need to consult people you trust and sometimes, people you don’t necessarily trust. Once you have different views and opinions, take your time to list the pros and cons of different transformations. Look at your own company’s state objectively and do not be afraid to shake things up right from the base. Sometimes, transforming requires courage and a readiness to let go of things you love. We grow accustomed to older practices and ideas and find newer ones downright intimidating. Yet, if we do not accept transformation, we tend to remain stagnant or worse, be buried under the embers and ashes of time. Make changes whilst you still can If you really wish to grow as a company, it is probably time to make changes and bring in the transformation to the company you nurtured all these years. Let us just put it this way as our children grow older, their requirements change. We do not hold on to their older clothes and toys. We purchase newer ones, make changes to living spaces and if required, change schools or colleges. Likewise, think of your company as your child, and do not be afraid to bring transformations!