Monthly Archives: May 2017

The Complete Business Innovation

The Complete Business Innovation

Good ideas may surface from the farthest reaches of the organization. Thus, the challenge for top executives is to stimulate experiments across the entire organization, select the most promising of the lot, and disseminate them quickly and appropriately throughout the business.

We are living in a time when information and technology has given rise to abundance, so the competition in supply market is growing at a steady pace. Good ideas, in times like these, need to be nurtured and applied as efficiently and effectively as possible, in order to reap economic benefits.

Overview
Early research on innovation tended to address the organization’s ability to respond and adapt to external and/or internal changes (Burns and Stalker) (Hull and Hage). Subsequent work on innovation stressed more on proactive innovation and distinguished between the types of innovation. There are three types of innovation (process, product/service, and strategy), each of which can vary from incremental to radical and from sustaining to discontinuous.

Emphasis was on the organization’s ability to promote both process and product innovation, regardless of an immediate need for change (Kanter).

Innovation vs. Invention
Joseph Schumpeter defines innovation as the combination and creative application of existing and new knowledge of elements to improve existing and/or develop new products and services, production processes, organization-methods, and commercialization, in order to create or preserve added value.

The Oxford English Dictionary defines innovation as ‘making changes to something established’. Invention is the act of ‘coming upon or finding discovery’. It is important that we do not mix innovation with invention.

Business Innovation
Innovation is generated at individual, organizational, and environmental levels. Let’s look at various types of innovation.

1. Innovate Market or Innovation from Market (Consumer)
2. Innovate Industry or Innovation from Industry (Competitor)
3. Innovate Product or Innovation from Product / Process (Operations)
4. Innovate Team/Organization or Innovation from Team/Organization (Management)

Innovation from Market
“A business has only two basic functions marketing and innovation”, says Peter Drucker. However, Robert Tucker suggests five necessary steps to make a business innovative.

1. Innovation must be approached as a discipline, practiced and taught to employees.
2. It must be cross-functional, and not just left to the R&D department.
3. It must be proactive, and not just responsive to what competitors are doing.
4. It must involve everyone in the organization and everyone’s performance evaluation should include it.
5. It must be customer-centered.

First, second, and forth steps belong to innovation from organization. Third and fifth belong to innovation from market. Market surveys and research enable an organization to be innovative.

Innovation from Organization
Jim Biolos in Harvard Management Update offers the following six steps that need to be followed while making a team innovative:

1. Make sure that the members of the group are communicating with one another in a free-flowing or maybe even a freewheeling way.
2. Make sure that all the team members have equal and enough responsibility.
3. Show confidence in the team.
4. Provide the appropriate resources to the team, and make sure the members know that those resources are available.
5. Make sure that each team member has a challenging role in the work.
6. Monitor the pressure.

Team’s Success
A team usually consists of up to ten people, who devote about one-quarter of their time to the project for three to four months. Participating in a team is considered a plum assignment, because it provides exposure to top executives.

Employees of China’s multinational electronics company Haier, for example, discovered by visiting rural customers, that they frequently used their washing machines not only to wash clothes, but also to clean vegetables. Taking this new information and the potential market into consideration, Haier made a few modifications to its machine, and was able to make it versatile enough to wash both clothes and vegetables. This helped Haier become the market leader in rural areas of its home country.

Innovation from Management
“Managers don’t simply copy something they see elsewhere. They take pieces of practice or technology that they find and recombine them in novel ways to solve customer problems”, says Philippe Pommez, Natura’s R&D Director, “The hard part is not finding the new technology; it is knowing what you are looking for. This is where our conceptualization of new products and new lines that serve local needs becomes indispensable.”

Managers of companies situated in developing countries, sometimes despair of closing the gap with larger and better-funded multinationals. Clearly, there is hope for companies anywhere in the world to win through innovation and creativity.

Innovation from Industry
There are three important fundamentals of innovation and entrepreneurship.

First, an Industrialist searches for innovative opportunities and develops an innovative idea into a practical business or a service. Second is the industrial strategy that brings innovation successfully to the market. Third is free enterprise itself, and it focuses on the organization that is the carrier of innovation.

Innovation in Products
Switching to a new market with the same product can be considered innovative to some extent.

However, innovation in products is always the basic goal of any team, within an organization. Views of the customers through research and surveys are carry forwarded to the R&D team for further product innovation. Ultimately, it depends on how good you are at learning from the market, industry, and your team. Johnson & Johnson, the American multinational corporation, is a great example of constant and successful innovation in its products.

Planning for Starting a Home Based Business

Planning for Starting a Home Based Business

A home based business needs to have a proper plan in place for it to be successful. Working from home is a wonderful option for those of us who cannot, for whatever reason, go to an office for work. Several employment options exist for such entrepreneurs. However, to take advantage of the offers, you need to be well planned and organized.

Step One

First things first, you need to know in which area you want to provide work. For that you need to examine your skill sets and qualifications. That should give you a fair idea of which service you are able to provide.

Step Two

Even at home, you should have a dedicated work area where you can work peacefully. Finding such an area is the key, especially if you are staying at home because of kids or some other responsibilities. You need to find a time and place, where you would not be disturbed or distracted. You can then fix the number of hours, that you can devote to your work based on these factors. Your earnings would therefore depend on the number of hours you can spend working, and how fast you can do your work within these restraints.

Step Three

The next thing you need to have is a business plan. An ideal plan will outline the above mentioned factors in clear cut terms. An analysis of cost and market factors, will determine your cost per hour. You can thus calculate your projected income based on the number of hours you work.

Step Four

Once you have a plan in place, you need to apply for the necessary licenses and registrations. Check with your local government for the required formalities. It pays to have the paperwork in order, so as to avoid legal complications at a later date.

Step Five

The next step is, obviously, getting the work. If your work is internet based, then you need to look for websites where you can get such work. There are several wonderful websites where you can get such work on the Internet. However, if your work is not Internet based, then you need to generate work from other sources. Place an Ad in the local newspapers. Throw a launch party for all your friends and family, and put the word out there.

Going Further

Let the work come to you. Once you get the work, do it well, so that your clients remember you. Don’t forget to discuss payment terms before the work is done, so that there are no misunderstandings later. Word of mouth publicity only works, if you work well and deliver on time. As for publicizing your work via other media: you need to keep on doing it all the time, so as to generate constant work.

How to Write an Exit Strategy for Your Business

How to Write an Exit Strategy for Your Business

Exit strategy should be planned, keeping in mind the long and short-term objectives of the company owner. It should be considered and developed right from the beginning, once you have finalized with your long-term and short-term goals. Keeping the expectations according to your business, and planning the strategy will be helpful. Before you plan the exit strategy, it is required to concentrate on strategic planning, organizational planning, and financial planning of the company. The three important questions which you must address to yourself about your business before writing the plan are: to whom, by when, and for how much.

Writing the Exit Strategy

Choose the Best Exit Strategy for your Business

Selling the business to a family member.
Selling the business to other company, which is usually larger than yours (acquisition and merger).
Selling the business to Employee Stock Ownership Plan (ESOP), in which the stocks of the company is sold to the employees of the company itself.
Initial Public offering (IPO) is a risky strategy in which the stocks of the company are sold to the public. The investors need to take a risk because the traders get in (buy stocks) and out (sell stocks) and may cause a financial swing.

If none of the plan works out, the business owner may have to resort to liquidation.

Write Down the Questionnaire Document

How much investable assets should I have in my account?
What would be the tax impact on the amount that I would receive after I quit?
What are the legal agreements that I should sign before I complete the disposal?
Does my business have the required opportunities and value from the view of the buyer?
How can I clear my debts, successfully?

Financing your Business

Choosing the source of capital is very important, as it will directly influence your decision to exit. The objective of choosing your financing is not only about increasing the funds, but it also concerns the cost of both money and relationships, if you are borrowing the money from your family or friends.

Dealing with the Taxing and Other Legal Issues

Discuss the legal and tax related issues with an experienced corporate attorney and other business accounting professionals. Some of the legal and tax issues that you must discuss with your advisors are listed below:

Legal Issues

Liability of Owners, officers and directors
State and federal security laws
Rights of minority owners
Cost of transfer of ownership
Buy-sell agreements with shareholders and partners

Tax Issues

Capital gains upon transfer or sale of the business
Corporate and personal taxes
Properties owned
Reasonable compensation limits
Retirement plans
Income tax
Capital Gains Tax (CGT) tax

Actions that Should be Implemented Before Exiting

Begin the planning and the implementations, once you have set the timeline. Implement the following actions before finalizing the agreements and the complete disposal.

Train the new managers.
Start your debt reduction program.
Update your business plan.
Dispose the loss-making subsidiaries and surplus machinery.
Approach venture capital backing for MBO (Management Buyouts).
Discuss the propositions with the concerned bank management.
Appoint lead adviser.
Conduct environmental audit.
Reduce the stock levels of your company.
Review personal financial positions.
Undertake mock due diligence.
Most importantly, plan the activities to get engaged after your exit from the business.

Planning out your strategy at the last minute will never be helpful, because, all the factors required for your successful exit will not fall in line. Also, finding out a buyer in a short period and disposing the assets quickly will not fetch you the desired profits. So, planning ahead is necessary.

Newspaper Advertising Tips

Newspaper Advertising Tips
The business world has become very competitive these days and every company is trying its level best to increase its market share. However, only those people who can effectively reach out to their customers can win this race. Advertising is one of the best tools to reach millions of people and present the quality and utility of your product.

Though Internet, television, and radio advertising have emerged as the most popular forms of advertising in this modern era, you cannot ignore the importance and utility of newspaper advertising. This is for the simple reason that print ads are read by many people because of the large circulation.

The following tips for newspaper advertisement can help you to avoid some common mistakes and gain maximum benefit from your advertising opportunity.

Tips for Newspaper Advertising

Choose the Most Popular Newspaper
While placing an ad, you must be aware of how popular the newspaper is. The more the readers, more will be the inquiries you get and consequently, more clients. Though popular newspapers will have higher ad rates, it is advisable to go with them if you want a wide reach.

Get the Wording Right
The wording of the advertisement is very important as it will attract people to the products of your company. It should be simple, easy to understand, and grammatically correct. You can take help from a language expert or copywriter for the same, if you find it difficult to compose the ad wording yourself.

Looks Matter
The overall appearance of the advertisement should also be attractive for the readers. You can have a slightly bigger ad and a colored one with content written in a stylish manner for getting more attention. Of course, such experiments do come at a steep cost, but after all, advertising is all about getting new customers. A picture of your product and its salient features in short can be useful to get the attention you need.

Positioning
Ad position matters. Generally, it is believed that ads on the first few pages and those at the top of the newspaper get better customer attention. So you can position your ad that way and reap rich benefits. There are many columns in newspapers under which the ads are printed. Your ad should be placed in the right category or subhead. For example, if you are providing investment advice, then your ad should appear under a title like ‘Investments and Consulting’. Placing an ad under the wrong or unrelated subhead will lead to a big loss of potential customers.

Take Advantage of Schemes
Advertising can be a very costly affair and for many businesses, it is a substantial chunk of the total expenses. You need to keep your expenses under control to ensure that your profit margins are maintained. Considering the growing competition in the print media market, many newspapers offer attractive schemes for their customers. Sometimes you get discounts. You may also get free ads after paying for a few ads. So, take advantage of these schemes to increase the reach of your business.

Check the Details
The details given in the ad should be correct and to the best of your knowledge. Especially, contact numbers should be double checked, because if you end up giving the wrong number, you will obviously not get any inquiry calls.

Types of Marketing

Types of Marketing

Whether you are starting a company or you are already established in your field of expertise or about to launch a new product, you would always need to market whatever you produce. There is an old saying which says that the worst marketing is no marketing at all. Irrespective of your budget, there are several types of marketing which you can use to make your services known to people. There are some types of marketing like telemarketing and multilevel marketing, which you may opt to use, but the success rates have not been encouraging.

Online Marketing

With the exponential growth of the internet over the last decade, internet marketing has become one of the most popular strategies used by every businessman. Today, most of the people, especially youngsters, search for information over the internet thereby, making it an excellent place to reach a wider audience. Internet marketing is also called online marketing, search engine marketing, web marketing, and e-marketing. Thanks to search engines, today you are able to place ads of your company and products alongside with your competitors at a competitive price.

Affiliate Marketing

Internet affiliate marketing, is one of the most popular online marketing mediums used today. Here, revenue is shared between an online merchant and the owner of a particular website. When a end user signs up for a particular product of an online merchant through a website, the website owner receives a commission from the online merchant.

In the recent past a number of different types of internet marketing strategies have been developed. Video ads which are published online are increasingly being used by corporates. These ads are cheap and easy to shoot and they provide you with such a wide variety of audience that was unimaginable in the past. The price of production are reasonable and it is possible to run a video marketing campaign online at much less cost than the traditional advertising.

Other online strategies are pay-per-click advertising, banner advertising, and email marketing. In pay per click advertising, you need to place your bids on search terms. Once you have done that when the relevant keywords are searched by internet user, your ads would be visible to him.

In banner advertising a graphic advertisement is created and then is placed on applicable websites. This advertisement, when clicked on by the interested internet surfer, directs the customers to the website of the advertiser.

Email marketing uses email addresses to promote new products and offers so that potential customers comes to know the new trends in the market.

Article marketing is another type of online marketing wherein you write an article or get someone to write it on a particular product or services and publish them in web directories. With the kind of reach the internet has the chances of customers knowing about your product is high and as a result you would be more likely to gain more customers.

Marketing Your Products Offline

Even in this digital age the advantages of traditional marketing also called direct marketing can’t be overlooked. By using a combination of offline and online marketing strategies, you can reach a wider audience. There are several people who say that direct mail marketing has passed its use by date. However, it still can be used as a potent force to make people aware that you exist. When we say direct mail it means flyers, brochures and postcards which are sent directly through mail. They usually contain a call-to-action response so that the customers feel compelled to notice your product. When you use direct mail you also have to know the addresses of the people, the geographic location which you want to target and expenses on postage and printing material.

Radio and television are other means which can be used to market your products offline. These are some of the most high profile campaigns and they have the capacity to reach a high number of audience in a very short period of time. The main disadvantages of using these as a medium of marketing is their high cost. However, these mediums are an excellent tool which can be used to create a brand name in the market.

Word-of-mouth Marketing

This is the oldest form of marketing and is still being used today. It is one of the most powerful tools of advertising. If you are able to provide an excellent product or service, a satisfied customer would refer your product to his or her acquaintances and friends. You need to travel the extra mile so as to build a relationship with your customers. As a result customers, if satisfied, would keep coming back and if they refer someone you will be able to get more leads. You can try to give some form of discount coupons or run promotion campaigns for regular customers so that you make them feel special which results in building a loyal customer base.

Advertising in a Print Media

Print marketing means advertising your products in a magazine or newspaper. Advertising in these mediums carry numerous messages; it may either for brand promotion or may be in direct response. The focus may be on a particular set of audience who goes through a particular publication. If you want to target people in Chicago, you need to publish your advertisement in the most popular daily newspapers of Chicago. Due to the strict deadlines of publications, be it newspapers or magazines, make sure to prepare your advertisement well in advance.

Communal Marketing

Communal marketing takes the views of the public and involves them while developing an advertising campaign. The consumers are invited to share and express their ideas on the use of the brand and what it would mean to them by giving their personal stories. This results in what is called ‘consumer generated content’ which is then included into the advertising campaign. At the end, the final result of this collective effort is showcased and other people are invited to share the results. This provides the brand with ways to connect with their core market besides opening new avenues to gain new customers.

Having said this, there may be a feeling that it is similar to word-of-mouth or viral marketing. However, it is not the same as communal marketing aims at achieving a higher level of publicity within highly relevant groups of people.

So, use the above-mentioned types of marketing and marketing tips, and see your product being accepted by a larger audience. However, you need to be patient as you can’t expect overnight results.

Management Styles and Techniques

Management Styles and Techniques

A leader or a manager should be very careful, while choosing the business management styles and techniques for an organization. This is because the success of an organization depends upon the kind of management styles and the management skills which the managers exhibit. Some management styles are people oriented, while others are project or work oriented. Here are the three management styles which are primarily used by the managers in today’s organizations.

Management Styles

Teamwork Style

Here, tasks are accomplished by constituting teams first, and then dividing the tasks among the teams. It is commonly observed that tasks are accomplished more efficiently through teams. That is why most organizations follow this style of management. The different team members bring their knowledge to the table while accomplishing various tasks, and hence, tasks can be done more quickly in teams rather than by individuals on their own. In order to function properly, there should be proper workplace communication between the various team members and also between the manager and the team members. “Team spirit” is a prerequisite for the success of this style of management.

Directing Style

In this style of management, the manager communicates the “goals, expectations, and standards” to the employees very clearly in the beginning itself. The manager is in direct control of the situation literally, i.e., he dictates to the employees what tasks have to be done, how they have to be done, and the deadline for those tasks. The manager has all the decision-making powers and seldom asks the employees for a feedback. This management style is considered slightly impersonal, but sometimes, such situations arise in organizations, such as meeting a deadline or when the number of employees is too huge, that only top-down management approach or directing style of management can bring desired results.

Participatory Style

Participatory style of management is based on the principle of “faith”. Under this style of management, the leadership and management places full faith in the abilities of the employees. The tasks are given directly to the employees and are well-explained to them in advance. Their inputs on the tasks are also given due importance. The employees know how their work is fitting into the organization’s big goals. When their inputs are sought and they are also made aware how important they are to the health of the organization, their motivation levels become very high and they perform better. This style is usually seen in smaller organizations with lesser number of employees.

Management Techniques

Management techniques are those management concepts or strategies, which are followed to run an organization efficiently and profitably. Management techniques, whether pertaining to employees, the customers of the organization or the partners, in case of partnerships, should be chosen only after evaluating the needs of all three. An example of a management technique pertaining to employees is the use of incentives, so as to motivate them, or to provide them with training in order to update their skills. Management techniques pertaining to customers are usually aimed at keeping them happy and satisfied so that they keep on coming back. An example of this, could be the various discount offers that are given to the customers on special occasions, such as Christmas. Whatever management techniques are chosen by organizations, the main thing to consider is that they should fulfill the needs of the organization and also, of the employees, customers and the partners.

According to business experts, the most effective techniques are those that are a mix of all the styles. The management styles that are followed, should depend upon the situation that an organization is facing. In the fast changing business environment, it will neither be practical nor profitable, to stick to only one style. That is why the management gurus, when giving management tips, always insist that only the organizations that evolve their management techniques, according to the ever-changing corporate culture, will survive to see the future.