Posts Tagged ‘Business’
Monday, May 21st, 2012
No mistake about it. You can do MBA anywhere in any school. If you have not done a dissertation as part of your study, there is no point flaunting your MBA to professionals in the field of business. Even if you have done one that cannot stand the rigorous test of academic standards, you would better keep your MBA out of sight from professionals in the field of business and academe.
Today, a plethora of MBA programmes are advertised globally. There is on-line MBA for a fraction of the fee levied by reputed universities. Some institutions offer MBA as a distance learning with or without requirement of a dissertation. Executive MBA is a programme offered for busy executives with duration of 6 to 9 months; such programmes at best require the candidate to file an executive report of some sort. We also spot programmes that award MBA degree after a lapse of 12, 15 or 18 months without insisting on any research paper. More than that, there are printing presses that can give you MBA certificate for a small fee. Such is the status of MBA programme today, it behoves parents and potential candidates do lot of search and thinking before embarking on a MBA programme.
Bet that as it may, having entered an acceptable MBA programme you should tally up the core subjects and electives/optional subjects and then zoom in on the type of dissertation the university or school requires. Some universities allocate 3 course credits or certain number of credit hours for a dissertation. If there are say 15 total course credits required then a dissertation is about 20 % of the entire study duration. As an easy way out, few schools land a single course credit on a dissertation and bring the total course credits to 12 or less. Normally, candidates tend to think about dissertation as an easy go where they can write some muck to pass the hurdle. They would be sorely disappointed. Every university or school applies strict evaluation yard stick in whetting such dissertations. Moreover, when a candidate who has handled dissertation with a kid glove goes out in the market in search of new job, elevation in present employment or placement elsewhere, he gets a slap on his face as he is often asked to furnish an abstract of the research done for his MBA.
A dissertation is defined as a “treatise written by a candidate in partial fulfilment of the requirements for a Master’s Degree in Business Administration, where an argument is presented, described and explained based on the findings of such candidate”. A well written MBA dissertation speaks of the excellence of the MBA programme one followed. Like proof of the pudding in the eating, a dissertation evidences that the author has done his homework well and deserves the degree of MBA. If you are signing up for a MBA programme be determined to do a well-researched dissertation. When you pass out as an MBA the professional and academic community would be in awe of you.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Dissertation, MBA
Posted in Business | No Comments »
Friday, May 18th, 2012
There are two views of business development floating around in the market place. One relates business development as the functional view and as a sub-set of the marketing; other view speaks of it as the organizational growth process. Here are few points in support of both views:
Business Development as Function of Marketing
You come across number of high flyers who don visiting cards broadcasting as business development managers. The trend began with the boom in the IT industry and with dotcom revolution. Even today IT companies have specialised people handling marketing under the job name of business developer. Academic and professional organizations which are forbidden to use the word and title of marketing as a matter of courtesy and ethics open up business development divisions ostensibly to handle the same mundane function of sales and marketing. Hardly have we seen a new venture without a business developer prominent in their HR profile. So we have a situation where business development has been placed under marketing with a stated goal of bringing more business, customers and relationships. A new vocabulary consisting of such jargons and phrases as business pipeline, capture management, competitive intelligence, business leads and probability of winning bedazzles us more than ever.
Business Development as Organizational Growth Process
A macro view of identifying business development with as much new business as organizational wide growth process is slowly gaining currency in business and management literature. This view incorporates the following step-up approach, in defining business development:
1. Business Development brings in new relationship along with added sales growth
2. Existing relationships are milked more in order to improve business prospects
3. Building of strategic alliances is the cornerstone of any business development activity
4. Creating more opportunities for sales must reflect back on the organization whereby new products and processes are introduced to optimize such opportunities
5. Every growth opportunity is identified and analysed so that the optimum one yielding commensurate return for all functions in an organization is selected. Thereafter, proper strategies are formulated with a view to ensure seamless implementation
6. Business Development must aim for incremental rise in market activity that sustains the growth momentum in corporate management, marketing, HR, production/operation as well as in finance
7. Finally, business development must garner long term value by employing internal strengths to capitalize on external opportunities.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Development
Posted in Business | 1 Comment »
Wednesday, May 16th, 2012
In a business there are several functions. Likewise those who man the functions have different style of thinking. There are seven such styles of thinking. Let me explain you each of these styles and to which function it relates:
1. Normal Thinking: This style refers to ordinary mental process encompassing, reasoning, visualizing, analysing, forecasting, journeying, jumping from one frame to another, shifting positions & focus and other activities to arrive at a conclusion. Most office workers, operatives and junior level employees possess normal thinking
2. Logical Thinking: Anchored on reasoning and driven by sense of focus on solving a problem at hand, logical thinking consciously seeks a solution or decision at a given moment. Every variable is subjected to scrutiny in logical thinking. At the same time their thoughts flow in an orderly fashion. There are two strands under this style:
2.1 Critical Thinking: This process involves high degree of analysis and evaluation to prove a point currently under examination. Criminal lawyers tend to display critical thinking strand
2.2 Reflective Thinking: On the other hand, reflective thinking seeks answers for phenomena that happened in the past, while adopting the same methodology of analysis and evaluation to arrive at conclusion. Once a conclusion emerges reflective thinkers apply that to the issue at hand. Civil lawyers tend to display reflective thinking strand
3. Vertical Thinking: This style of thinking moves on a vertical plane, sequentially analysing only known matters that too are selected beforehand. Vertical thinkers are also referred to as direct thinkers as they tend to focus on a matter directly without any sub-routing. More than that, they adjust their position only marginally as they proceed. Compliance, conformity and aversion to flexibility are their hallmarks. This style befits accountants, auditors and officers in finance department
4. Lateral Thinking: Founded by Edward De Bono, lateral thinking is just opposite of vertical thinking; it is alternately known as horizontal thinking or indirect thinking. Flexibility, experimenting are the chief characteristics of lateral thinkers. Striking the right balance between reasoning and creativity, logic and innovativeness is their forte. Lateral thinking generates ideas in quick succession, one of which could be selected in solving issues. Sales and marketing departments are full of lateral thinkers who add value to the business
5. Creative Thinking: Under this style, thoughts are fairly un-organised. Reason and logic are thrown overboard. In its stead there is imagination often running wild. If not corralled creative thinkers can turn to be fantasizers. But we must admit, these guys can move mountain with their ideas; they and their ideas in turn are celebrated. Internet is a lively example of creative thinking. Ideas and pictures come in quick succession to a creative thinker who can fashion a new product or find a new way of using an existing product. Though creative thinking is often spontaneous, it can be egged on by direction and guidance. Brain storming is a good example of the latter method. Departments dealing in design, fashion, lay-out, PR, advertisement, corporate communication are manned by creative thinkers
6. Structured Thinking: In business life, you bump into someone who uses step-by-step approach in handling matters. He goes through methodical system of study, listen, observe, collate, reflect and thereafter make his pronouncements known. Here is a structured thinker, who combines both vertical thinking and horizontal thinking in equal measure but move cautiously and sequentially from unknown to known realm. At a given moment their thinking process involves problem definition, listing of underlying causes, assessing impact, generating alternatives and finally choosing the ones that optimize the interest of a business. Engineers, operation managers and those work in research and development departments are possessed with this style of thinking
7. Conceptual Thinking: As the odd man out of the seven styles of thinking, conceptual thinker is not concerned with facts or pictures, but with concepts. He has the ability to break a complex problem into small workable pieces. He goes on to understand the cause and effect and what must be done to bring normalcy. Afterwards, he builds concepts around the problem quickly and with ease; maps the relationship that lie between each concept, makes useful assumptions, validates the assumptions; fuses the concepts into a framework; arrives at a solution or decision; finally makes his point known in concise and precise manner. A man in his elements, he is the quintessential business developer, corporate strategist and on elevation chairman of a board.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Conceptual Thinking
Posted in Business | 2 Comments »
Monday, May 14th, 2012
Every business undertakes research so that it can take right decisions at the right time. No matter what kind of business you are in, you are expected to find out something out there that impacts running of your business. Here are eight types of business research you will have to do at some stage in your business career:
1. Exploratory: This type of research arises when you are entering into un-chartered area. A pretty good example is when you are asked to explore the possibility of opening a branch of your company abroad. At present you have no research findings with you. Neither you are familiar with the territory. So you begin to work from general point to a specific focus of your company. You have to marshal facts from many sources, collate these and familiarize with the situation there. Thorny issue must be identified and you need to find out every angle of opening a branch in terms of qualitative and quantitative data. Afterwards, you develop hypotheses that can be tested. Sometimes it so happens that you find opening such a branch is just no-go
2. Descriptive: Most business research harp on describing the facts as it is. A good example is to see how your present business location helps in developing your business. You identify variables and rank these in order of their importance in impacting your business growth. You cannot leave a single stone un-turned. After listing every conceivable variable you file up your report. At the risk of repetition, I must state that these variables are known and exist as it is. What differs is your ranking of the facts and/or level of their impact. Since there is no originality involved we often call this research as “Ex Post Facto”
3. Evaluative: This type of research is also known as “ analytical”, due to the fact that you are expected to do lot more analysis. In evaluative research you have full freedom to bring in variables that was not known previously. A doable example is to analyse the present office lay-out in overall efficiency. You still use existing data, but you can bring a new factor to evaluate it. In addition to factors already in use such as convenience, seamless integration, process flow, traffic flow, lighting & ventilation, natural setting, you can also bring in ergonomics and aesthetics to evaluate the office lay-out. In evaluative research you are expected to air constructive criticism of the subject matter so that the management can make considered judgement or informed decision on the basis of your findings
4. Diagnostic: Though sounds more of clinical nature, diagnostic research is often undertaken in business areas to solve chronic issues that remain unsolved for quite some time. One example is employee absenteeism. In this type of research, you are both an insider and outsider. You have to be passionate in solving the issue and at the same time display a sense of neutrality. This is because you are handling sensitive matter of employees and even more discreet matter such as absenteeism. You approach this assignment with open mind and seek to get in-depth knowledge by identifying symptoms, causes and effect. You will distinguish between chaff and grain, symptoms and causes, under-lying reasons and obvious explanations. Your data gathering must be discreet and borders on confidentiality. In most cases you will select a sample from a large group or work on selected employees of a critical department
5. Investigative: A minuscule version of a diagnostic research, this type narrows down the field of inquiry to a specific factor or phenomenon. An apt example is carelessness of an employee that caused a fire in the factory. You are expected to survey the factory, understand the cause, identify the party involved, and file evidence against such an employee. You will assess the cost of damage, obtain explanation from the party concerned, and ascertain the extent of contributory negligence on the part of management. You will conclude with what action to be taken against the party concerned and what steps to be taken to avoid such accidents in future
6. Normative: This is completely different research from the previous ones. Here you study and analyse issues to set norms, standards or parameters. Often these are expressed in quantitative forms. Where qualitative form is selected norms would tend to be general requirements or maxims. Norms can range from broader aspects such as values and characteristics to narrow aspects of eligibility. Setting accounting and auditing standards in a business is a perfect example of a normative research
7. Predictive: This research type is also known as causal research as it sets out to trace the cause and effect of a phenomenon. In business, predictive research can take the form of “If—-When “scenarios. Basically a predictive research indicates the set of results when a particular cause takes place. Predicting such results have nothing to do with soothsaying but anchored on the scientific method of testing a hypothesis. Loosening credit control leading to pile of bad debts is a tested example of predictive research
8. Prescriptive: A prescriptive research is based on designing a specific solution to a known issue. Generally such a known issue emanates from the gap between what is desired and what is currently available. A business researcher embarks on doing this, after examining the relevant data and variables that impact and influence the situation; after critically evaluating the business as a whole; after exhausting all other possibilities of solutions that are found in available literature. Hence, a prescriptive research is the most original in terms of outcome. Designing an organizational system is a fitting example of a prescriptive research.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Research
Posted in Business | No Comments »
Wednesday, May 9th, 2012
Enthusiasm has no limits when it comes to talk about ideas. Oftentimes, you bump across the guy who says to you “Listen, I have an idea”. Depending on the circumstances you are in generating ideas can be quick or time consuming. During an emergency everybody starts thinking and an excellent workable idea pops out. But in the case of family, business, educational pursuits, sports, military ventures and political manoeuvring, creating the right idea is time consuming. There are seven ways in which you can generate successful ideas that work in most of the fields. As a business adviser I give pride of place to generating business ideas:
1. Reflective Thinking: This is the fountain that springs most successful ideas in business, technology and activities that border on the profit motive. In reflective thinking you regurgitate like a cow in the gate, of what you have learned, what you have heard and what you have felt. You marshal these facts of wisdom; re-visit these and make connections between you and the facts gathered. Thereafter, you examine the facts, correct the errors tie the loose-ends and embark on the journey of re-learning. You fuse many limbs of the idea into a cohesive whole and arrive at a business idea that has the potential to be turned into a practical and successful one
2. Studied imagination: I rate this process as the second most important way to generate good business ideas. In this process you enmesh both subjectivity and objective analysis. What you have studied in college, business and family relationship is your objective part which you will weld with imagination that flies out to realm of un-fathomed areas. Icarus saw how birds fly and fitted him with wings made of wax he soared over the sky. For his bad time he came close to the Sun which resulted in the melting of the wings. Consequently, he started to fall. You are not going to repeat this. Instead, you will steer your imagination backed by your objective facts could easily land in a workable business idea
3. Bright Sparks: Unlike studied imagination bright sparks give you an idea all of a sudden. It may be related to the circumstance you are in or something un-related but connected to your circumstance. Archimedes found his theory of floating body after immersing in the water tub. His theory ran thus: any object, wholly or partially immersed in a fluid, is buoyed up by a force equal to the weight of the fluid displaced by the object. This theory has worked wonders in business applications
4. Observing Nature: Newton found his theory of gravity after observing the fall of apple from the tree. Natural phenomenon has objective lessons for you. Scriptures talk about this as a measure of reward or punishment from the God. Naturalists think otherwise. They opine that these phenomena are result of cause and effect which were later tested in science and arts. By observing nature, business persons have fashioned ventures from food to outer space-physics
5. Your Experience: As you agree with me, experience is a better teacher. Your track experience in a chosen career can give you plenty of ideas whose success rate is much higher than the ones your green horn colleague boasts about. A seasoned person with plenty of experience and insight generates quick and workable ideas than MBA graduates because he prefers to err on the side of caution rather than jump head along into a hole of fire
6. Brainstorming: It is not necessary that you should do a brainstorm session in a class room setting to get brilliant ideas. When you meet up with friends, colleagues and family members make it a point to talk about new idea for a business. Allow them to speak their heart out. Never interrupt. Garner points and trends. Now you do your own calculus picking one point here one trend there and bring together to get a raw idea. After refinement and faceting you will end up having a remarkable one. Call it gold mine
7. Recycling Ideas: For want of better expression, I am using the phrase recycling ideas. in fact you are borrowing it lock, stock and barrel. Lest you are accused of plagiarism or indicted for copyright violations you calibrate the idea; tweaking and tinkering. The result can be anything: Improvement, Adaptation or Re-make. Sadly, 90 % of the ideas that float in the market are just re-cycling stuff.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Idea
Posted in Business | 1 Comment »
Wednesday, May 2nd, 2012
In business and in family life you generate ideas as a response to the situations where you are in. There are six situations that compel you to do something. More often than not you come up with an idea to extricate yourself from a situation. Many a successful business idea came to sunlight as response to such situations. Here are the six situations:
1. Need: A need is defined as un-fulfilled part or whole of a desire. If you look for a fat salary and get only a portion your need is un-fulfilled partly. If you do not get a salary at all your whole desire is gone barren. There is slight distinction between need and want. Whereas a need is not fully supported by the means to achieve it, a want has every means that support in getting it over. Yet another point is that need ranges between what is voluntary and what is necessity. A person needs a TV for entertainment and can do without it though. When it comes to food it is vital necessity as he cannot do without it
2. Requirement: Definition of requirement is thus: something expected, demanded or imposed upon as an obligation. On personal basis a requirement can be voluntary and does not speak of strict obligation. When it passes to the realm of inter-personal relationship requirement becomes much stricter and denotes authority, necessity and perhaps norms & standards. For example one can be nude in his room, whereas when he walks on the street he is expected to be decently dressed
3. Problem: A problem is a situation that is harmful or unwelcome implying an impediment to the progress of anything; as a corollary problem mandates that corrective action must be taken. On the same token a problem conveys a gap between what it is and what it should be; what is desired and what you have finally got; for example a city hall meeting is expected to be peaceful; when fracas occurs in between tow antagonists inside the hall it is a definite problem. Insufficiency is something that woven around a problem occurring in every conceivable areas including data, norms, budget, performance and degree of satisfaction
4. Issue: An issue can be a minor one forming a part of the problem or major one engulfing the entire problem. A salutary point is an issue can be sorted out by discussion, explanation, exploration or by consensual talk. Centrality of an issue can impact the problem at hand. For example sending troops abroad is a military manoeuvre where willingness of the uniformed corps to serve elsewhere could turn out to be an issue
5. Question: A matter that demands information, answer confirmation or clarification. Alternatively question means deficiency in terms of knowledge, connectivity, personal conduct etc.
6. Query: A query is a question that is addressed to someone who holds public or private office. It denotes legal or moral compulsion on the part of the receiver of the query and authority and standard on the part of the issuer.
When you are faced with any of the six situations, you have no alternative other than developing an idea to counter it. In doing so you may land with brilliant idea, really.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Idea
Posted in Business | No Comments »
Monday, April 30th, 2012
When you see a business not doing well you have got to find the ways and means of improving it. That is lot of catching up to do. You have to see how the problem arose in the first place; thereafter you have to take the stock of the situation you are in and plan out a solution. Admittedly, many of you have no patience to study and analyse what must be done to take you out of the fire. Furthermore, many of you may not be aware what action is right and what is wrong in the given circumstance. Right actions on your part elicit positive response and lead you to a workable solution; incorrect actions on your part bring in negative response and lead you to disaster. Here are few steps that you must follow in improving your business:
Six Easy Steps
• Find out what is the Problem that impedes your progress in life
• Understand the Nature of the Problem
• Checklist the Causes that led to this Problem
• Find out a Solution yourself, if this Problem is just a minor issue that can be corrected by you alone
• Chart out a Solution after consulting your colleagues and staff, if and when the issue is mildly complex
• Where the problem or issue is fairly complex you call in a Business Adviser to guide you in solving your problem and in improving your business
What you should look for in a Business Adviser?
• He must be neutral, independent and confidential person well versed in business management.
• His advice is designed exclusively for you after considering your problem, your issue and your question against your own background rather than churning out generalized hum-drum advice
• Any solution must be as distinct as the case may be in relation to your business, your industry or segment, your area or region etc.
• The business adviser must assist you in making your business better, meaningful, rewarding and satisfying
• Moreover, he should be able to analyse, understand and evaluate your business along with your personal cosmics
• Finally, he must give you proper direction and guidance to facilitate taking risk and making decisions.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Idea, Cosmics
Posted in Business, Cosmics | 1 Comment »
Tuesday, April 24th, 2012
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. You think your idea is really great. Having mulled it over, you feel that it can be translated into commercial success. But how you do that? It is simple follow the seven stages given here:
1. Write down your business idea in clear and concise English. Improve the draft once again. Check it up to see whether it makes sense to you and to an ordinary reader. Now your spark of imagination is transformed into a concrete idea
2. The second step is to morph your idea into a business concept. A business concept is defined as the result of organized thought of your business idea. It has several limbs structured into a useful form. Let me give an example: you draw few dots vertically or horizontally on a paper. When you link each dots you get a vertical or a horizontal line. In this case, dots are ideas; line is your concept. Typically a business concept has limbs such as profit motive, product as unique value proposition, how the product fits the market needs, how it performs against competition, the cost of product, its revenue generation and finally how it services your overhead and gives you profits. If you have a business concept developed then you will be able to take charge and influence the outcome of your efforts in a business because a well-designed business concept gives you direction, motivation and tenacity.
3. You must test your business concept to ensure whether it is feasible or not. Feasibility must be ascertained as against regulatory environment, economics, environmental issues, marketing parameters, financial viability, technological excellence and social acceptability
4. Once the feasibility is positive then you have to prepare a detailed proposal in the form of a business plan, bringing out details of all the functions of a business organization including corporate management, administration, marketing, production, finance and human resource into a cohesive entity to produce and sell your unique product
5. Guidelines are to be prepared in the next stage where policies and procedures for each department are developed in order to make the business as a going concern. Generally, a budget is drawn for each department and rolled over every year. Segmental plans in product development, market development and human resource development would be detailed. Your investment plan in physical assets and human resources is also dovetailed. Moreover the time and duration of each stage of the business development are also noted
6. Implementing your business plan is the next action step. When you do this invariably you will concentrate on business growth and development along with having safeguards to cover yourself from any eventuality
7. Monitoring progress and adjusting your budget, target, goals along with amending your plan is the seventh and final stage in making your business idea a successful one. As you reach this point you have become mature, experienced and skilled business person. You are ready to take your business to higher levels as you go on.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Concept, Investment
Posted in Business, Investment | 1 Comment »
Monday, April 2nd, 2012
Sri Lanka is a vibrant country located in South Asia, a region that is home to about 1,590 million people living in most populous and most densely populated part of the entire world. In terms of population Sri Lanka ranks about fifth but in terms of doing business it is ranked second in South Asia. As a gateway to South Asia, Sri Lanka offers unique business opportunities to businessmen and investors.
There are seven countries in South Asia: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. The population in Sri Lanka is about 20 million earning an average per capita income of U S $ 2,290/-. Classified as Lower-Middle Income earner, Sri Lanka ranks as the second most business friendly country after Maldives, in the recent annual survey by the World Bank. Titled “Doing Business 2012 Sri Lanka” the annual publication compares data out of all seven countries in the region. The score by Sri Lanka at 89 points bode well when compared with the average Regional score of 117. Besides doing business as a whole has improved from the previous figure of 98 recorded in 2011. The survey deals with the following matters in depth: starting business, construction and property, utility such as electricity, obtaining finance, investment protection, taxation, international trading, commercial contracts etc.
Starting and running a business in this country is not only rewarding to businessmen and investors but most enjoyable to them and to their families. There is an attractive resident scheme for investors to start business and live in the country during the pendency of the business. If by any chance the investors wish to dispose the business, they can continue to reside in the country, unlike in the case of Singapore.
As a gateway to South Asia, Sri Lanka and its main ports in Colombo, Hambanthota and Trincomalee offer the state of the art technology in port management. Air freighting is facilitated via Katunayake and other regional airports. Colombo the capital city is a commercial hub for imports and exports to the entire South Asian region. Businesses can be located either in Free Trade Zones or elsewhere without much difficulty.
Heavy and light industry, construction, education, leisure, pharmaceuticals, plantation, agriculture and farming, entertainment, media, healthcare, fashions are key sectors showing great promise along with financial services including commercial banking, credit, stockbroking, asset management, investment and private banking.
Business Opportunity
Inquiries are welcome from prospective businessmen, buyers, developers and investors who wish to start a new business or buy an existing one. Get a piece of action in Colombo Business Centre that has morphed into a star performer in the region. You can recoup your investment in business within a short horizon depending on the market movements. More than that, you will enjoy doing business here, really.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Finance, Investment
Posted in Business, Finance, Investment | 2 Comments »
Monday, March 26th, 2012
A once in life time opportunity knocks on your door in the form of a prime land that can be developed as Ecotourism Rest or Eco Lodge in the scenic town of Maho in North-West Sri Lanka.
This prime real estate spawns an area about 19.86 Hectares (about 49.7 Acres). It is situated at Hevanala Yaya, Thalangedara, Maho in Kurunegala District of North-Western Province of Sri Lanka. It borders Nikaweratiya – Madagala Road with a road frontage of around 900 meters. Trains operated by Ceylon Government Railway saunter in the southern edge of the land traversing towards Trincomalee and Batticaloa, towns that are located in the Eastern sea shore. In fact this land is in between two railway stations: one is Maho and the other is Yapahuwa.
The historic city of Yapahuwa was once the capital of Sri Lanka during the 13 Century. Tourists flock to the city in their thousands to view the olden city and centres of tourist attraction such as Kikawala Rock Cave Temple that displays evidence of amazing volcanic rock formations. You can easily access the land travelling from Colombo, Capital of Sri Lanka over fully carpeted road that reaches the land and far beyond. From Colombo you travel 160 km to this picturesque land.
The land is endowed with varieties of well grown fruit trees such as coconut, mango, cashew, wood apple, banana and many others. Moreover it is forested with about 650 teak trees of about 6 years old planted along the boundaries. A meandering and beautiful landscape connects you to rock formations, scrub jungle and a cosy environment of lush greenery. Ground water is available throughout the year in three large ponds that collect rain water. Additionally, two large agro wells provide irrigational water during summer and two wells sprinkle drinking water throughout the year. Existing building structures include a two-bedroom bungalow, two small houses, an office as well as a guard room. There is a weigh bridge currently not in use but serviceable.
Ecotourism
Surrounded by tropical greenery, this property has potential to be developed as an iconic Eco-friendly Tourist Rest or Eco Lodge. One of the norms of Ecotourism stipulated by “The Ecotourism Society” is that places under Ecotourism banner must conserve the environment and at the same time must improve the welfare of the people living in and around the area. This land definitely passes the test of “conserve and improve” concept and qualifies as a prime spot for development as Ecotourism Rest or Eco Lodge. Finance for Ecotourism is generally granted by local and international banks.
Business Opportunity
1. A prospective investor has to buy this land in the first place and thereafter, set in motion a chosen Ecotourism Rest or Eco Lodge construction programme
2. A prospective buyer can buy this land and hold it as an investment asset before re-selling it to any prospective developer bent on these lines.
Inquiries are welcome from prospective buyers, investors or Ecotourism property developers for a price quote. Get a piece of action in buying this plot of land in Maho , North-Western Province of Sri Lanka and experience the real pleasure of being part of ecology.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Ecotourism, Finance, Investment, Real Estate
Posted in Business, Finance, Investment, Real Estate | 1 Comment »
Wednesday, March 21st, 2012
A large plot of land is available in Nallur, Jaffna for property development. This plot of land can be converted into a mixed development consisting of residential apartments, theme park, offices and shops.
This land is of almost rectangular shape with an extent of 3,687 square meters. In Jaffna parlance the extent is stated as 14.35 Parappu. Located in the Point Pedro Road , the land can be easily accessed travelling from Nallur Kandasamy Kovil towards Point Pedro. Passing Sankilian Road Junction the plot of land is for your view on your right side. The entire length of the land is abutting the Jaffna – Point Pedro Road. Originally this land was part of Sankilithoppu. Nowadays it is referred to as Pandarathottam due to the fact that it faces Pandarakulam across the road.
Business Opportunity
1. A prospective investor has to buy this land in the first place and thereafter, set in motion a chosen development programme. Most banks are willing to finance such real estate development
2. A prospective buyer can buy this land and hold it as an investment asset before re-selling it to any prospective property developer later on.
Inquiries are welcome from prospective buyers, investors or property developers for a price quote. Get a piece of action in buying this plot of land in Jaffna which is poised to experience large scale economic and infra-structure development in the near future.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Finance, Investment
Posted in Business, Finance, Investment | 2 Comments »
Thursday, March 15th, 2012
Huge potential for private banking cannot be dismissed in Colombo, Sri Lanka. Accumulation of wealth in the hands of the top echelon has given added fillip for the need of specialised services such as private banking.
Private banking deals with financial advice and management of money, investment and assets belonging to high net worth clients (HNTC). These clients may be wealthy individuals or big corporates. In the case of individuals private banking plays purely the role of wealth manager. A private banker to a HNTC provides advisory and management of wealth including trust services. These trust services include wills and inheritance, pensions, taxation, and advising and managing of charity and donations. Corporates, on the other hand do not require these services as they have departments within their corporate office to deal with these discreet matters. Both individuals and corporates look for common private banking services including money management, investment management and asset management along with financial advisory. They also seek estate management dealing with management of lands and real estate, custodial services dealing with scripts and bonds and funds transmission domestically or as cross border facility. Few customers might require emergency or bridging finance on fully secured basis. Some of the large private bankers such as Coutts of UK and Northern Trust Corporation of USA provide every conceivable service under the banner of private banking.
Private banking thrives in countries that have financial centres, commercial hubs and industrial zones. Moreover, private banking is in demand where accumulation of capital is so much skewed that only a minor percentage of population possesses immense wealth.
Colombo as financial centre of Sri Lanka is fast becoming a business, financial, commercial and industrial centre. Almost all the HNTCs have offices or residences within the municipal limits of Colombo.
Business Opportunity
1. Existing private bankers can open a branch or window in Colombo to share in the growth momentum taking place
2. Corporates or wealthy individuals can team up to establish a new private banking office in Colombo to get plum and juicy clients, who are wealth boomers but hitherto not exposed to sophistications of private banking but are willing to be on board nonetheless
Inquiries are welcome from prospective bankers, corporates or wealthy individuals who wish to either open a branch/window or form a brand new private banking office. Get a piece of action in private banking in Colombo Financial Centre.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Opportunity, Finance, Investment, Private Banking
Posted in Business, Business Opportunity, Finance, Investment | 2 Comments »
Tuesday, March 13th, 2012
Asset Management is a thriving business in Colombo Financial Centre. You can invest in the equity capital of an asset management company without much hassle. Your investment can be recouped within a short horizon.
There are 18 asset management companies registered with the Securities Exchange Commission of Sri Lanka (SEC). These companies are broadly grouped under Market Intermediaries and named as “Investment Companies”. These companies are permitted to handle investment management, investment advisory and associated activities. Investment management is where the company manages client funds on a discretionary basis. The asset manager makes up his own decisions in investing in stocks and bonds in accordance with an agreed investment strategy but without reference to the client. Investment advisory on the other hand enjoins non-discretionary management where the asset manager is permitted to advise his client and on consent being received he can invest in the recommended stocks and bonds.
All these asset management companies have two types of funds: One relates to own capital funds contributed by the owners by way of equity. Another much large pool of funds relate to the clients’ money which is also referred to as portfolio management be it discretionary or non-discretionary. Generally the percentage of own funds ranges between 5 to 10 % of the invested funds. Portfolio funds form the bulk of invested funds. The 18 asset management companies manage close upon one Billion U S $ in their portfolio funds.
These companies take the worry of financial affairs out of the clients unto themselves. They use professional skills in managing funds belonging to clients, who may be individuals or institutions, big or small, domestic or foreign. They manage a wide ranging portfolio of investments, in equities, fixed income or convertibles (debt that can be converted into equity). They tend to analyze investment needs of clients and structure a portfolio strategy that translates into a perfect match for clients risk/return profile. For example, in the case of a risk-averse client, the portfolio will have more fixed income: i.e. Treasury Bills and Treasury Bonds while for a risk-taking client more weight will be given to high growth equities. It must be emphasized that the investment strategy is formulated by asset manager only after consultation with clients and after obtaining their agreement to this effect. Investments made by asset manager would be in accordance with the agreed strategy and none else.
Business Opportunity
1. You can invest in the equity capital of existing asset management companies
2. You can also obtain approval as asset management company from the SEC; for this purpose you can use companies that are already floated but await capitalization from you
Inquiries are welcome from prospective investors who wish to have a piece of action in Colombo Financial Centre a star performer in the region. You can recoup your investment in equity capital of asset management companies within a short horizon depending on the market movements.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Finance, Investment
Posted in Business, Finance, Investment | 2 Comments »
Friday, March 9th, 2012
When a seller quotes a price for his business it is known as “Ask price”. In response a buyer offers his price; this is known as “Bid Price”. After negotiation both parties agree at a price to close the deal. In order to make a bid price a buyer must do a valuation of the business he is interested in. There are six methods of valuing a business before buying it:
1. Asset Value: This is the easiest method in valuing a business. Underlying assumption in this method is that the business is a going concern. You tally all assets tangible and intangibles, fixed and current to get the total value. In the case of fixed assets either you can take the value net of associated depreciation or on replacement value basis. Current assets are appraised generally on realizable amount basis. Intangibles such as goodwill can be re-estimated. From the total assets value you must deduct outside liabilities to arrive at net value of assets in a business. Although the method is a popular one, it lacks credence as it does not take the capacity of the assets to generate income in the future, which is more meaningful to the buyer than just jotting up assets. Moreover, small businesses as well as service providers are very lean on assets but fat on earnings. Hence, asset value may not be representative for these businesses. On the other side of the coin, large scale industry is asset rich but whether they generate adequate returns on assets employed is a moot point
2. Liquidation Value: In contrast to the asset value which is based on going concern, liquidation value takes the business on the footing that it is a gone concern. Liquidation can take place in two ways: orderly or forced. An orderly liquidation takes time and the value cannot be estimated in a brush stroke. Forced sale can take place in near term and it is possible to tug in on likely price. Whichever the manner of disposal, you should ensure that the assets are valued at realizable value net of any expenses connected thereto
3. Earnings Multiple: Since buyers are more concerned with what they can get from using assets, earnings multiple as a method of valuation is used widely in business buying transactions. Generally after tax earnings is considered as the bench mark figure in this type of valuation. You take 3 to 4 years of after tax revenue and average it. Thereafter, you can multiply the figure with number of years purchase. If the average after tax earnings is US$ 100,000/- and the multiple you are conceding is 6 times then the bid price is parked at US@ 600,000/- Earnings multiple method suits well in retailing, wholesaling and medium to large businesses. It is important that you use earnings multiple where the existing business is low geared, that is, it does not use much of borrowed funds. Additionally, you must ensure that depreciation charge in the business is not heavily loaded. A litmus test to opt for this method is to compare the cash-flow with earnings-flow. If there is no substantial difference between these you can choose earnings multiple; otherwise select capitalizing cash-flow method discussed below
4. Capitalizing Cash-flow: Cash-flow is different from earnings in that it ignores accrual accounting concept and non-cash expenditure. It pitches straight on rendering of inflow, outflow and the resulting net flow. Your net cash-flow is what remains in your hands when everything was said and done. There are two ways of arriving at cash-flow for valuation purposes:
4.1. Net-flow + Depreciation
4.2 Net-flow + Interest + Tax + Depreciation (Alternatively known as “EBIT+D” which means Earnings before interest, tax and depreciation)
Once you arrive at a figure under any of the above two methods, you can capitalize cash-flow by using a capitalization ratio chosen by you. Let us assume that, the cash-flow is US $ 150,000/- capitalization rate is 20 % then you can work out the business value as:
US $ 150,000 divide by 20 and multiply by 100 equal to US $ 750,000/-
5. Market Value: Alternatively known as Rule of Thumb or Comparable Business, this method focuses on the market and how it responds to the value proposition of a particular business. You can determine market value in a number of ways. One way is to find out the sum in which similar business was sold and take that as the market value. Another method is to search in the business press for similar transaction that took place during the last 3 months. Yet another method is to estimate the amount the market can bear and after making suitable adjustments treat that as bid price
6. Cosmic Value: At the end of the day, what matters to you most, is the cosmic valuation of the business you intend to buy. Every business has cosmics surrounding it. You have to evaluate the business, its assets, its name, its logo, its customers and its process to arrive at its cosmic valuation. Afterwards you must assess whether incoming business with associated cosmics would enhance your wellbeing or retard it. Many decisions made without considering the critical role of cosmics end in bad note. Why should you have a millstone round your neck?
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmic Value, Cosmics, Finance, Investment
Posted in Business, Cosmics, Finance, Investment | No Comments »
Wednesday, March 7th, 2012
Imagine you are meeting a seller of business today, what is the first question you will ask him. Oh yes, “what is the price” is the one you on your lips even before you settle down for a talk. This puts the seller in straitjacket, resulting in bad cosmics between you and him. Sellers are miffed over why buyers do not ask a whole heap of questions about his business and how he is going about. Here is my checklist of questions buyer must ask seller of business and in that order.
1. How the market operates? Get the broad picture initially by learning about the market place of the business, how its product is facing up competition. Get the competitor profile, growth rate in the market and whether the business is beating the market or just following it. You can also find out latest market trends
2. Who are customers & suppliers? Ask the buyer to talk about his customers and suppliers. Some of them may be known to you. It is better to dwell little more time here not least because you want lot of names but to assess how critical they are, in terms of volume and value. Also you must ask buyer about credit terms offered and obtained. Will these terms continue to be in force once the business change hands is yet another clarification you need
3. Who is the staff? Number of staff, the gross emoluments and their experience should engage your attention. Key members and how important they are is also a relevant question. Will the staff be happy to get a new owner? Ostensibly, their cooperation is vital for the sale and transition to new owner. Staff is, in essence, in every business which is of course not saying a lot
4. What is the Bottom line? By now you have got a feel of the business. But one caution: do not fall in love with the business on first sight. Ask seller to trot out numbers in profit and cash flow. Look at the profit; look more on the cash generation. When buyer gives you copies of last 3 years financials pore your eyes over the bottom line
5. External relationship: You can chat with him in ease on the question of his relationship with bankers, revenue and other government departments. There is, as must be expected, marked reluctance on the part of seller to talk about these. Still you must be very diplomatic and see whether any of the relationship is strained
6. What he is selling? Let us be very clear about what he is, in fact selling. You are passing half-way mark now and you get him to tell what is up for sale and what is not. Generally a sale of business involves name, operational assets, working capital, and human resource and so on. You must be clear whether present loan outstanding is to be transferred to you or the seller would extinguish it. Another moot point is the real estate, which may or may not be transferred. In case of lease property, you have to ask him whether it is a transferable one. If the business is located in a supermarket, you should ask about the transfer of legal right to you. In sum, you have to clear legal and administrative issues before you proceed further
7. Prospects after you buy: This is putting the seller in your shoes. After you buy his business what happens to it. How sales, operations, profit, finance will be played out? How quickly you will go through the learning curve in running the business. How this downtime can be minimized? In as much as you love to get answers to these questions about your running business, seller would tend to be reticent and if egged he would be very brief. You must watch his reaction sharply for any nuances that indicate the business is made only for him and after him it is deluge. In other words you are made a sucker, really
8. Will seller be on board? After the sale is done will he continue to be in the board for a limited period is a follow-up question? At the prompt of any negative answer from him you must conclude your discussion and walk out. A seller must be responsible for what he has vouched all these times and in turn assure you his support. He has to introduce you to staff and outsiders; he has to guide and counsel you. If he is going to vanish on the following day you would better drop this matter
9. Will seller arrange part-finance of the sale price? This is where seller’s external relationship especially with bankers matters. If the seller is an acceptable person he would be able to arrange part-finance of sale consideration through his own bankers or perhaps financiers known to him
10. Why he is selling? If everything is neat and fine, why the guy is selling his business. Most sellers will cite that they are retiring. Some like to take a long vacation or move out to another state or country. Chronic illness or health issues could be a reason. Sometimes they are selling to settle their children or fulfil a divorce settlement. If the seller is vague in answering this question it must put you on guard
11. What is the price? Instead of wrangling price at the first blush, you ask it as the penultimate question. Definitely his price has padding: he must have added lot of goodwill. Most sellers are too emotionally attached to the business they want a hefty price. Or perhaps this is the only cash earner for him. Whatever the reason behind him inflating the ask price, you must keep your powder dry. Do not say bluntly that the price is too much. Ask him how far he is ready to negotiate so that a matter can be closed in due course
12. How do we take it forward? Never leave the seller without getting his idea about how you and seller take the matter further. He would have his suggestions; listen to these and speak your mind loud. Do not leave with a bland “will let you know”. Go positive and say “let us proceed together”.
The above checklist reflects cosmic arrangement of twelve questions that elicit the right response on which you can make sound decision on buying a business.
Good luck!
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Finance, Investment
Posted in Business, Cosmics, Finance, Investment | 2 Comments »
Monday, March 5th, 2012
Business confidence reflects the combined idea of the consumers and producers at a given time. Sometimes referred to as business sentiments it could move upward, downward or remain same. Generally we trace sentiments from one point of time to another. A positive upward spiral of business confidence with seasonal correction is always welcome. When business sentiments dip in downward spiral it is a definite cause for worry to business. Let me give you a step-by-step guide how to restore business confidence during such an eventuality:
1. Survey: Firstly, you survey confidence of the economy follow with an assessment of your industry and then finish with what you feel about your own business. Sentiments in economy may be down; your industry confidence may be mutes; still you may feel that your business can weather the storm
2. Bring Pressure: Talk to your industry association and urge them to take necessary steps in industry wide and coerce them to take up the matter with the government to do appropriate policy measures such as effecting tax cuts, enhancing public spending, adjusting interest rate mechanism and relaxing credit regulations
3. Do Internal Self-test: A review of business policies currently in force is the starting point for the internal self- examination. Business policy is all pervading term covering operations, marketing, human resource management etc. While doing this self-test you must see whether you need a structural change internally or just make few cosmetic changes. A complete revamp of a product is a structural change; giving a bit of face-lift in packaging is a cosmetic one.
4. Get External Feedback: Ask your customers. Your customer feedback tells you more about your business than what you already know. You can do a sit-in chat with your main customers who have reduced purchases and a telephone survey with others who have dropped out or buy marginally
5. Readying New Blue-print: Once you have completed both internal and external appraisal you can make a comprehensive survival kit to stay afloat during the do0wnward spiral of business sentiments and then to shore-up confidence levels higher. In this process you have to do touch-up on cost-cutting, hiring employees, investing and finally marketing
6. Review Cost-Cutting: Faced with a scenario of falling sentiments business gives a knee jerk reaction by cutting cost across the board. Most pronounced cut-back is seen in the operational area. You know cutting cost is a two way knife; it can reduce losses and at the same time it shuns business growth. You should use a selective cost cutting if at all one is needed
7. Hiring more than Firing: I know a company which is 180 years old that recruited maintenance staff during high tide of recession. While others were laced with anxiety started firing employees, the company showed glint of steel. Before long the company reaped its dividends with loyal staff and a fat profit. Undoubtedly, the company beat the downing sentiments with bold measures.
8. Invest more: Never think any depression is a prolonged affair. If you stand and wait for good times you will lose the opportunity to break-out. Throw that going in goosestep with your colleagues in the industry. Develop a good grasp of the ground and start investing selectively in operational assets that could turn the corner in quick time.
9. Do Re-marketing: Take measures to set your marketing in sprite. Re-define the customer base, expand where necessary and constrain where needed. Your new look product might have undergone a revamp or facelift as the case may be. By the look of it you know your product is a winner even in the difficult times
10. Network: Nothing works without network. Engage in full time business networking. Meet up industry colleagues, customers, supply creditors, press, and advertisement guys and add spice to the mix by getting your staff to personal promotion of your product and business
11. Bring in Cosmics: Finally, understand and evaluate your own cosmics. Your sentiments, feelings, your ideas are all shaped and influenced by cosmics that reside within you, perhaps un-known to you. Sooner rather than later you will realize the power of cosmics in restoring your own confidence. In turn, you would have contributed your mite in restoring business confidence in the country, really.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Confidence, Cosmics, Finance, Investment
Posted in Business, Cosmics, Finance, Investment | No Comments »
Monday, February 27th, 2012
Spiralling debt brings disappointment, despondency and depression to debtors who never controlled their lives let alone their finance. On the throes of depression is the red line. If depression is not managed, then it leads to fatal consequence. Here is the maxim: If you are in debt, avoid depression.
Debt burden has escalated in the last decade to phenomenal levels, unduly aided by advertisements by credit card issuers and personal finance providers, consumers ratcheted up the borrowings. When the crash came it not only dragged the borrowers low but pulled down the debt providers. Against the backdrop of teetering economy corporates corked off new hiring or at worst began retrench existing staff. Falling income on one side and loss of employment on the other side have trammelled consumers. Business persons are not spared either. They saw to their horror their order book trouncing downwards. Worst affected are the micro and small businesses. Like fall of dominoes, businessmen, consumers and borrowers were stumbled with disappointment, frustration and despondency. Unchecked it ended up in depression. Suicidal tendency was raising its head.
Depression leading to death
Depression as a cause of suicide is now firmly established. During the recession period 2007 to 2009 more than nine countries reported increased rates of suicide due mainly to financial woes. Feeling the sting more, was Greece that recorded a whopping 16% jump in the suicide rate. Ireland followed on heels with a staggering 13 % pike in suicide rates. Britain, though not ostensibly affected could not salvage itself. Recording 8 % rise in suicide rates; Britain tallied 5706 people killing themselves in 2008 many of them cursing debt for their plight.
Does this mean everyone who has loans burden is affected in similar manner? Analysts say that the effect of debt burden on borrowers is asymmetrical. There are no worry characters, which have sufficient asset base and least worried about debt. More than that, they generally flaunt positive attitude towards obtaining and paying out debt. The reckless borrowers on the other hand may not have asset base, but consider more the loans it is merrier. On the middle we have consumers who borrow over the limit considering it as fashion or way of life.
Worry kills
On the other side of the coin are people who are inordinately worried about loans. Most of them are either fixed income earners or enjoy luxury life erstwhile, but were short on disposable assets. A salutary feature in them is that, they get the blame game end with them; in sum, they are justifiably worried about outstanding debt. From this point onwards, we see quick slide towards depression. There is a saying: Why worry kills more people than work because more people worry than work. This comes true as people worry more about their debt. About 11 % of British citizens consider debt as the biggest worry affecting their quality of life. In the case of people who have health issues or suffer from chronic disease, the trepidation is marked. They lose weight and sleep and before long appear mere shadow of their former selves. Worry also targets those who are dependent on drugs or alcohol driving them more towards these. Another casualty is the ones who are light hearted. When they receive notification from their credit card issuers that their file is now transferred to collection departments they get jittery. A follow-up communication that the file is now with third party collector sends shiver through their spines, leading to intermittent bouts of depression.
Seeking remedy
Not everyone acknowledges going through low. Many hide it and implode one day by taking their lives out. Out of others who realize nearly 80 % do not take counter-measures and lurch towards the danger zone in matter of weeks if not days. The fortunate ones re-examine their affairs. They follow three track policies to take them out of the mire.
1. Consult medical professional in treating symptoms of low feeling to get back to proper health
2. Seek advice in arranging creditor meeting, re-scheduling loans and recovery finance to turn the corner
3. Obtain counsel in understanding and evaluating your cosmics, so that you can once again make your cosmics work for you. Cosmics are aspects residing within you generally go un-noticed. Once you know your cosmics well you can manage debt and the resulting depression better.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Finance, Investment, Personal Finance
Posted in Business, Cosmics, Finance, Investment, Personal Finance | No Comments »
Friday, February 24th, 2012
No doubt, personal finance had seen a major dip in 2011. When you analyse the performance of chief areas of personal finance namely, mortgage, car finance and credit cards, a glaring trend pops up. Consumers are shunning mortgage and car finance and banking on credit cards. Instead of accumulating assets consumers have jacked up credit card expenses. Whatever happened…..?
There is an adage; when the going gets tough, the tough gets going. As we see a big reverse in personal finance in 2011 consumers instead of being tough on pruning expenses have gone soft on expense loading. Spending via credit cards has notched up in many countries. Britain experienced a staggering 35 % growth in credit card outstanding compared to the previous year. Conversely the number of people using credit cards rose marginally by about a percentage and clocked at 12 Million. In America the outstanding skyrocketed to U S $ 65 billion, a hefty US $ 20 Billion more than the figure for 2010. There again the number of users remained almost stagnant.
In comparison, mortgage finance pales into insignificance. Britain experienced a chipping away of almost 10 Billion sterling worth of Mortgage debt in 2011 bringing to the mind of 1970s when economy was in the dog house. Reduction in activity in the home market coupled with a significant reduction in re-mortgaging were the chief cause for this trend. More potential home borrowers kept away from availing finance even though banks were ready and willing to grant them finance. In fact mortgage loan approvals topped Sterling 8 Billion but much less were actually drawn down. Most lenders reported that borrowers were keen in paying existing finance at quicker pace to bring down the interest cost. They agree that the loans that exist now are booked when interest rate regime was in higher integrals.
Same story was repeated in the car finance scene too. Car sales were down 4.4 % in Britain in 2011. The number of cars sold was 1.94 Million lowest since 1994. Sales were mainly in the medium market models lending credence to the figure of 96,112 of Ford Fiesta sold. In contrast high market BMW 3 Series clutched at 42471 cars. In line with this, loans for acquiring new cars also plummeted. No major banks came out with any innovative car finance scheme in 2011. Reading from what is happening in the personal finance you cannot help but come to the conclusion that consumers are smart borrowers. Here is the sketch of their mind-sets as painted in my canvas:
1. Short-terming: Consumers have resorted to fire fighting; that is to play in the short term market rather than dabble in long term market
2. Asset as burden: They are not keen to garner assets like home and car investment that could easily become a weighty burden. Whereas blipping up expense is a manageable one. This blending of financial alchemy displays shrewd reading of the economy on the part of the borrowers
3. Lowering interest cost: Borrowers are going one over other to pay down high-interest home loans
4. Budgeting well: Consumers show remarkable ability in using interest free credit period offered by credit card companies and liquidate outstanding in time
5. Cosmics have landed: Borrowers are driven by their cosmics to play safe without getting into too many financial commitments which if goes un-checked would, potentially lead to long term instability in mental peace and financial balance. Keeping cosmic balance dictates that they go on rope walking this time around and wait for things to improve in 2012.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Finance, Investment, Personal Finance
Posted in Business, Cosmics, Finance, Investment, Personal Finance | 1 Comment »
Wednesday, February 22nd, 2012
A business logo is more than a symbol; it speaks the language of business, so to say. The whole canvass of business policy and practice is summed up in a business logo. A business and its logo remain one and the same. A business is known by its logo; correspondingly a logo signifies the business. This duality is the key function of a business logo. To carry out this function a logo must be well crafted. There are six tips for designing a better business logo:
1. Keep it Simple, but not stupid: All of you know about the KISS principle: keep it simple and stupid. As regards to business logo you have to do a bit of tweaking; follow the first commandment to the letter, yet keep the stupid part out. A simple logo means a lot for you. The adage goes: brevity is better part of valour. When a logo is brief in terms of simplicity it garners more attention and better response. Complex and complicated logos generally fall on the wayside because they neither get attention nor any response afterwards. However, I caution you that simplicity does not mean that it is devoid of any colour or credence. Inside your simple logo, there must be story woven about your business, its vision and mission
2. Dazzle viewers first, allow them to think later: I learnt this from “Shock & Awe “theory stroked by former President George Bush that failed to win him the war, nonetheless this can work wonders in business. A logo must make great first impression on the viewers. Place them on the cusp of a journey towards your business logo; grab their attention and make them bedazzled by the logo; thereafter take them to the higher level in making them think that the logo is just part of their lifestyle. This is how Coca-Cola was built
3. Convey the message: At first brush, logo looks like a symbol, form, or lines and letters; it is more than that. A business logo essentially communicates the mission and vision of the business; put it in other words, it functions as a medium. Now that you got a medium it is time for you to develop the message to go across your audience. Firstly, you must chalk out a theme and then you should calibrate it to suit the message you intend to broadcast, thereafter you need to embed the message within the business logo. Look at the Apple logo. Apple is the name of computer and symbolises a health food or may be the forbidden apple; after taking a mouthful the apple sans the part squirrelled away is presented as a message. The computer works better even after it is being battered, provided that if it is an apple
4. Flesh out the structure: Indeed, substance matters in developing business logo; equally important is the style in which it is delivered. Substance and style are in the works of a better business logo. Substance was discussed as the message; style is anchored on the way it is presented. Tone, texture, fonts, and colours are all the paraphernalia added into a logo to flesh it out; these give weight, emphasis and nuance to your message. It can be peremptory like IBM or stylistic like Nike
5. Make it memorable: You have dazzled the viewer and then conveyed the chosen message in a winning style. Still there is something missing; that is whether the viewer would remember it now and recall it later. To imprint the logo on your viewer, you have to win both their hearts and minds. The logo must appeal to their sentiments opening the gate valve of their emotions, attachment and liking towards a business logo. Assuming viewers are rational and thinking persons, it must also get copied into their brain; the brain waves heave up and down letting your business logo to float; at any given moment when the memory is tinkled or the viewers see your logo somewhere the brain waves respond at prompt positively
6. Sprinkle cosmic resonance: Finally, a logo must have cosmics flowing within. A better business logo delves deep into the cosmic reservoir and sprinkle out cosmic energy to swell the ground with goodwill, positive feelings and emotional attachment. In turn these get transposed in the minds of viewers as sense of appreciation and feelings of attachment towards your business logo.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Logo, Cosmics
Posted in Business, Cosmics | No Comments »
Thursday, February 2nd, 2012
Once you have made up your mind to be a business person next thing that strikes you is whether to start a new one on your own or buy an existing business. Both options are doable. Yet, buying an existing business seems to be an easy way out. Let us see the advantages of selecting this alternative.
1. Knowledge Bank: The first and foremost plus point is that you know the lay of the land as far as the business you intend to buy is concerned. You have details of financial, operating and marketing performance; you are appraised of its staff, customers, suppliers; you have ideas about its owners and bankers. You can get published information to corroborate what the present owners have tried to convey
2. No Sunk-cost: There is no need to re-invent the wheel; you are spared with time and money in setting up a new business and going through start-up stage ; you have no hassle of getting approvals and licenses; more than that your decision making is made much easier as you have to say yes or no
3. Ready-made: It is just like buying a ready-made suit that fits you well. When you buy an existing business you take not only the entity but everything connected with the entity. There are trained staffs attuned to the ground realities of the business; they are well equipped with systems encompassing various activities of business such as purchasing, operating, marketing, selling, billing, financing and so on. You take over a pool of customers who are time-tested and have above par credit reports. In addition, there are suppliers, reliable in honouring contracts. All these cascading benefits are of long term nature impacting your short term performance. On top of all, you are briefed on business trends and future scenarios by the owners and employees. At a given time this turns out to be your short-term asset that helps you capitalize it for long term survival
4. Business Reputation: The fourth advantage rests on reputation of the existing business. They have track experience and a name in the industry to go with. In common parlance it is known as goodwill. You buy a business associated with the kind of reputation in which it is recognized by the wider society
5. Price is creamy: Depending on how you negotiate you may end up with a big bargain if you buy a business at a stated value that is less than its market value; sometimes you may have to pay a premium price that is to pay more than the market value. In either case you get a worthy business in your hands
6. Finance available: Another key positive is that you can finance the purchase of an existing business much easily than getting money for a new start-up. Banks generally lend part of the purchase price when it changes hands. The existing bankers of a business are generally inclined to continue their relationship with the new buyer by supporting him
7. Foundation is laid: When you buy existing business you get one with solid foundation. What you have to is to build on this foundation. You can set the tone on product improvement, profitability enhancement, widening the customer base and diversifying capital sources in felicitous manner
8. No Down-time: Once you buy existing business you metamorphose as a business person overnight. There is no waiting time; absolutely no time is wasted either. You get into the hot seat sooner than later as per purchase agreement you sign up with the seller
9. Cash flows from day one: An excellent plus is the way cash-flow begins. You buy the business and immediately afterwards you see cash coming in, in correspondence with the business activities continuing unabated
10. Cosmics begin: Finally, as I say, cosmics commence to function making your life rewarding and profitable. You have chosen a business; it has its own cosmics. You are a business person and you have your unique cosmics, aspects residing within you shaping and influencing you though these are un-seen and un-noticed by you. Once you fuse both these cosmics you become a successful business guy.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Finance, Investment
Posted in Business, Cosmics, Finance, Investment | 2 Comments »
Wednesday, January 25th, 2012
When you are in trouble, you are counselled “count your blessings”. To be grateful for the good things you have and stop badgering of the bad things you are beset with. What are the good things a business has given you? Let me name them one by one:
1. Grateful forever: Business gives you the sense of gratitude; you pay the salaries and wages to your employees; you file the tax returns regularly; you meet your obligations squarely and finally you reward yourself for the trouble you are taking in running the business
2. Lasting friendship: You traverse the friendship bridge. Everything you do in business is in good faith upholding noble virtues of friendship and team spirit. If you take one of these out your business flops. Alfred A Montapert put it succinctly: “All lasting business is built on friendship”.
3. Nothing but the truth: Earth has a core of minerals and melting fire; fruit has core of plum and seed. Likewise, business has a big core; not made up of metals or flesh; but with layers of truth. You strive to be truthful in all your dealings, which we call in plain word as integrity. In a small business integrity is the key strength. No surprise that John Greenleaf Whittier declared: “As a small businessperson, you have no greater leverage than the truth”.
4. Morality to the fore: Ethics and responsibility of business is a subject of debate after the Gulf fire caused by the British Petroleum (BP). US administration is now taking efforts to bring criminal action on the company’s miserable failure in not putting out the fire in timely fashion. For an ordinary business person morality shall remain the binding cord between him and people whom he associates with, in the conduct of his business. “Every young man would do well to remember that all successful business stands on the foundation of morality”, admonished Henry Ward Beecher. Morality, therefore, remains larger than life picture in your business
5. Winning Attitude: “Success or failure in business is caused more by the mental attitude even than by mental capacities”, says Walter Scott. Not a whit of doubt about it. So many guys with brilliant ideas enter the market but fail to make their mark and wither away. What is going wrong with them? Attitude, positive attitude. That is what they lacked. A sought after boon from your business is the kind of winning attitude where upon success is premised such that even if you run into snags you come out with a broad smile
6. Drive you Crazy: Pause for a moment; look at what business bestowed you now. The burning desire to do, to perform and to succeed. The coals never stopped smouldering within you. You go ahead whether rain or sunny. That is what keeps you in trim and shape, not the treadmill you work out in the evenings. Still you have to drive the business like a car or perhaps your wife. What happens if you don’t? B C Forbes gives the answer: “If you don’t drive your business, you will be driven out of business”
7. Grow tall & grow big: Looks like childhood stuff. Never mind. From toddler to kid; youth to middle aged you continue to grow; so must be your business. Unless you build up your business big and tall you leave no signature of yours. Will Rogers put it this succinctly: “If you can build a business up big enough, it’s respectable”. Your business gives you that dream; let the dream becomes a self-fulfilling vision
8. Never Stop running: Ostensibly, business makes you run in marathons. Success must breed further success. Any complacence skittles you off from your turf. You remain tethered to your business till you finish your marathon line and breast the red ribbon. Sample this from Thomas J Watson “Whenever an individual or a business decides that success has been attained, progress stops”
9. Cosmic Blessings: My final piece as always is to talk about how cosmics make you as a business person. I looked at what Thomas Carlyle has to say about cosmics. “ “Blessed is he who has found his work; let him ask no other blessedness”. See how pithy and philosophical the statement is. Cosmics are aspects hidden within you influencing you in your business life. If you can understand and evaluate your cosmics you can get into right business. When your cosmics are firing in all the cylinders, you wake up in the morning, feeling in high spirit as a triumphant business person.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmic Blessings, Cosmics, Small Business
Posted in Business, Cosmics, Small Business | 3 Comments »
Monday, January 23rd, 2012
Everybody has to take some risk somewhere at some time with something in his life. Prototyping business and career persons into risk taker, risk neutral and risk avoider is too mathematical and sounds theoretical. To succeed in life you have got to take risk. Let us see how taking risk can be made easy for you.
Imagine you are travelling in a speed train. A fellow passenger got stuck in the auto door in between two compartments. Someone must dislodge him from the door panels to get him extricated. If he remains there the chance of his being suffocated perhaps leading to fatality is high. If you attempt to stop the train unnecessarily you are subjected to a huge fine. What you will do?
1. Pull the alarm signal
2. Try to extricate the passenger with what you can, failing which you will alert the engine driver of the impending calamity and wait for instructions
3. You will cry out, get others involved, do everything you can, alert the engine driver and pull the alarm signal
What you do in this circumstance reflects your attitude for risk taking. If you have ticked off item one then you are an impulsive type of risk taker ready and willing to take risks on the spur of the moment and driven more by emotions than by intelligence. If you park on the second option, you are a cautious risk taker playing safe and taking no chance. The last option is chosen by a calculated risk taker. He thinks fast acts fast and gets cracking.
What makes you take risk?
Attitude to risk is influenced by many factors. Culture of person is chief amongst these. People who live in Northern Hemisphere are more prone to take risks, especially in Europe and North America. Traditional societies that value loyalty and obedience shun much of risk taking. Genetics on the other hand play a distinguished role. Chinese have traditional Confusion culture shaping their outlook and behaviour; we believe that it prods them to conform and comply and treads the beaten path. Nailing this myth, men and women from Hakka Caste amongst Chinese show remarkable ability to take risks and as a result they have emerged as the most successful community in the Chinese mosaic. Location is a key factor in the evolution of risk taking personality. Surprisingly city dwellers get spoofed by a crisis while their counterparts in off-city limits are far too adventurous. Upbringing also contributes in moulding risk taking. Families where strain of courage and bravery runs select armed forces as their major choice. General Patton and General MacArthur are noted examples. This can be further extended to occupation as well. Generally guys in the Navy will sink with their ships after letting others use the remaining lifeboats. Most deciding factor is cosmics that reside within each person influencing and shaping his life throughout. Observe a school teacher in her brooding moods and a college professor in cheery moods, both are in teaching profession, but, what makes one pensive and other sprightly is the work of their individual cosmics.
What taking risk can do for you?
You can hone your skills in risk taking if you are convinced what it can do for you. Here are few goodies you get:
1. Taking risks helps you to broaden your outlook, your horizon, and your space in managing events and people
2. You learn to use your emotion and intelligence equally well
3. It aids you in developing a strong personality and let you have a hanker for risk and uncertainty
4. You will not wilt under pressure but keep composed and calm
5. It marshals your power in directing your swirling mind to focus on the job at hand
6. You learn to make decisions quickly, cautiously or in calculated manner as demanded by the situation you are in
7. You tend to learn a new skill and get coached in new methods of doing business and career. Even at old age stockbrokers look ostensibly younger and smarter because they continue to be up and running in the bull and bear market
8. You get all three “ Es” in one go: that is education, experience and exposure
9. You will develop an analytical mind at the same time willingness to go through life challenges. More so in taking business risk
10. Finally, you develop your cosmics to give you that re-assuring aura; people tend to trust and admire those who never hesitate in taking appropriate risk as and when necessary.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Risk, Cosmics
Posted in Business, Cosmics | 7 Comments »
Friday, January 20th, 2012
Personal branding is packaging your unique personal features into a consolidated brand. This branding then turns out to be a valuable asset in your repertoire. Every person in business or career shall develop his own personal branding. As time goes on, you and your personal branding are perceived by the society as one and the same. Your unique personal branding is a sum total of one or more of the following aspects:
1. Personality Traits: It is all about how your personality attributes make the man you are. Will you think in silence and be an infighter like Leo Panetta or passionate and extrovert like General David Petraeus. Recently President Obama made a tactical change. He shifted General Petraeus to CIA and Leo Panetta to Pentagon. Obama read the future well. Obama has to season the 1. 4 million US Armed forces to be trained in future wars that require intelligent analysis and actions rather than mere bravado. Leo Panetta fits the bill. Contrarily, the present CIA has to be transformed as a fighting unit with covert operations in armed conflicts. None other than David Petraeus is suitable for this vocation
2. Character Mapping: Strength of character is a unique personal branding. When you remain unfazed on the face of crisis as General David Petraeus oversaw in Afghanistan and Iraq and later as the head of the U S Central Command you are singled out as a person having the grain of character mapping to be a leader. You must possess such vastness of character that can be can be summed up in a simple phrase: personal branding
3. Smile & Style: Frank Sinatra sang “Do it in my way”. In cinema and in real life he had his own style. His cigarette lighter never left him and was buried as a memento with him. He was too smash & bash to go without it. What about his smile. For yesteryear Cinema goers his smile held much allure and they still rock around to see his films even decades after these were originally made
4. Speech & Mannerism: Ronald Reagan had unique personal branding in speech and mannerism. He was an actor, swashbuckler and a great communicator. His choice of words and diction is legendary as his cinema and political career. He used jewelled phrases, sometimes pithy sometimes denigratory. In 1986 confronted with multiple terrorist actions by the fulminating Libyan leader Muammar al Qaddafi, Reagan used fighting words by calling him “The mad dog of Middle East”. In fact, it presaged his wisdom; years later Gaddafi was killed on the streets of Sirte in Libya echoing Reagan’s diatribe
5. Body Language: George Clooney displays his personal branding via his body language. His walk & gait, his sitting postures, the way he moves his head and the mischievous twinkle in his eye are examples of body language that seal his personal branding. Furthermore, as an accomplished actor he uses cadence and rhythm in his tone to orchestrate his body language. He is final embodiment of American cinema today. The point need not be laboured anymore; just look at any survey on eligible bachelors, George Clooney tops the list
6. Image Projection: Your image projection distinguishes you from countless others. Your image can vary according to your skills and attitudes. Positive attitude combined with mastery of inter-personal skills make you a hero amongst your colleagues, peers and subordinates. A proactive executive is a born leader while a manger with a laid-back approach could project the image of a back-room operator. If you act with tenacity born out of conviction you are deemed a social reformer. If nothing can swerve your loyalty to your boss you project as an indispensable aide. As you keep your sight on corporate missions and vision you will be appreciated as the best CEO. When you are consistent in conduct and move with your network in faith and harmony you have groundswell of support and admiration wherever you go. Any of these pointers in image projection can easily translate into your personal branding
7. Value Proposition: James Bond says: “Stir the martini and not shake it”. In the films even other characters accosting him repeat this mantra perhaps to taunt him or curry favour with him. What comes to my mind is the value perception James Bond brings, albeit, as a fictional character. Do it mildly and you shall win. You see the list of movers and shakers in commerce, entertainment and industry. Many of them are too mild to become shakers anyway.
8. Cosmics as Binding Twine: When you finish reading the seven aspects outlined above you cannot miss the central thread connecting people to these aspects. That is their cosmics. Each person has individual cosmics; hidden resources that reside within him shaping and influencing his personality, skills, attitudes, beliefs, conduct and host of others. Before you develop your personal branding you must understand your cosmics and leverage it in your business or career life because it is your cosmics that elicits perception and response on the part of others in dealing with you.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Lifestyle, Personal Branding
Posted in Business, Cosmics, Lifestyle | 7 Comments »
Wednesday, January 18th, 2012
Receivable finance is a novel and non-conventional way of converting credit sales into cash. In USA it is known as receivable finance and in the British Commonwealth as factoring. The system basically collateralizes your credit invoices. Financial institutions dealing in commercial credit are front runners in this mode of activity. Let see what it can do for you:
How it works
You sign up with a financier an agreement to finance your trade receivables. Once a credit sale is made you generate a trade invoice, deliver the goods/service to the buyer and send the invoice to the financier after receiving the acceptance to, by the buyer who signs over the face of the invoice. It is concomitant on the seller that he deals with credit worthy buyers. These invoices are verified by the financier who will do a check on the credit worthiness of the buyer and discount the bill according to the agreed rate of interest and the net amount is credited to your account. Receivable finance takes various forms:
1) Recourse Finance: Under this method you are liable to pay the financier in case the buyer does not meet his obligations on due date
2) Non-recourse Finance: In this case any buyer default is absorbed by the financier who takes adequate payment insurance to cover any perceived default
3) Processing Debt Collection: In most cases financiers would undertake processing of the debt collection including recording debt, collecting payment, depositing cheques, generating reports, chasing debtors and do other follow-up activities. Some banks grant receivable finance without undertaking collection on their part
4) Quantum of Finance: Generally financiers grant full quantum of the invoiced value less the discounting charge which is pegged onto monthly interest rates. Banks such as HSBC use a method where they extend portion of the invoice value upfront and the balance after the buyers pay up less any discounting charge
5) Selective Debtors: Under this scheme the financier has the right to choose which invoices he will finance and which he will reject.
Pluses
1. Receivable finance converts paper into money; debtors into capital; sales into cash-flow. You get your credit sales as up-front cash, improving your business sales and prospects
2. This is more flexible arrangement than bank loans or bank overdraft/line of credit. You have no hassle in submitting financials, tax returns and various other statements that are called for in processing conventional finance applications. Moreover, there is no limit imposed by the financier on the amount you can raise
3. Under no-recourse finance you have no responsibility for the eventual payment by the buyer
4. Where processing debtors is on the part of financier you are relieved of all the paper work and trouble in going behind debtors
5. You can deal in open account by enlarging your business operations; advance payment and letter of credit or accommodation are no longer necessary
6. Most important, you have cash resource to make your purchases without credit terms; this helps in negotiating for concessionary prices and favourable terms of delivery from your creditors who supply you materials and services.
Minuses
1. Before you sign up on the dotted line of the Receivable Finance Agreement, you must read and understand what it tells about your responsibility, your liability; the way you will get your finance etc. You should distinguish between recourse and non-recourse methods; on quantum of finance, selection of debtors and collection of receivables by the financier. If you do not understand the receivable finance methodology you will regret later
2. You must first ask the question. Do I really need this money from the financier? Can you employ the cash-resources on useful matters or will it simply idle in a checking account
3. Cost of receivable finance is very prohibitive compared to conventional bank loans. Discount rates currently hover between 0.75 to 1.50 % for a 30 day period. When annualized it goes as high as 9 to 18%. Can you afford this cost?
4. Receivable finance is suitable for a business that is in start-up or in first level growth stages when they are cut away from conventional banks. Once a business moves into secondary level or growth area they have enough credentials and clout to negotiate with bankers who can offer more completive schemes in financing working capital
5. Receivable finance has worked successfully in few sectors such as health care services which are covered by national health schemes or corporate re-imbursement schemes. I have seen receivable finance doing excellently well in advertisement industry. But in many other industrial or commercial sectors it could be a big flop
6. Cosmics play havoc when you get into receivable finance. Many customers feel second rated when someone else other than the seller contacts them for payment or follow-up. Later they do not turn up to buy anymore. The troubling phenomenon is that receivable financing conveys to many that the seller is going through financial woes. Your initial euphoria of getting cash promptly evaporates afterwards when you see your customers turning their backs on you. You are aware cosmics are aspects that are within you shaping and influencing your business throughout. Weigh your cosmics and your need to go for receivable finance and make a trade-off.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Finance, Investment
Posted in Business, Cosmics, Finance, Investment | No Comments »
Monday, January 16th, 2012
Every business goes through business cycles in correspondence with the way economy expands or contracts. There are four or sometimes five phases of business cycle depending on how economy is doing. The business cycle is very much asymmetrical, that is, stages of the cycle are not equal in time duration. Whatever the duration is, a business has to go through each phases of business cycle with foresight. In doing so, it must think long-term and act short-term.
Business Cycles
The five phases of business cycles are:
1) Growth: Also known as Expansion
2) Boom: Alternatively known as Peak
3) Decline: Otherwise known as Depression or Recession
4) Bust: Synonyms are: Slump, Trough
5) Recovery: This phase is unique in that it either follows Decline or Bust phase
Characteristics of each phase and how business must respond to it is explained in details below:
1. Growth
Economy picks-up, so does business sentiments in the market. Consumer expenditure moves upward; corporate purchases jacked up in response. Business generally acts on the spur of the moment in enlarging the scope of operations and expanding business horizons. Some business can lurch out of control and swells its employees and grow helter skelter. Well managed ones get its act together and chalk out a recipe of success. Some tips:
Ø Plan out investment in technology and communication as you need this in the coming phase of boom
Ø Expand your market keeping an eye on how globalization, per se, will affect you. You have to be competitive in the local setting and if possible seek pastures abroad for your products
Ø Keep the cost down, finance pruned and your profit margin at reasonable level
Ø Develop your cosmics to work at the faster phase; 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
2. Boom
Economy expands briskly and sometimes over-heated still triggers intermittent stimulus for business to beef up operations. So business blips up sales and purchases; hire more labour and commission new plants and machinery. Finance borrowing is at peak, so is the cash outlay on resources employed in both human and technical. You have twinkle in your eye as if Zeus has descended from Mount Olympus. Anyway you must have a sense of caution thus:
Ø You have to distinguish grain from the chaff; evaluate whether upscale is a seasonal one or cyclical one. Seasonal sales arise from holiday season and during summer; cyclical expansion in sales is a concomitant to economic cycle
Ø Ratchet things up a notch in new technology that you have acquired in the previous phase along with concerns for environmental issues; never neglect your responsibility in building up sustainable environment because as you come to the end of tether in boom cycle you badly need to keep progress at even keel
Ø Diversify your product line-up and markets. If you have concentrated on a single product change into multi track; you have to see new market opportunities. At the same time enhance product quality still more
Ø Get you cosmics to keep you in perfect balance without racking up wasteful expenditure
3. Decline
While economy shows signs of gradual bottoming up, overall progress in industry is stymied. Your business is unable to post big profits. You pitch your hope for a slow decline if your business is declining in relation to the economy. If you are getting into prolonged depression then you need to fear whether you can pull it over or you will be out of business soon. You must still be positive and take a safe assumption that the next stage is going to be recovery rather than slump. Tips are:
Ø Reduce overheads promptly; start negotiations with lenders on term loans and improve efficiency in purchases, inventory maintenance, sales and delivery
Ø Coach your employees on managing change so that they are well equipped in terms of attitude and skills in tackling an uncertain future
Ø Create some kind of buffer in money resources and get a life boat ready for any eventuality
Ø Cosmics can help in shaping your response to the incoming recovery, or in the worst case a bust
4. Bust
Economy totters and goes into slump. Many businesses shutter their doors. Everything appears gloomy. Should you follow suit and get lost? Far from it. Your business life must go on. You have to duke out the trough. My advice is you court success rather than embrace failure. Do the following;
Ø Becalm yourself and get going in business albeit in small scale
Ø Instead of retrenching employees ask them to work for lesser salary
Ø Check out for a major overseas buyer and come into terms with him for bulk sales; persuade your trade and finance creditors to give more time and canvass for emergency assistance from state; continue your good work in marketing
Ø Re-examine your cosmics to see how you can weather the storm
5. Recovery
Economy slowly emerges out of trouble. Business sentiments on rise, though, not to the level you saw during growth phase. Still there is light. Consumers are returning; sales are looking up. Advice:
Ø Put your business in first gear; get the budget process to check income and expenditure; prepare cash –flow on weekly basis
Ø Motivate your employees to meet up with the challenges in the business environment
Ø Fire in all cylinders and operate a fast track marketing campaign
Ø Follow what your cosmics say: You are a re-born business person
Cheers,
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Cycle, Cosmics, Finance, Investment
Posted in Business, Cosmics, Finance, Investment | 2 Comments »
Friday, January 13th, 2012
Banks have gotten into a corner; from four sides they are being beleaguered, stay like a mouse in a trap. Roaring home prices on one side juxtaposed against slump in the home market in the opposite direction; skyrocketing of bank bad debts pitted against higher demand for mortgage finance on the part of home owners. Encompassed in this state banks have done what you expect them to do: tighten the rules on mortgage lending. Has this policy worked?
It has not. Many banks are reporting decline in mortgage loans approvals; overall earnings dipped in many banks. Citigroup, the U S giant is expected to post revenues in 2011 highlighting 30 % drop from the previous year. To revive banks must re-examine their policy and procedure of mortgage lending. Banks always balance their portfolio of loan assets in corporate lending as against personal finance. When one goes down other must go up. Now is the time to shift the bar of personal finance much lower. To do that, banks need to relax mortgage rules.
Matching loan to value with affordability
Conservative dictum of loan to value ratio (LAV) hovers between 60 to 75%. It means that a borrower will get a loan amount equal to this percentage of the value of the home he pledges. But there is a caveat he must be able to afford this amount. In other words the borrower must have the capacity to repay the amount he borrows. Matching loan to value and affordability has brought enough headaches to the banks. In New Zealand, acting on their own, banks upped the pole on LAV to 80 to 90% to encourage demand in mortgage loans. Banks in Hong Kong, on the other hand, were spurred to by their monetary authority to relax rules and increase the LAV. But in Britain LAV went haywire. Recent pronouncement of the UK Financial Services Authority (FSA) over mortgage rules brings out a telling example of banks violating the LAV prudence by granting loans at 125% of the LAV.
Equally important is to ensure banks assess affordability in a practical manner. The current practice of asking too much private details including listing of expenditure must be amended to a borrower-friendly regime of selective assessment. Household expenditure could be declared by the borrower in specific terms along with his take-home pay if he is an employed person. Self-certified income and expenditure can be allowed in certain cases. A thumb rule of 3 to 4 multiples of borrower annual revenue as loan quantum is in use globally. Still prudence must reign. FSA points out that in one instance a bank has gone up to seven times earnings of a borrower in granting a mortgage loan. In case there is revenue deficiency of servicing loan by a single borrower, banks should add his or her spouse as co-borrower and bring in the spouse’s income in calculating affordability. Some banks tend to act too conservative by insisting that the home to be mortgaged should also be in the joint name of borrowers. This entails legal cost and sometimes elicits disaffection from the original applicant. Another important issue is how to treat short term and long term debt declared by the applicant. Bundling together both short and long term outstanding by an applicant is morally wrong as mortgage lending is generally for a longer period. Therefore, banks need to look at the current long term debt of the applicant and decide on his affordability, leaving aside short term debt arising from credit card outstanding.
Re-mortgaging the future
After servicing personal finance, borrowers tend to ask for additional loans by doing a re-mortgage. In addition to the primary mortgage that exists, they require secondary and tertiary mortgages. If banks allow LAV of 80% on the primary mortgage the next tranche can go up to 90% and the next till it reaches 100% of LAV. Additional funding is generally tied to the future value of the property. There is no harm in extending additional mortgage, but this must not be done purely on expectation of future value. Piggy back riding on future home value has been the cause of property bust in Hong Kong. Learning lesson from real estate bust and boom cycle, banks should take up a defensive posture in assuming interest rate going up in future and in that context whether the borrower can service the additional finance cost conveniently. One way to mitigate the situation is to checkout borrower’s future income. At all cost re-mortgage by borrowers to maintain lush lifestyle must be axed.
Classifying borrowers and Credit Reports
Borrowers are classified according to credit reports and on need basis. Every bank gets a credit report of an applicant from a credit information bureau or agency. Un-paid outstanding of debt could bring credit score down. Let alone bad or miserable credit score, even poor score is frowned upon by banks. Recently approved U S “Home Affordable Refinance Programme (HARP)” advises banks to ignore slight blemish in credit report and urges that if an applicant is current in paying mortgage instalments during last six months, he be allowed to avail additional finance. On the basis of need, banks in New Zealand prefer first home buyers from others. Banks in Britain have predilection for right-to-buy tenants who apply for finance. Home movers and applicants for buying additional homes are rated low in terms of need and do not qualify for concessions.
Cosmics play a role….
For a bank as well as borrower cosmic balance is a must. When a borrower gulps up more than what he can chew he gets more worries; likewise over-exposure to a particular borrower also gives worries to a bank. Both bank and borrower must learn to have cosmic balance. Cosmics are aspects that are beyond facts & figures but still influence the conduct of personal finance between bank and borrower.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Finance, Investment, Personal Finance
Posted in Business, Cosmics, Finance, Investment, Personal Finance | 2 Comments »
Wednesday, January 11th, 2012
Recent spat between France and Turkey after the former passed legislation criminalizing denial of Armenian Genocide has brought chaos in both countries. Surprisingly, business in both countries has risen to the occasion to bring a sense of balance and took steps to normalize the otherwise contentious situation.
On the road to chaos
Every now and then, countries spar themselves which is considered normal in diplomacy. Globally, it is a standard practice to agree to disagree. We know about the separation of power in democratic countries comprising of Legislature, Executive and Judiciary branches. A parliament of a country has sovereign right to pass legislation. But when such legislation is passed at the behest of the executive arm to spite another country then there is a crisis. Moreover, a parliament can pass a legislation commenting and naming an incident as bad in law; but when it oversteps and makes it a criminal offence to deny such incident it is arbitrary, to say the least.
Historians are still debating about massacres that took place in Eastern Turkey in 1915 when both Armenians and Turks were killed as invading forces from Russia were being resisted. Some historians consider the massacre as perpetrated by the Turks. On the other hand quite a number think contrarily and concede both Turks and Armenians were killed by Russians and their agents. Whatever the opinion is, it is best left to the historians to establish a truth commission and find out what exactly happened instead of blaming one against the other.
France passed a law in 2001 describing the incidents happened in 1915 as Armenian Genocide. In December 2012, its legislature passed a law that imposes a penalty of Euro 45,000 on a person who denies such genocide. There are 600,000 Armenians living in France whereas Turkish diaspora is about 40,000 only. The president of France, Sarkozy is facing election next year and he wants to get the Armenian support. Hence, he has instigated the passing of this piece of noxious legislation.
In its wake….
This brought huge spat between two countries. Turkey took several measures in retaliation. Recalling its ambassador, cancelling mutual meetings, cancelling military concessions granted to France on its soil. Beside these administrative measures, Turkey has unveiled economic measures. A voluntary boycotting of French goods is a business measure the Government urged on the public. In the finance field Turkey has a potent weapon. Turkish Central Bank has foreign reserves parked in Europe. The largest reserves of Euro 23 billion is held in French Government bonds. If Turkey shifts it to another country, invariably Germany Foreign Exchange stability of France can dip. In this chaotic situation politicians in both countries are doing nothing to avert a looming crisis. Ostensibly, saner counsel prevails in business circles in both countries. They express a voice of reason.
Business as saviour
Jean Lamierre and his Turkish counterpart Hasan Colegoglu, chamber presidents of France-Turkey Business Council, sprang into action. They ensured that everything is normal and business is as usual. The powerful Turkish Business Association TUSAID also intervened when its lady president Umit Boyner urged caution on the part of Turkey to be realistic and take the situation in its stride. They cannot be wrong. Look at the statistics. Turkey is France’s sixth largest import buyer; yet in terms of volume it is about 1.3 % of French exports. On the other hand, France is Turkey’s fifth largest import buyer; in terms of volume it is about 6% of Turkish exports. In value terms the mutual trade between France and turkey is estimated as 15 billion US $. Trade balance favours France with about 1 billion US$ as evidenced in Turkish exports to France at US$ 7 billion and its imports from France at US$ 8 billion.
Apart from trade, investment also works in a skewed manner. About 250 French companies operate in Turkey; you can easily spot the best French firms in Paris as well as in Istanbul. Notable amongst them are: Carrefour, Lafarge, Alcatel, Peugeot and Renault. Automaker Renault alone employs 6,000 people and operates the largest plant outside France. The total investment of French business in Turkey exceeds US$ 8 billion. Turkish investment into France is sizeable but does not exceed 1 Billion US$. About 35 big time Turkish companies have opened doors in France. Conglomerate Zorlu Holding and automaker Orhan Holding are key players. The latter employs about 460 people in France
Cosmics help keep balance
Turkey with a growth rate of 8% is second only to China today. Its booming economy, its export friendly policy, and its young and able workforce cannot go into drains due to political chaos. France is already tottering and next in line to go down in the Euro crisis. A sober assessment is the need of the hour. That has come from business, because only business understands how to keep a balance. Common sense along with cosmic balance can keep the economic ship sailing. Ignoring cosmics bring out in its wake economic imbalance, rhetoric and knee-jerk measures. Once again business in France and Turkey demonstrate that politicians bungle, gamble and ignore their mutual cosmics but only business can save the countries from impending chaos.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Finance, Investment
Posted in Business, Cosmics, Finance, Investment | 7 Comments »
Monday, January 9th, 2012
Whether you are in business or in career, you will have some kind of liquid assets with you. At different occasions you will be asked to declare your liquid assets. For example, when you are completing your credit card application or filling the form for personal or business finance. Therefore, it is better you get a hang of what are liquid assets.
Liquid Assets Explained
You have assets such as bank balance or real estate. Fine. When you begin to dispose the assets you find bank balance can be withdrawn on demand whereas real estate takes quite some time for its disposal. You got it right. Primarily, liquid assets can be disposed of quickly and with ease. This aspect is known as negotiability. Secondarily, such disposal must not reduce the capital amount you hold. In other words the sale value and the market value must be one and the same. Your bank balance of X amount can be withdrawn as X amount unless the bank imposes any service charge. However, in the case of real estate when you dispose you will do so discount to the market, which is sale value less than the market value. So bank balance is a liquid asset while real estate is not.
Type of Liquid Assets
On the basis of scale of liquidity I am jotting down several types of liquid assets, to enable you to take right decision in making and disposing investment:
1. Cash-in-hand: This relates to currency & coin that you have in possession. This is the most liquid ones you have. In every country the national currency is the legal tender while currencies from other countries are known as Foreign Exchange holdings. Foreign currencies are converted to local currency via Foreign Exchange market. Generally
U S Dollar is the base foreign currency for international travel and transactions
2. Cash-at-bank: You can have cash at bank in a savings account or a checking/current account. Balance in the latter can be withdrawn on demand or by writing a cheque. Generally, savings account balance can be withdrawn on demand, but some banks such as HSBC restricts the withdrawals to once a week
3. Un-utilized balance in Debit card: Any balance not withdrawn so far from your debit card is ranked third in our liquidity scale. You can swipe it anywhere or present over the counter and draw out money. I must caution you about an erroneous impression many of you have about credit cards. Unlike debit card, credit card has no liquidity in-built. It only helps you to finance your purchases out of the issuer’s money and not yours
4. Mutual / Unit Trust fund: Your mutual/unit trust account is ranked next in the liquidity scale. You can give notice generally one day, and withdraw an amount from mutual / unit trust account that lie to your credit. However, if you wish to take out the full amount your account need be closed prior to such withdrawal
5. Money Market fund: Similar to the mutual in terms of liquidity, money market funds differ in terms of volume and value. Generally, you are required to give notice before effecting any withdrawal
6. Surrender /Cash value in Life Insurance Policy: As you continue to pay your premiums on the life insurance policy, it collects a pool of money and after a certain period it begins to be marked as surrender or cash – value. This amount can be readily withdrawn or be pledged to a lender for a personal finance
7. Treasury Bills: Though Treasury Bill is considered as a guild edged investment with high degree of liquidity it suffers from a snag. Depending on the market movement for short term funds it will be quoted either premium or discount to market value. Good times you get premium; bad times you get discount. Hence, there is an equal chance of losing part of the capital stated on the face of the bill
8. Government Bonds: Similar to Treasury bills in price movement; yet, Government bonds do so in wide margin. Assuming you got the bond at 5% interest rate and the current rate of interest is 7% then the bond’s capital value will be reduced. Never the less Government bonds give you safety, guarantee and above all liquidity
9. Liquid Shares in Stock Market: Although there is huge volatility in the stock market, any shares that you hold which is traded frequently in the market can be counted as liquid asset
10. Amount due to you via Legal / Admin process: This is the last item in our liquidity portfolio. If there is any court order for damages payable to you or any award made say in the case of partition tantamount to be a liquid asset arising from legal process. In similar fashion business persons sometimes get grants or tax refunds that are construed as liquid asset arising from administration process.
Before you make an investment in or dispose of any liquid assets, you must ensure that you maintain cosmic balance. Cosmics are aspects that are beyond facts & figures but still influence the conduct of your finance and investment; cosmics reside in every individual and by extension in everything he is engaged in generating finance. If you understand your cosmics you can develop a right mix of liquid assets in your portfolio.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Finance, Investment
Posted in Business, Cosmics, Finance, Investment | No Comments »
Friday, January 6th, 2012
Whatever business you are engaged in, your success depends on a single most factor: Business Location. You would have read about several businesses shuttering their doors after few months of existence due to location issues. Choosing the right business location is a sine quo non in business process. Here are ten tips for doing that:
1. Traffic: As you know traffic relates to the number of people visiting and walking around a location for business transactions, window shopping or just for fun. Out of the traffic a certain percentage gets translated into real business transaction. The rest creates a pool of admirers or by-the-mouth promoters who spread good word around about a location. This helps business generally in building clientele. Hence, you must examine the quantum of traffic before you zoom in at a location
2. Business Potential: Evaluate economic trends in and around the area where you wish to locate. Is the area growing in terms of economy? It is no point you locate your business in places where there is no apparent growth. Still more important is the volume of business that is being done in the locality. For example, New York remains the best dreamed for location for any type of business
3. Area: Ascertain what kind of area you are getting in. If you go for hustle and bustle the location must be in the centre of city where you have more business rolling in. If you prefer silence and serenity an exclusive location gives you that added feel. Day to day business needs a location where several businesses are located in same area bringing more traffic and more deals. On the other hand if you are running wholesale business or industrial products you must search for a location in the periphery of city
4. Convenience: This is a multi-faceted factor. You have to appraise whether the location offers convenience to your employees, customers / clients, suppliers and the public. Convenience depends on several issues, chiefly, ease of approach to the location, conducive environment and availability of alternate routes in case of any emergency. Customers prefer to do business where they feel comfortable. For example they prefer a business that provides adequate parking facility with security
5. Transport: This factor relates to goods moving to and fro the business location. If you do not have a separate warehouse your current business location must be fitted with a store that is equipped to receive and despatch goods. When bulk good arrives from a supplier you need sufficient facilities to un-load, sort out and store these in orderly manner. Delivery of goods demands the same features with an add-on: you have to do this in timely fashion without any delay
6. Restrictions: Ascertain the type of restrictions, if any, that prevail in the location. Restrictions work in different ways. Begin your survey with zoning rules that restrict certain business activities and then proceed to local area rules regarding transport, parking, hours of business etc. If you eye a location in a shopping mall or supermarket, you have to check with the management regarding rules of business conduct. Finally, you must ensure that safety and security rules covering the location could be adhered to by you easily
7. Amenities: While convenience relates to the ease of business process, amenities are important for human welfare. You must tick the type of amenities available and the quantum from either the local authority or the management of a shopping centre. Amenities include, provision of water, sewerage, waste disposal, fire exits, fire hosts and many others. Additionally, you must review availability of watering holes where visitors can have drink or coffee unless you are going to provide in-house services
8. Reputation: Measure the fame and note of a location carefully before you do anything. Does this location is a reputed one where people want to do business? Many people get attracted to a particular location or shopping centre due mainly to its reputation and goodwill. Moreover, you have to look for competitors in that location. If they are doing well there is no reason why you cannot. Some locations are famed for a particular trade. For example, Wall Street is famous for finance. Therefore, if a location is the one most appropriate for your type of business then grab it
9. Cost: Finance is the ultimate arbiter. Can you afford the cost of having your business in this location? Check what the price of the location is, if you are buying it outright. For rent or lease see the amount of down-payment, deposit and monthly rentals. You have to find out the cost of amenities and convenience including parking facilities. You are not just buying a location you are taking the entire suite of the eight items described above.
10. Cosmics: Why cosmics? You will ask me. Yes, you need cosmics indeed. So far we have been concerned with utility aspects; now it is the turn for aesthetics to play its role. Cosmics arise from you as well as from the location. Your cosmics are aspects residing within you shaping and influencing you and your business though these are un-seen and un-noticed by you. Location cosmics relate to aesthetics residing in a particular location. I recently visited Kuala Lumpur, Malaysia to select a location for a business. After looking at few places I recommended one mall that had brilliant cosmic energy pervading and striking anyone who enters in.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Location, Cosmics, Finance
Posted in Business, Cosmics, Finance | No Comments »
Wednesday, January 4th, 2012
Well, “exit SME enter MSME” might appear as some kind of technological gimmick. Not at all; SME is an acronym standing for small and medium enterprises and MSME implies micro, small and medium enterprises. SME has bowed out from economic parlance; in its place we use MSME as an all-inclusive term covering across the board types of business enterprises. Even though MSME baffles you at first sight you will develop a liking towards it if you know what it is all about and what it does for the economy.
In the Beginning
In 1970s SME as grouping of business was popularised by the World Bank and was immediately pounced upon by several countries to be used in their vocabulary. In USA, Small Business Administration (SBA) was formed to encourage and promote small businesses. A glaring lacuna was the exclusion of microenterprise, a concept originally founded by Dr. Mohammed Yunus, a Bangladesh Social Reformer in 1976. To bring in millions of such microenterprises into the economic system, policymakers in several countries brought in different threshold levels to distinguish between micro, small and medium enterprises. European Union, Africa and India went a step ahead by granting legislative teeth to micro, small and medium enterprises by introducing the concept of MSME in their statue books. Sadly, Americans continued to cling to the SME concept as a catch–all phrase to cover all type of businesses other than the larger ones. Even though SBA recognised microbusiness as a distinct type of business in 1991, threshold levels have not been clearly defined.
Threshold Levels
Let me explain how European Union and India framed threshold levels for easy identification and much needed policy intervention.
European Union
EU employs two way thresholds; one based on employees and the other on either turnover or assets of a business. See the Table below:
EU: MSME Threshold Levels
|
Type of Business
|
Headcount
(Persons up to)
|
Turnover
(Euro Millions)
|
Assets
(Euro Millions)
|
|
Micro enterprises
|
10
|
2
|
2
|
|
Small Enterprises
|
50
|
10
|
10
|
|
Medium Enterprises
|
250
|
50
|
43
|
India
In India on the other hand, original cost of investments in plant and machinery excluding land and buildings is taken as the base in defining threshold levels. India tends to tweak the business into manufacturing and service sectors to bring more relevance.
Manufacturing Business
Micro enterprises Investments less than 25 Lakhs
Small Enterprises Investments over 25 Lakhs but below 5 Crores
Medium Enterprises Investments over 5 Crores but below 10 Crores
Service Business
Micro enterprises Investments less than 10 Lakhs
Small Enterprises Investments over 10 Lakhs but below 2 Crores
Medium Enterprises Investments over 2 Crores but below 5 Crores
Why MSME
Contribution of MSME to the economy is well documented. In USA 52% of the total workforce is employed in this sector. More than that, MSME created about 75% of the jobs in the last decade. In European Union, MSME covers almost 99% of the businesses registered in member countries accounting for more than 90 million jobs created. India boasts about 45% industrial output arising from MSME and about 40% exports generated from this sector. There are 26 million businesses registered under MSME in that country.
Globally, MSME is now identified as the engine of economic growth, fountain of innovation and harbinger of social equality. It brings in a great degree of competition and cheap cost alternative in manufacturing process and service sector. A feather in the cap is its ability to generate large number of jobs with much lower capital. Known as labour intensity, MSME creates more jobs by investing less money. Moreover, MSME is a sector where you can use your cosmics to your own profitable advantages. Cosmics are aspects residing within you shaping and influencing your business though these are un-seen and un-noticed by you. The first step is to identify your cosmics and then to select a sector in MSME so that you can employ your cosmics to succeed in your venture.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, MSME, Small Business
Posted in Business, Cosmics, Small Business | 3 Comments »
Monday, January 2nd, 2012
Greetings for the New Year
Today everyone at work craves for making money, more money and stills more money. But most of them are clueless about how to get more money into their kitty. Let me give you twelve easy ways where you can make that extra money you need very badly while working at a job.
1. Side Business: As a cosmic adviser specializing in business, I believe starting a business is the best way to make money. If you are in a career and wish to cling to, you must think of starting a side business while you continue to work. Of course, you have to contribute little bit of capital, allocate time and energy and be committed to your business while at the same time not showing any signs of neglect towards your present job
2. Freelancing: Get into some form of doing a work on freelancing basis. You can write for the press or do an eBook. Let me tell you my own experience. I was a banker once and started to write to the business press as a freelancer. It did give me three pluses: extra money, learning skills of journalism and exposure to the business circle. However, you must ensure that there is no conflict of interest in doing any freelancing.
3. Teaching: If there is a noble profession it is teaching. Pater, mater, praetor dei goes the saying; that is father, mother, teacher and god. You can enrol as a visiting lecturer or teacher in schools and colleges that run courses in the evenings or weekends. In this way, you can keep yourself updated in your own specialization and get little extra liquidity
4. Blogging: Today blogging is so ubiquitous that you can easily start a blog and host it free with popular services. When you write regular posts you get traffic into your blog. Your blog will be watched and analysed by internet marketers. You can open your blog for advertisements and flash messages. Google offers AdSense, an easy way to make money on per click basis of adverts. Writing blogs brings invitation for you to engage in many promotional activities that easily get you some cheese
5. Creative Arts: If you are blessed with creative talents, it is time you think of making it as a cash-earner for you. Painting, sculpture, drawing, dancing and many others could open doors for you to make use of your spare time in creative outputs and sell these to buyers
6. Internet: One of the key avenues for making more money is the internet. You can get into panels where you can mentor apprentices in your specialization, enter into internet polls, or be a member of panels in market surveys. On the other side of the coin, if you are an IT guy you can develop custom software for users who wish to have their own patent software products
7. Hobby: In early days a hobby is where you spend time and money and get prestige say as a stamp collector. Today you can turn the same hobby into garnering more money. Rare stamps, coins and currency notes fetch huge price. On juxtaposition stands faulty currency notes where the fault is originated by the issuing sovereigns. Such notes fetch at least hundred thousand dollars
8. Sit & Earn: This is the plum area. Initially you have to spend time and energy in developing something like a patent or process method which you can allow buyers to make use of it on condition of paying a royalty to you
9. Disposing Investments: If you have no guts and patience to do any of the above, look into your financial history. There may be few investments made that lie without being noticed. Dispose such investments and make quick money. Alternatively, you may have in your drawers old pass books that have credit balance. Take these to the issuing financial institutions and close and take the cash out
10. Chasing Debtors: It is time for you to speak to those who owe you money and get some part or if possible full payment
11. Sell Excess Assets: Look at your home & garden. You will have several items that you no longer use or needed by anybody. It can be table; chair or a standalone computer, anything that can be disposed would bring some liquidity
12. Consult: Nothing works for you; then start to consult others. I have seen even top professionals who worked for the US Government when leaving office declare themselves as consultants. Many of them join think tanks as part-timers or on-call consultants or simply remain un-employed. Once in a way they get breaks that set them for their rest of the life. May be you could be one of them.
Whatever you do try to understand and evaluate your cosmics so that you can employ cosmics to your own advantages. You know, that, cosmics are aspects residing within you shaping and influencing your career life throughout. One way of harnessing cosmic energy is to wear a suitable gems & crystals that bring you wealth and fortune.
Cheers,
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Finance, Gems & Crystals, Personal Finance
Posted in Business, Cosmics, Finance, Gems & Crystals, Personal Finance | 7 Comments »
Tuesday, December 20th, 2011
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/
Tags: Business, Business Model, Cosmic Balance, Cosmics, Finance
Posted in Business, Cosmics, Finance | 1 Comment »
Monday, December 19th, 2011
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/
Tags: Business, Cosmics, Finance
Posted in Business, Cosmics, Finance | 1 Comment »
Thursday, December 15th, 2011
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/
Tags: Business, Cosmic Risk, Cosmics, Finance, Small Business, Strategic Risk
Posted in Business, Cosmics, Finance, Small Business | 4 Comments »
Tuesday, December 13th, 2011
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/
Tags: Business, Business Idea, Cosmics
Posted in Business, Cosmics | 2 Comments »
Monday, December 12th, 2011
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/
Tags: Business, Cosmics, Finance, Personal Finance, Small Business
Posted in Business, Cosmics, Finance, Small Business | 2 Comments »
Thursday, December 8th, 2011
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/
Tags: Business, Cosmics, Finance, Microenterprise, Small Business
Posted in Business, Cosmics, Finance, Small Business | No Comments »
Monday, December 5th, 2011
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/
Tags: Business, Cosmics, Personal Branding, Small Business
Posted in Business, Cosmics, Small Business | No Comments »
Wednesday, November 30th, 2011
Debt trap is now strewn all over business enterprises. Small businesses, large ones and even multi nationals have unwittingly got into the debt trap, modern day version of apocalypse. Debt trap occurs when a business gets into a vicious circle where it borrows more money to pay up the debt already owed. Finally the burden of debt brings in disastrous results for the business, society and for the economy. So how business can avoid disaster and get out of debt trap. Here are few suggestions:
1. Contact the banker/financier for working out the current loans. Work out is a method where banks acting on their own re-schedule loans and offer concessions regarding interest payments, declare moratorium over whole or part of the accumulated interest and grant flexible terms on amount and timing of instalments due
2. Go for re-structuring of the current debt on your own. This method is different from the first one as you will be taking initiatives in managing debt and submit your proposal for negotiating the terms of the current debt. Of course, such re-structuring must have the approval of the banker/financier
3. Replace expensive finance with cheap finance. In most cases business, particularly small business tends to borrow more when the interest rates are fairly high. Interest rates generally move up and down depending on the state of economic growth. During high economic growth interest rate also hovers in high zones. Business, encouraged by positive atmosphere prevailing in the economy blindly ties up with debt at expensive rates. When economy moves into recession interest rate falls into low levels. Therefore during recession small businesses must make an effort in replacing loans booked at high rates with cheap alternatives
4. Talk to your creditors who have supplied materials for business operations. You can ask them for an extended time period to pay out the amount owing. In the case of expense creditors, generally this concession is not available. For example, electricity companies do not negotiate on arrears and tend to cut supply lines. You also have a tall order in negotiating with statutory creditors such as Revenue Department
5. Reduce operational cost as much as possible. I am afraid you cannot do this overnight. But if you put an effort you can cut corners in operational cost without much harm being done to your production line
6. Dispose fixed assets that are no longer wanted. Many business enterprises dump huge amount of finance buying up assets without doing a proper evaluation as regards to their usefulness; added to this, business generally does not bother about re-sale value of fixed assets at the time of acquisition. Hence, you have a double whammy: on one side the economic value of the assets in the current scenario is less and if disposed it could fetch much less than the original cost of purchase. You have to take hard decision and sell at some prices even though you have to take loss eventually
7. Budgeting is your weapon of mass protection; you should put in operation budgeting with a short term roll-over. I suggest that the budget exercise is rolled over every month till such time you are out of the debt trap. You must budget both the income as well as expenses on equal keel. You have to put extra effort in increasing sales revenue and pitch on chasing receivables to get the cash flow in
8. Finally let cosmics be your pull and push factor. Cosmics are aspects residing in every person and as an extension in every business. Cosmics can function as pull factor when you go for negotiation with your banker/lender or that particular customer who is promising you a big order. Cosmics play the push factor when you are impelled to change your business outlook, make a face –lift, bring in courage and confidence to weather the storm and at last succeed in getting out of the debt trap.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Debt Trap, Finance, Small Business
Posted in Business, Cosmics, Finance, Small Business | 19 Comments »
Tuesday, November 29th, 2011
Today large amount of finance is tied down as capital expenditure in business enterprises. The percentage of capital expenditure is huge in utility industries like oil and gas for valid reasons. Elsewhere in service industry and small business enterprises there is a rising trend in capital expenditure without justification. Let me give you do and don’t on how to control capital expenditure in business:
What is Capital Expenditure?
Before charting a road map of do and don’t in capital expenditure, let us first find out what exactly fits the term capital expenditure which is often shortened as Capex. Any purchase & improvement of land, purchase & construction of buildings, purchase and installation of plant & machinery, tools & equipments, furniture & fittings come under the definition of Capex. These assets are classified as fixed assets in finance. After the initial phase of acquisition, fixed assets are to be maintained; this results in revenue expenditure. When it is necessary fixed assets are to be overhauled; this results in Capex once again. There are similar words used in business meaning overhaul: improvements, upgrades, refurbishing, extension, and face-lift are some of the most common.
Do List
1. Undertake Capex where the useful and economic life of the underlying fixed assets can be extended. Assume you have a plant and it is almost worn-out; if you can extend its usefulness might as well spend money to do so rather than buying a new one
2. When you experience rise in your scale of business operations you should sanction relevant Capex
3. If there is an industry wide use of a particular fixed asset that you do not possess then it is better you approve Capex. A good example is the acquisition of state-of-art technology in media and communication
4. When your competitor acquires a specific asset that can tip the scale in his favour in terms of sales and operations then it is advisable you do Capex urgently
5. If you have a drawn-out Capex plan to be rolled over a number of years, you must undertake relevant expenditure even though such Capex is not urgent. A good example is re-furbishing done in tourist hotels and cabanas. Often this type of expenditure is known as planned capital expenditure
6. Replacement of fixed assets could also be necessitated by events where the business has no control. An example is loss of fixed assets caused by fire, theft or natural disaster
7. Go for Capex where the assets you intend to acquire would generate cosmic energy which in turn can be translated into enhancement of business image, improvement of staff morale and finally growth in business prospects. This we call cosmics. As you are aware cosmics are present in everything you do including your business
Don’t List
1. Never approve Capex where you are adding fixed assets that cannot be used in near future; this superfluous acquisition can be seen in many businesses that fail within a short period of their opening
2. Any wasteful Capex must be avoided absolutely. Most small business enterprises get into this situation because they do not evaluate the purchase decision carefully. More than that they do not plan out the purchase of fixed assets in advance
3. Never acquire un-productive assets; once again this is one of the main causes in failure of small business. An ostensible example is the construction of parapet wall and other security paraphernalia that are not meant to aid in production and operations
4. Do not be overly carried away by value of aesthetics in business; it is acceptable that you should beautify your environ in the business place. But always look at the trade-off between utility and aesthetics
5. No Capex if that only serves only your ego. Grandstanding is good in politics but never in business. If you are egoistic, you will squander your finance, let go of your business opportunities and finally compromise your future.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmic Energy, Cosmics, Finance, Small Business
Posted in Business, Cosmics, Finance, Small Business | No Comments »
Monday, November 28th, 2011
Most businesses in United States and Europe are not doing the right thing right compared to their Chinese counterparts. Let us see where these businesses are heading to:
1. Do the Wrong thing Wrong: Thousands of businesses mainly in the small business sector in United States and Europe are getting into corner by doing wrong things in wrong manner. Examples galore. Let me give three areas of disaster:
1.1 In Finance businesses have ramped up debt equity leverage into un-sustainable zone; at very high interest rate to foot. During recession businesses cannot service the debt and about 75 % of them are in some stage of receivership
1.2 In – house management of operating cost is in shambles, causing break-even point to go up. As sales starts to dip a business is unable to cope up with the current cost level
1.3 Meeting delivery schedule has become a haranguing experience. Most small businesses cannot stick to the order schedules and are facing the un-palatable situation of losing buyers
2. Do the Wrong thing Right: This trend is catching up in several businesses in the North Atlantic region. These businesses are doing the wrong thing; but there is a saving grace: they do it in right manner. Shifting production location is one of the key pointers. For various reasons these businesses have shifted major part of their operations outside the region and have gone into countries like Turkey. On the one hand they have deprived their nationals employment opportunities, and on the other they have chosen well as Turkey is now being added to BRIC list of fast developing industrial giants
3. Do the Right thing Wrong: This is somewhat better than the above two modalities; we find many small businesses tend to do the right thing albeit in wrong manner. Consequently the expected results are disappointing. Good example is the investment made in undertaking ingenuous research in the fields of bio-technology and food processing. But before the businesses could put these into operationalization and garner new business opportunities, the research methodology or process gets leaked into hands of industrialists far away from North Atlantic region. The beneficiaries on the other side employ the methodology/process and mass produce products even at cheap prices. All the fuss about copyright, patents and WTO regulations just disappears like smithereens
4. Do the Right thing Right: At present, I see businesses in BRIC countries get well-versed in doing the right thing right. No wonder the tip of balance is slanting in their favour. A good example is how business houses in these countries are churning out consumer items in cheap prices and slowly edging upwards to the manufacture of capital goods as well. These businesses evaluate not only their economic assets but understand and use their cosmic energy in order to raise their operational level up. Surely, cosmics have given them that extra push that made today’s China a giant in industry and commerce. Unless businesses in United States and Europe are alive to this situation North Atlantic region would fast become an importers’ heaven.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Small Business
Posted in Business, Cosmics | 3 Comments »
Friday, November 25th, 2011
You have a got a business idea. You think that it is really great. Having mulled it over, you feel that it can be translated into commercial success. All the while, it is you and your idea that mattered. Now comes the third party angle. You have to find someone to look at your business idea and evaluate it for you. Here are persons whom you should approach:
1. Charity begins at home so does evaluation of your business idea. Firstly, you sound your family about it. Your wife is an important resource person who, knowing you very well, can give an informal assessment. She may not be a business person but she possesses insight into how you work and what will work for you. Next you should turn to your children who are adults and can understand many things in proper perspective than you. The reason is that you are emotionally attached to the business idea you have developed whereas they can bring a rational approach to bear upon it. When discussing within family never load them with facts and figures. Just explain them broad principles and major matters
2. Secondly, you must talk few of your relations over. You can choose to speak to one who has succeeded in business or career. Additionally, you must also have a rendezvous with a relation who is more of academic bent. This way you can mesh academia with practical life; a method often brings you a via-media approach. During this discussion you should wait till they finish and pose them questions, taking the stand that your business has definite fault lines. Why do I say this; if you profess loyalty and possessiveness towards the idea, your relations would often be silent and would not venture making any adverse comments
3. Next in your appointment schedule are close friends who could come from different backgrounds: in business, career, academia, government service, military, social service and so on. When you meet them you explain your business idea and give the pros and cons and await their own appraisal and analysis. You should ask searching questions that include benefit and cost; risk and reward, limitations and growth etc. As you proceed ask them to look at your idea from neutral ground and prod them to give you more qualitative comments
4. Then comes the professionals; you must approach accountant, company secretary, lawyer to give their feedback on your business idea. Once again you must adopt the approach I gave you in dealing with your family members. Give them facts and figures as well as broad principles and major matters surrounding the business idea
5. In the next segment you elect to choose either your banker or venture capitalist for an informal chat. These guys are well versed in seeing, reading and evaluating great number of business proposals and would be a big source not only in critically examining the idea but proffering advice and assistance in translating it into commercial success
6. Finally, you must get someone who can understand you, your business idea and your cosmics. However much bright and usefulness your business idea is, its successful transformation depends on how you understand and evaluate your cosmics. Cosmics are aspects residing within you shaping and influencing your business though these are un-seen and un-noticed by you. If you know cosmics well, you can employ these to your own advantages. For example, let us assume that your cosmics support you in food processing industry and your business idea is on data processing industry. So your success in transforming your business idea stands alone without any support from cosmics within you. No wonder why so many bright business ideas falter in the market.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Idea, Cosmics
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Wednesday, November 23rd, 2011
So you have an appointment to meet up with your banker tomorrow regarding a proposal you have sent him lately. You are wondering what kind of response the banker would give. There are for ways in which your bank responds to your proposal. Here are the responses:
1. YES: This is the one you are dreaming about, a big positive nod from the bank manager with a thundering yes. If you are one of the lucky guys whose dreams come true very often you can bank on this response as the most feasible one. Then there are businessmen, quite a number of them running small businesses that have the kind of cosmics supporting them tend to get a yes answer. Whatever the manner in which a proposal is made, you should have necessary requirements to get a yes from a banker. Some are related to your finance, some are personal some are aspects no one can explain about. The last one intrigues you always. You would have had this experience when you saw the most qualified is not the one who gets the job. This is what we call cosmics, aspects that are residing within you shaping and influencing your business throughout
2. Yes, But: Unlike the previous response, “Yes but “, is not very stronger. Nevertheless, still it is the green light. Bankers tend to give this answer where they feel a bit of itch or snag. They have some concerns and they will drop these one by one like bombs falling during war time. During the discussion banker would dwell upon the easiest thing they can corral; that is collateral. Once you elaborate the type of collateral you are furnishing him then he would jump to the next C factor: cash-flow. Once again you will be at pains to explain him how you can tweak cash-flow to suit to his requirements in terms of debt- servicing. From here onwards the trajectory to get a yes is not so steep. You can get around his “But” to be dropped, provided you handle the situation well with facts and figures. Of course, your C-factors, that is, capital, cash-flow and cosmics all should work harmoniously
3. No, Yet: On the face of it, “No, yet” response appears to be a negative one. It is not so. A banker tends to give this response where he cannot say an outright no. There are reasons for this not so negative response. He fears that you might leave him or he knows that he financed similar proposal that is not doing well or he feels that if you are genuine about what you are asking for you can modify your proposal. When this response is made do not despair but use the window of opportunity to explain about your commitment to stick with the proposal as amended mutually between you and the banker. You must assure him that if there is a case of any previous failure the bank should not apply blanket treatment to your proposal. You have to convince him that you are able to address all his concerns. From this “No yet“, answer you must get double promotion to a strong yes. If this is not happening then you are to be blamed because you have failed to understand how your cosmics work to your advancement. A simple example is that you went to the bank in casual dress rather than in formal manner
4. No: This is the one you dreaded most and you have it now. Poor soul. What can you do? Fly in rage and blame the banker for economic recession; blame your accountant for preparing figures that could not withstand tests by the banker; or blame yourself. This is not a defeat though. You can re-make the proposal to this banker or another. You can improve your business. You can change your outlook. You can understand and evaluate your cosmics to succeed next time.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics
Posted in Business, Cosmics | No Comments »
Tuesday, November 22nd, 2011
Business partnership makes profits and such profits must be divided among partners in an equitable manner. Despite this moral rule most partnerships divide profits equally. But does this equal division of profit is equitable or justifiable? My analysis and recommendation is given below:
1. In a partnership business partners contribute in two ways: one is giving part of their money as capital; other is demonstrating interest in the business. However, there is no reason to expect that every partner will have the same level of interest. Some partners take active part while there are instances where you see a non-active sleeping partner. Let us assume a case where you and your spouse are partners; your spouse does not actively engaged in the business but minds the hearth and bed at home. Can you divide the business profit equally? Even if your wife has contributed equal amount of capital it is not possible businesswise to divide profits equally
2. There are instances where partners contribute different amount of capital to begin with. In this case nobody can insist that partnership profits must be divided equally.
3. Partners open two accounts in the books; one relates to the capital and other one is an operating/current account. Normally capital account is fixed. At the time of appropriation salaries or commission payable to partners are credited to the operating/current account. Even though partners contributed, let us say, equal amount of capital the current account balance may vary from partner to partner. Some partners withdraw money and others leave it intact. A partner who has left more money in this current account, contributes indirectly to the capital funds of the partnership. Therefore, it is not morally right to divide profits equally. My argument is that both capital and current account must be augmented to arrive at a consolidated amount and profits should be shared in the proportion of the present capital funds available rather than on the original capital contributed. Alternatively, the capital account must be made fluctuating and the partners must be given a right to transfer any surplus available in the current account to this fluctuating capital account. Thereafter, profits must be shared in the proportion of the fluctuating capital account balances
4. Yet another issue is about compensation payable to partners. In many partnerships, this factor is never taken into account in dividing profits. For example, a business must employ someone to do the sales. If you have a partner doing sales then he must be paid allowance/commission. Assume there is no such compensation is paid; in that case it is against all the principles of business to divide profits equally
5. You can have several partners; but the real operation is minded by one or two partners. In case there is a managing partner, he must be paid emoluments in correspondence to what the market pays. Assume that he is paid a meagre allowance, can the partners decide to allocate profits equally. It is a cardinal duty to pay man’s wages in a proper manner
6. Not every partner can bring business or nurture customers and clients. Among partners there could be one person who holds a magical wand. He has the charisma and personality to get going with people and situations; a kind of a doer. He possesses cosmics that attracts the customers and turn sales opportunities into fruition. Such partner has cosmics that shape and influence partnership business positively. If he goes away the partnership would also wither away. If you are a partner in this business would you insist that profits must be divided equally?
The conclusion is simple. No partnership should divide profits equally but equitably. In the latter case you have to examine the contribution by each partner in terms of capital funds, level of interest and the aspect of cosmics and arrive at an equitable manner in dividing profit among partners.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Partnership
Posted in Business, Cosmics | 2 Comments »
Monday, November 21st, 2011
The difference between buying a business and buying into a business is very simple. When you take 100% stake you buy it. When you take less than full ownership you are buying into it. This rule does not apply to large companies or listed ones. Let me elaborate three ways of buying into a business:
1. Making a Strategic Partnership: This is the time tested method of buying into a business. Instead of taking large portion of the shares or equity you lock in for a 25 to 30
% stake. Before getting into negotiation with the prospective business owners you should evaluate what kind of synergy you will have in partnering with them. You must concentrate upon several aspects chiefly, marketing, operations, human resource, systems and finance. Strategic partnership is only possible where the interest of you and the present owners can tally together. By any chance there is no interest tangent possible between you and the owners then you should not proceed further
2. Floating a Joint Venture: In this case you buy out 50% of the stake of the current owners and morph the business into a joint venture. Joint Ventures often called as JVs, though not very common are very effective means of combining strengths of two parties. Similarly unlike in the case of strategic partnership you would not be wholly concerned with the past performance of the business. It is the future that matters. How the business under a JV would turn out to be is a cardinal question. Such JVs must eliminate if not neutralize any current weaknesses of the business and maximize the future strengths of the business. For example, let us assume that the business order book is fairly seasonal; this is a nagging weakness now. After the JV is floated you must be able to alter that seasonal nature of sales and generate regular orders throughout the year
3. Taking Majority Control: A popular method often sought after by prospective buyers is taking majority stake in a business. Such a majority can come about if you take 51% or more of the equity. To be on the safe side it is always better to take between 60 to 70 % of the equity control of a target business. In this case you have to handle two issues: one relates to what to do with the minority shareholders or owners, the other is to see how you can handle transition of control from the selling party. It is common knowledge that once controls changes hands there would be quite rumbling from the minority. They generally resist changes and fear that the new management might neglect their interest. You have to be ready to face this situation and must make every effort to take them into confidence. You have to treat them equitably as well. The second issue of transition tends to be much tougher. You have got too many irons in the fire. There are parties like customers, creditors, staff, lenders, bankers and host of others who like to be assured that the new management would not act counter to their interest and purposes. Moreover, seamless integration of the business systems prevailing in the target business including finance, operations and marketing into your own systems could be a nightmare.
4. Choice: What is the best way of buying into a business depends on the amount of money you have and the level of contribution the target business could make towards your own objectives. More than anything else, you should evaluate a key driving force. That is your cosmics. It is better for you to choose the appropriate method by evaluating your cosmics. You know, that, cosmics are aspects residing within you shaping and influencing your business throughout. If your cosmics support a simple ownership with benefits you settle for a strategic partnership. On the contrary, if your cosmics dictate that you should go for high risk taking then choose either JV or majority control whichever that suits you fine.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics
Posted in Business, Cosmics | 2 Comments »
Thursday, November 17th, 2011
Business plan is a vital document for any type of enterprise. It serves two purposes: one as an internal guidepost and the other as an external statement of purpose. You can easily prepare a business plan if you follow the seven steps listed below:
1. Look Out: The first step in preparing your business plan is to just look out at the environment. You see what is happening in political, economic and social spheres. You find out what your competitors are doing; anyone is closing shop and any new entry into your field. You watch how products similar to yours are performing in the market. All these can be summarised in two words: Opportunities & Threats. Management analysts place a major emphasis on understanding and evaluating opportunities and threats facing a business. Once you get a hang on this subject you can move on to the next step
2. Look In: This step is all about self-examination; the reverse of what you have been doing in the first one. Here you are assessing how you can respond to the status of affairs prevailing in the external environment. How are you positioned; what do you have; what you should get rid of; how do you optimize pluses and minuses. This stream of activities can be summarised in two words: Strengths & Weaknesses. These two are pitted against the opportunities and threats explained earlier. Once you identify and evaluate your strengths and weaknesses you can find a via-media to maximize your strengths and minimize your weaknesses
3. Set Objectives & Goals: You have already learnt much about external and internal aspects. Now it is time to find out what kind of tools you have to make external opportunities work in your favour while at the same time ensuring that you are not unduly threatened by external forces. Moreover, the tool must ensure that you can maximise strengths and minimize weaknesses. This tool is known as ”optimization of business”. In optimization you begin to set objectives and goals. Objectives are set in broader qualitative terms, for example: business must achieve higher market share. Goals on the other hand zoom in the objective into a specific quantitative measurement. For Example: business, must achieve 25% market share. Objectives and goals vary from business to business. Broadly these cover : Quantum of sale; market share, product quality, product differentiation , customer service, diversification, best practises in managing resources within business including human resource, physical assets and financial assets
4. Craft Strategies and Tactics: Once you have set objectives and goals for your business, you must proceed to formulate strategies and tactics. Strategy is a broad area of approaching the objectives whereas tactics are narrowed down field for you to achieve the goals. As an illustration look at your objective of achieving higher market share; here you prefer to use a strategy of advertisement & promotion. Conversely, your goal of achieving 25% market share is best attempted via a campaign tactic focussing on aggressive marketing. By the time you are in the middle of the campaign surely your competitors follow suit. Hence, the usefulness of this measure is just tactical for the moment
5. Put it in Writing: As you get thorough knowledge and understanding you can put your thoughts in writing a business plan for you. This plan highlights all the aspects covered so far and includes all key facts. Additionally, you include mission and vision, monitoring and evaluation of the business plan, sub-plans for critical sectors such as marketing, operations, human resource, information systems etc..
6. Dress it with Figures: The most difficult step in the process of making a business plan is to reduce everything into figures. You are comfortable with facts, bur when it comes to figures you shiver. Not to worry, you can do as much by trying it alone, or following a standard business template or in extreme cases you can hire an accountant to cast figures for you. Remember figures are necessary as they stand as bench mark for you to do monitoring and evaluation later
7. Time it well: The final step is about time; everyone knows time is in essence; time gives you relief. We call this cosmics. There is time for everything. You have to push your button for business plan on the first day of January, barring any holidays. During January, you get a sense of new beginning and time to sit and think about your business plan. Cosmics of time in making business plan is like Christmas; it comes once a year.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Plan, Cosmics
Posted in Business, Cosmics | 2 Comments »
Wednesday, November 16th, 2011
Capitalism and Rome are not built in a day. It takes quite a while to build up your own business capital. Till such time, you have got to use others money. Here are some tips on using others money in your business. For easy reading, I have categorised using others money in three major phases: Initial Capital, Operational Phase and Growth Stage:
Initial Capital
At the time you start a business you need what we call as seed capital. When you are short of this money you must find alternative sources to supplement this shortfall. Here is a list of such sources:
1. Small Business Corporation. Most countries run a Small Business Corporation that lends portion of your capital in easy terms
2. Venture capital Companies: If you have an excellent business idea that can be turned into a successful venture you must consult with venture capitalists and obtain finance
3. Government Grants: In addition to provide loan capital there are grants made available by the Government Institutions for businesses
4. Informal sources: You can also get initial capital from family & friends on no-cost basis or in concessionary terms
Operational Phase
When you move into operational phase you get receivables and creditors. You will also require a whale of a lot of money for operational expenses such as salary & wages, utility and statutory payments. Here are effective tips:
1. Negotiate very favourable terms from your creditors. These terms should cover bulk discounts, extended period of credit, timely delivery schedule and stand-by measures
2. You should, as matter of fact, encourage cash sales and when you are faced with a credit sale you must ask for an advance; where you are getting bulk buyers on credit terms get some short of deposit from the debtors
3. Obtain a Working Overdraft / Operational Line: Banks generally extend working overdraft/operational line of credit for financing working capital. Your seasonal ups and down in money needed to finance working capital can be smoothened by this arrangement. Furthermore, these credit lines also offer safety valve in paying your operational expenses including salaries, wages and utility payables
Growth Stage
As your business notches up on to the growth stage, your money requirements change in terms of quantum and period. Now you need more money and for a longer duration in order to expand as well as to finance the growth of business. Here are good tips:
1. Go for a Fixed Loan/Term Loan: Generally banks and finance institutions offer term loans for long term capital requirements such as buying into fixed assets or improving existing fixed assets. In some cases you can also acquire new assets as well. In the latter case, there is an alternative in the form of equipment leasing
2. Issue Preferential Shares: These shares may be issued with a stated interest rate and made redeemable on a future date. I recommend the issue of preferential shares over equity shares because preferential shareholders are not entitled to take part in running of a business whereas equity shareholders can control the management of a business
But wait a minute. Do you possess the required cosmics for using others money in your business. If you have the right cosmics you can prosper on others money. What are cosmics? Cosmics are aspects residing within you shaping and influencing your business though these are un-seen and un-noticed by you. So first and foremost check whether you have supporting cosmics that enable you to use others money successfully.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmics, Others Money
Posted in Business, Cosmics | 1 Comment »
Tuesday, November 15th, 2011
Most small business enterprises are run without a fitting business logo. When you ask a small business entrepreneur why he does not have a logo he would have a stock reply: I have no time to bother about petty affairs. More than a big business, it is the small business that requires a logo badly. Let me enumerate chief reasons why small business needs a logo.
1. Representation: A logo is similar to an owner or an employee. It represents small business to the people in the outside world. A business logo is ascribed living qualities. In commercial activities a business logo is just a party as the owner and his staff
2. Recognition: For a small business, logo functions as a brand. Commercial enterprises immediately recognise a brand; so do the customers, creditors, lenders, bankers and other business actors. A successful small business needs an appropriate business logo; vice versa, to succeed, a small business needs recognition and a business logo
3. Identity: A logo for a small businessperson is basically an identity card or a passport. He can just show the logo and gain entry into many places. Besides, a logo is unbreakably connected with the name of the business and the staff employed therein
4. Image Projection: Undoubtedly, a business logo projects the image of a small business to the outside world much more effectively than promotions and advertisements. It is true that you need both for initially getting into the attention of customers and clients. But once you achieve your goal in getting attention sustaining it requires a well-designed logo
5. Communication: Logo is not just a symbol, form, or lines and letters; it is more than that. A business logo essentially is part of business policy. It communicates the mission and vision of the business; its policies and practices; its commitment to uphold ethical principles of trade. Moreover, business logo conveys company strategy and directions to parties dealing with that business
6. Uniqueness: Every logo is unique, true enough. Yet there is something else in uniqueness for a small business. One with a well-crafted logo stands out among large numbers of small business enterprises; besides it automatically gets up-graded into the class of big business
7. Generates Responses: What kind of a response a logo elicits from those who look at it. Every day you see thousands of business logos. So what is the fuss about a logo doing something for a small business? The answer is very simple. For a small business a logo gets feelings of attachment, sense of appreciation, positive emotions, and rational calculations and finally “let’s try out this company” attitude in the onlookers
8. Transcends Time: Most business logos can outlive its creators and / or users. In the case of a small business it is doubly important because in small businesses there are more chances of changing hands or rapidly being wound up. Whatever happens, a logo transcends time and is passed into new owners and successors like a baton in a relay race
9. Fountain of Cosmics: Logos have inherent cosmic power; you can feel this cosmic power when you look at famous business logos; Apple, Coca-Cola, Google, IBM, Lego, Microsoft; all these are fountains of cosmic energy. These logos not only generate cosmic energy but translate it into cosmic power in the form of sales, profit, goodwill and a groundswell of positive feelings and emotional attachment to the underlying products. Conversely a business logo that is designed without taking into considerations of inherent cosmics could turn out to be very destructive to its owners and users. A good example is the Nazi Swastika that finally destroyed everyone connected with it.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Logo, Cosmic Energy, Cosmic Power, Cosmics, Small Business
Posted in Business, Cosmics | 8 Comments »
Monday, November 14th, 2011
As a business person your main concentration is focused on improving your business and improving your cash-flow. There are so many blogs on the subject of cash-flow. Let me be different and give you a functional model on how to improve your cash-flow.
In a business there are three major functions: Sales, Operations and Purchases. Let us do reverse engineering and start with the sales function, meander our way through operations and arrive at the purchases.
Sales
1. Look at your sales model; you have cash sales which is now becoming something rare due to recession. In cash-sales you raise invoice, receive cash and deliver goods and that is all over. As a matter of prudence, you should give incentives to your customers who pay by cash. Customers would give currency, bank cheque or credit card. If the sales are on credit card it is the same process but the merchant who services your credit card takes out a portion of your sales income. You should negotiate with your merchant better terms for you. Whatever the form cash-sales help improving your cash-flow tremendously
2. A credit sale is a different ball game; you part with the goods but the payment is received after a lag of time. Here you have to control the following areas to improve your cash-flow:
2.1 Never overtrade with a single customer; broaden your customer base
2.2 Do not stick to uniform credit terms; be flexible in extending period of credit depending on the customers and situations
2.3 As you deliver goods see the bill/invoice is also delivered; for large amount insist on acknowledgement
2.4 Segment your customers into: fast payers, prompt payers, slow payers and non-payers. Always offer rewards to those who pay well before the due date or promptly on due date. As regards to the slow payers send them reminders at-least couple of weeks before due-date and keep on chasing after the due date. You should not deal with the non-payers except in getting your money back
Operations
Operational expenses can take two forms: internal and external; internal relates to payment of salaries, wages etc. while external covers areas such as utility and other bought-in services. Follow the guidelines to ensure healthy relationship with staff and expense creditors:
1. Pay employee salary and wages on the dot
2. Pay external bills only on the due date; never pay before it falls due
3. Get whatever discount you can have on prompt payment of the external expense bills
Purchases
Like in sales purchase is a critical area where your money is tied down. Ensure the following in improving your cash-flow:
1. Plan your purchase function very well; time of purchase and level of purchase should correspond to smooth functioning of your production/process department. Over-stocking is as bad as non-availability of input goods as and when required. Institute good inventory management system and ensure that no waste, theft or leakages take place
2. Negotiate best terms of your purchases in price, delivery and related matters
3. Monitor payables so that you are never behind payment
4. And you must make payment only on the date due or just prior to the due date in case of holidays etc..
Cosmics
In addition to the above three major functions, cosmics should also be taken into considerations. The above three are mechanical and business like functions. Cosmics, on the other hand, work internally and outside the realm of mechanics. You must make your office bathing in cosmic energy. There are several measures that you can take to harness cosmic power; one easy way is that you can keep gems & crystals to get that extra zing. Some of the gems & crystal recommended include: Garnets in several hues: chiefly red, orange, yellow, pink and violet; green coloured Aventurine, Calcite and Tourmaline.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Cosmic Energy, Cosmics, Gems & Crystals
Posted in Business, Cosmics, Gems & Crystals | 3 Comments »
Friday, November 11th, 2011
Of late, partnership form of business has become vogue in several countries. Partnerships are being formed straddling into several economic sectors including trade, industry and agriculture. Let us find out why you need a business partner now whereas you have been going solo for all these years.
Firstly, let me define what partnership is: A partnership is basically an arrangement between two or more persons who will act together in furthering their mutual interest in any trade or venture or business with a view to share profit or loss. A cardinal principle in partnership is that every partner is bound by the mutual interest which is sacrosanct. We call this as common interest. Therefore, it behoves partners to show interest in a partnership and avoid any conflict of interest. However, there is no reason to expect that every partner will have the same level of interest. Some partners take active part while there are instances where you see a non-active sleeping partner.
You need a partner for your business due to the following reasons:
1. Capital: In majority cases partnership is formed because one person alone cannot contribute the entire capital requirements of a business. Lack of capital is a perennial problem impacting initiation and growth of businesses. Even though we see sole proprietors abound in many sectors their scale of operations is fairly limited. Their growth opportunities are stunted. Therefore, it is better to bring in partners who can contribute additional capital requirements
2. Fixed Assets: There are instances where you require a property in the form of land or building for the conduct of a business. Instead of blocking your money you can co-opt the owner of such land or building as a partner in the business. Sometimes you may require a particular plant & machinery. Here again without resorting to bank loan or leasing you can persuade the owner to be partner in your business
3. Knowledge: Another reason for formation of business partnership is specific knowledge required by a business that is lacking there. In this regard let me submit to you two issues: One is that we are today in what we call as knowledge based economy. The other is that entrepreneurship is not necessarily knowledge based. You are an entrepreneur. If a particular knowledge base is vital necessity in your business then either you can resort to hire it or bring in the guy who has such knowledge as your partner. In highly competitive areas such as technology it is better to form partnership rather than opt for hiring
4. Skills: Yet another reason for bringing a business partner is skillset. You are running a business on government tenders and you are often confronted with your inability to liaise with government officials. You are too pre-occupied with the nitty – gritty of the operations and have not developed the liaison angle. Sincerely, you do not like to hang around with scheming officials. In this case you are well advised to get a guy or gal, the latter the better, to liaise with those who work behind the panelled tables in government departments
5. Connections: This is one of the smart reasons to take in that new partner who has wide contacts in the sector where you do your business. Contacts not only give you real business they can also give you what we call as business leads, that is, hints of potential business elsewhere in the sector
6. Companionship: A behavioural reason forming partnership is the need for companionship with another person for the sake of having someone else in a business. In some cases companionship turns out to be too vital that, business collapses without one. Companionship canopies contribution in areas such as business advisory, lightening business load, helping out in legal and administrative matters or simply just to be around. Some businessmen prefer an elderly person while some like to have a fair lady around
7. Cosmics: As you know cosmics are aspects residing within you shaping and influencing your business though these are un-seen and un-noticed by you. If your business demands cosmics that you do not possess it is better for you to get someone else who has this cosmic energy. For example in service and entertainment industry, you need a partner who has the charisma and can captivate hearts and minds of your customers by his mere presence.
Muthu Ashraff
Cosmic Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
Tags: Business, Business Partner, Cosmic Energy, Cosmics
Posted in Business, Cosmics | 1 Comment »