Business Solutions – Dutch Uncles

Personal Finance Habits an Entrepreneur Should Develop

Monica Behura — Sun, 28 Feb 2021 00:35:03 +0000

No matter how many millions or billions an entrepreneur stacks up, without a solid financial planning in both personal and business front, he/she could end up like Anil Ambani. This pandemic of 2020 has taught us to live an economical life, cutting out the unnecessary stating that frugality is the word for future. Therefore, a prudent finance growth plan, with an imprint that less is more, and that money will multi-fold, securing the future even in uncertain times apart from growing the wealth will be key.

With all the money in the world, a net worth of $87.6 billion as of 2020, Warren Buffett, CEO, Berkshire Hathaway, one of the richest men on earth is well known for his frugal lifestyle. It’s a known fact that Buffett lives in a modest home he bought in 1958 and drives his old Cadillac. He never had the desire to own multiple homes or a fleet of cars. He saved his penny to earn and grow his wealth to billions only to donate 99% of his riches to philanthropy.

Financial planning is an exercise that keeps your business growing in terms of profitability and revenue growth. It makes an entrepreneur’s ability to predict, foresee and plan for potential roadblocks, and helps in evolving strategies to overcome the bumps.

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By looking for opportunities to get more value at a lower price like buying quality merchandise when it is marked down.

- Warren Buffett

Devise your Personal Finance Plan

Personal financial planning not just involves investing money, there are various facets to it, that is inclusive of growing wealth, money goals, wealth protection, and retirement planning.

Money Goals

Having written financial goals for the targeted month or year- either short or long term to improve personal wealth by a certain amount or percentage, gives a direction to your actions. Scattering your wealth in different baskets helps to grow your money as in stocks, real estate, bonds, mutual funds, fixed deposits, etc.

Budget spending and plan savings

Budgeting one’s spending and savings is a must. Experts say when you are mindful of both these habits, tracking these will help contribute to wealth growth.

Disseminate risks with multiple income plans

With this strategy, entrepreneurs are earning money through multiple businesses and reaping interest incomes through various investments, and with capital gains. In this way, entrepreneurs are diversifying and lowering their personal financial risk.

It is just like one’s business diversification. For instance, recently Electric car maker, Elon Musk invested $1.5 billion on Bitcoin, a calculated risk that could yield him either billions more in the foreseeable future or the money could tank. Either way, it is another revenue stream, an additional profit opportunity.

In growing one’s wealth, the entrepreneur needs to consider his objectives, investment timelines, his tolerance to risks involved. In short, choose the most suitable financial plans. However, note that holding money in the stationary form will yield no benefits. Investing in mutual funds, fixed deposits, real estate, startups will get interest income and profit percentage.

Investing in Bitcoin (cryptocurrencies)

Bitcoin is the largest cryptocurrency by market value, and it is receiving a lot of support from big companies like Tesla, Paypal and Mastercard. But before investing in this tricky business, do your due diligence. It can be as lucrative or risky as any other investment.

Safeguarding Wealth

Implementing safeguards around wealth that are invested becomes imperative, therefore placing it under an insurance policy that is designed to protect one’s finances- namely, health, life, trauma, and income protection insurance in case of any adverse circumstances.

Debt Reduction

An entrepreneur should get its debt under control, otherwise, he will continue paying interests on the debt. So, reducing one’s debts should be a part of one’s financial plan.

Living a thrifty lifestyle

Being thrifty is a virtue. Minimizing one’s needs so that he can maximize the amount into investments. Developing a frugal lifestyle is an art one can develop with long term planning, budgeting expenses, finding ways to reduce unnecessary expenses.

Keeping expenses below income

Living below your means is the way one can surplus on savings and cut down on unnecessary expenses. This will allow one to repay debt, save for rainy days, add to the emergency fund or make an investment in a lucrative deal.

Retirement Planning

Retirement planning is an important aspect of personal financial planning for any entrepreneur. A good retirement plan should ensure one’s income requirements at the age of retirement and what measures need to be taken to attain retirement goals.

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This pandemic of 2020 has taught us to live an economical life, cutting out the unnecessary stating that frugality is the word for future.

Keep tabs on business’s money-generating abilities

The ultimate goal of entrepreneurs is to convert sources of business wealth into personal wealth. Therefore, to conduct weekly and monthly check-ups on finances to ensure that one is reaching pre-defined goals. Taking stock of one’s expenses, income, employee hiring costs, and contractor fees is to make sure that business is working for the owner and not for other people.

Be smart about loans

In order to avoid the debt trap, do not overburden yourself with loans that are not essential to run the business, so avoid loans that are not adding to your sales directly or indirectly, and the pandemic has already taught us the importance of debt-free and economical life.

Time Is Money

An entrepreneur has to make sure that the time he/she spends is monetized properly, spending time in marketing or branding activities only or doing real business, needs to be prioritized. It should all result in a real money-making business immediately or sooner than later. Business means profit through legit sources.

Make a will

Making a will before tax implications could leave the entrepreneur’s legal heirs and beneficiaries exposed to tax liabilities that could leave them next to nothing from the total value of assets. So, solid functional estate planning needs to be done.

Tax benefits

One has to separate personal and business finances for greater tax benefits, the ability to take advantage of tax deductions is a huge plus for entrepreneurs. Keeping accurate records of personal and business expenses will assist in the event of a tax audit, keeping a check will ward off the tax guys.

Fintech- a tool to manage money

Fintech today is transforming financial management capabilities of entrepreneurs and businesses. There are various personal finance tools and services that are constantly evolving that helps manage money better. This trend has been beneficial for businesses, particularly smaller enterprises, making finance automation, data analysis, and flexible financing options within reach.

Protect assets from personal creditors

Personal assets can be at risk if an entrepreneur is sued for personal wrongdoing or as a result of a personal guarantee. However, there are ways to protect personal assets from these types of claims. One can consult with an estate planner or a bankruptcy attorney to prepare a structure to further shield assets from liability of business obligations.

Keeping up-to-date

An entrepreneur should ensure that all aspects of the plans are regularly reviewed and kept up to date with any regulatory changes that could occur anytime.

Cost Effectiveness

Entrepreneurs should use cost benefit analysis before making final decisions when it comes to their personal finance. One should avoid paying more than the expected returns.

Pay yourself salary

An entrepreneur should only pay himself out of profits, not revenue. Don’t cut a big slice of profit as a paycheck or bonus, rather invest that money for it to grow.

Making more money

An entrepreneur’s mind should always keep ticking on how to maximize investment returns and knowing one’s priority on whether to invest the profits or revenue earned from business on new bonds, real estate, or in a company or to buy an expensive car. Maximizing income for the next few years before indulging in luxury should be made clear.

The Golden Rules of Warren Buffett

Going back to Warren Buffett, his personal finance habits are as renowned as his investment strategies. From spending wisely to living under your means and developing healthy money habits, Buffett’s thumb rules are textbook stuff for inculcating great personal finance habits meant not only for entrepreneurs but for the layman.

Warren Buffets Rules are as follows that lay groundwork for every entrepreneur’s personal finance habits:

Don’t lose money

Warren Buffett’s number one rule is: Don’t lose money. And this rule applies to investing- if one is working to get out from a loss, it’s much harder to get back from where you started.

Get high value at a low price

Another Buffett principle: “Price is what you pay; value is what you get,” Buffett wrote to his shareholders long back. Losing money can happen when the price one is paying doesn’t match the value you’re getting, for instance, when one is paying high interest on a loan debt.

Instead, practice frugality like Buffett- “by looking for opportunities to get more value at a lower price like buying quality merchandise when it is marked down,” Buffett had said.

Healthy money habits

Buffett advocates to inculcate good saving habits from early life. He says to pay attention to money habits and work to strengthen those that help your finances and break those that hurt your finances.

Avoid credit card debt

Buffett said in a 1991 speech, “You really don’t need leverage (borrowed money) in this world much. If you’re smart, you’re going to make a lot of money without borrowing.” Buffett is especially wary of credit cards. His advice is to avoid them altogether.

Stack up cash reserves

Buffett’s key to ensuring security is to always keep cash reserves on hand. He once revealed that Berkshire Hathaway always maintained to the tune of double digit billion dollars in cash reserves. This helped the company sail through the great recession of 2008. He therefore advises entrepreneurs and businesses to maintain cash balance for rainy days such as the pandemic of 2020.

Invest in yourself

Investing in oneself, to improve one’s talent, will yield big returns, tenfold more, Buffett believed. He said unlike any other assets and investments, nobody can tax it away.

Learn, stay informed about money

Warren Buffett might not invest in cars or fostering an expensive hobby but he sure does spend his money on books from where he learns about managing money. Buffett is an institution in himself, an icon for the business community globally.

Buffett advocates learning more, educating oneself about managing money, and personal finance. He once said, “Risk comes from not knowing what you’re doing. The more you know about personal finance, the more security you’ll have as you minimize risks.”

Give back to humanity

Buffett practices what he preaches. The 90-year-old has donated 99% of his wealth to humanitarian activities. He is the Founder of The Giving Pledge along with Bill Gates which is a promise that more than 130 billionaires so far have made to give their fortunes away.

Money- a long term game plan

Buffett, in his 2014 letter to shareholders, said people should “invest with a multi-decade horizon, their focus should remain fixed on attaining significant gains in purchasing power over their investing lifetime,” rather than on moments of stock market volatility or economic crisis.

The post Personal Finance Habits an Entrepreneur Should Develop appeared first on Dutch Uncles.

New in Business? Be a Brand with a Purpose

DU Desk — Mon, 25 Jan 2021 04:01:32 +0000

Times are changing and so are the people’s preferences. When choosing a brand, consumers are caring for more than just products. They are considering the impact that brands are creating on the world. Take, for instance, Chennai-based Zoho Corporation’s ‘Made in India, Made for the World’ advertisement. The tech firm’s touching campaign focused on India’s traditional cultural diversity and integrated technology as a core part of our life. Want to feel trendy? Look no further than the Delhi-NCR-based start-up Lenskart and its BLU campaign. Developed in-house, it tickles the funny bone and brings India together with the binding power of cricket. In spite of the stark contrast, both brands tell us stories which go much beyond what they are selling – software and eyewear. Instead, one brings forth a nation’s splendour and another, its undying passion for wielding the willow. Look around and you are bound to find that top actionable strategies to build your brand – yes, even a young yet-to-be-discovered brand – is no longer limited to its products. Brand purpose is becoming more important than ever for connecting with consumers.

So, what is Brand Purpose?

Brand purpose is simply the reason why your brand exists beyond making money. It answers the question what does your brand stand for? Brand purpose lies at the centre of your brand vision. It connects consumers to the brand on an emotional level. It is about product-led initiatives that strive to simultaneously achieve business profits and benefit society. A brand purpose offers a clear sense of meaning and direction and inspires actions. It sets the brand on a path towards achieving meaningful goals by adding value to the business and enriching customers’ lives and society at large.

Brand purpose is at the intersection of a company’s reason for existence and its solutions to its customers’ problems. In his book on ‘Start with Why’, Simon Sinek pointed out that ‘people don’t buy what you do, they buy why you do it’. He described the golden circle of brand communication through three questions – What, How, and Why. Every company knows ‘What’ they do. It is the products or services they sell. ‘How’ is the process of doing it. It varies from company to company. ‘Why’ is the cause or reason behind a company’s actions. It is not money, as money is the result of these actions. ‘Why’ is the purpose of a company for doing what they do and how they do. Hence, is the most important question among all three. Yet, surprisingly, very few companies know their ‘Why’.

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People don’t buy what you do, they buy why you do it

- Simon Sinek, Authour, Start with Why

Importance of Brand Purpose

There is no denying that profit is the bloodline of the business. But apart from making money, what you do and why you do it matters a lot. Your identity as a brand has a bigger role to play. Brand purpose shows your customers that you are more than your products or services. You are not just selling solutions but contributing to the world.

The new generation of customers is drawn to the idea that their spending should not only buy products but also help create a difference in the world. Consumers see their purchase as a participation in the greater good by investing their money, time, and goodwill into a purpose. They want to buy from brands whose purposes they personally identify with and whose values and beliefs they reflect on.

Brand purpose is the underlying essence that makes your brand necessary and relevant to the consumers and makes it irresistible for them. It is the centre of attraction for your company that helps you build wholesome brand-consumer relationships, leading to the long-term success of your brand.

How to Find Brand Purpose

Brand purpose is unique for every company. Finding the right purpose of your brand is crucial to your business success. It should be steeped in authenticity and have genuine roots. If you try to fake it or create one just for the sake of it, it would not work.

Brand purpose is a double-edged sword. A lot of brands that do not get it right have to deal with its consequences. A misleading brand purpose is called out by consumers for its inauthenticity and opportunism. A recent example of this is the customer outrage against Pepsi when it featured an ad framing Kendall Jenner with a can of soda as a peacemaker between civil rights activists and police during the US racial discrimination protests. The ad was seen as a capitalizing move on a social cause and was highly criticized, which resulted in Pepsi pulling out the ad and apologizing publicly.

The right brand purpose is about having a moral value relevant to your brand and industry. It should give a reason for your customers to believe in you and choose you over your competitors. Dove is a successful example of a powerful brand purpose. Its ‘beauty for all shapes and sizes’ campaign has been so successful that the brand became synonymous with self-esteem. Dove took on a noble cause and executed it with authenticity at its core. As their purpose impacts women’s lives and improves society, their brand grew manifold.

Steps to Find Brand Purpose

Finding the right brand purpose is a result of different meaningful actions. The first and foremost one among them is listening to your consumers at different stages. Since your purpose is something greater than only commercial gains, you should look beyond the purchasing habits of the customers and find out what their values are.

Understand consumers’ perspective:

The sentiments of your consumers vary widely. They change across borders, countries, or even neighbourhoods. You need to identify the personal values of your consumers that triggers a buying action. For this, you should focus on the key psychological indicators such as:

Attitudes and interests
Lifestyle motivations
Self-perceptions
Perceptions on wider life

Find out the reasons for starting your business:

The fundamental origins of your business play a major role in your brand purpose. Ask yourself why you started the business in the first place. It can be for financial freedom, to solve a problem, or to share your talent or craft with the world. Whatever it is, be completely honest with yourself to find out the true values that your business stands on.

Identify the change your customers want:

Think about your ideal customers. What values do they have and what change they want to see in the world? What are their beliefs and worries and what issues are important to them? The answers to these questions will provide you with a basic understanding of the parameters on which your brand purpose should be based on.

Discover your strengths and uniqueness:

In today’s world, where the marketplace is populated with similar products and services, it is important for you to understand what makes you unique and sets you apart from your competitors. What is it that you are really good at? What are the strong characteristics that define you as a brand?

Create an exclusive brand experience:

To establish a meaningful brand purpose, you need to have a distinctive brand identity. And for this, your brand must provide special and memorable experiences to its customers that become the defining adjectives for your brand. Notice what emotions does your brand trigger when your customers talk about you with their peers.

Analyse brand and competitor data:

Brand data provide you realistic figures about the reception of your brand among its consumers. It enables you to see your brand reputation along with that of your competitors. It uncovers customers’ opinions and attitudes. Thus, helping you develop an action plan on how to challenge their perceptions, improve opinions, and develop positive sentiments.

Test your ideas and concepts:

A misguided purpose can backfire on your brand. Therefore, it is important that once you create a message and develop an action plan for your brand purpose, you must test it. You need to ensure that your brand purpose must relate to people and is transparent in its intent.

What the World Is Doing (for Better and Worse)

A brand purpose can be a tricky thing. If it is not done right, it may bring more harm than doing any good for the company. Many big brands and business leaders struggle with their purpose either because they do not understand it fully or their purpose is not rooted in authenticity and relevance. On the other hand, some businesses elevate from zero to millions solely because of their purpose. Many start-ups that get their purpose right benefit highly from it.

For instance, Warby Parker, an eyewear brand, broke into the market in 2010 with the purpose of making eyewear affordable for everyone. Their brand purpose was derived from their observation of the eyewear market. They found that the majority of the eyewear brands are dominated by a single giant company, ‘Luxottica’ as it had licensing deals with brands like Versace, Ralph Lauren, Ray-Ban, Oakley, etc. So, the market price was set by them. Warby Parker challenged that domination with the concept of affordable glasses. They leaped from not even having a website to a $3 billion value pretty quickly. Not only this, but they also expanded their purpose through their non-profit works and distributed more than 4 million pairs of glasses to people in need. Warby’s brand purpose is an inspiration for many start-ups looking to make a big name in their industries.

Another great example of brand purpose is Axe/Lynx. It is an established brand that reviewed their purpose when they discovered that more than 72% of guys in society are told to behave in a certain way to become manly. This led to increased searches on google with questions like ‘Is it ok for guys to do this or that?’. Axe, with their ‘find your magic’ campaign, established the purpose to help guys celebrate their individuality. They encouraged guys to be themselves and be as attractive as they can be. Any established brand can learn from Axe as to how to ace their brand purpose with the changing time.

However, there have been times when many big and established brands have drastically failed in implementing the relevant purpose or communicating it rightly with their audience. This has caused great damages to brands, including massive public outrage for their opportunism. Starbucks, a brand purpose pioneer, has been a victim of misleading communication of the brand purpose. During the racial protests in the US, Starbucks with its ‘Race Together’ campaign, invited baristas to write ‘race together’ on their coffee cups to stimulate conversation and compassion for races. But the public saw this as an inauthentic move from Starbucks since only two of its 19 executives were black. Moreover, people also criticized the photos of the campaign as there were no black hands for the representation of races. The audience outrage to this campaign was so strong that the head of communications of Starbucks had to suspend his Twitter account temporarily.

Another tragic brand purpose failure was from Coopers Australia when the company joined forces with The Bible Society Australia. In their ‘Keeping It Light’ video campaign, their guests discussed same-sex marriage which led to a public backlash within minutes of the launch of the video. People criticized the brand with #BoycottCoopers on Twitter and commented ‘never drinking Coopers bear again’ on their Facebook page. There was a nationwide boycott of the brand and pubs switched off Coopers tap. At last, to stop the criticism, the brand had to come in front of the camera and issue an apology with full support on same-sex marriage.

These examples show that brand purpose can be the true asset on which your brand stands or it can be a weapon that does your self-harm. It all depends on clear communication, authenticity, timing, and execution of your purpose. Without all these factors in place, you will look like just another business trying to leverage a social cause or sensitive issue. A brand should give proper thought and consideration to its brand purpose, to reap its benefits without any harm. To establish a relevant brand purpose, you should:

Dig deep into the roots of the company
Understand the pain-points and beliefs of the stakeholders
Identify the motivation of leadership

The most important thing to keep in mind is to not do something you are not committed to. Keep your brand purpose contextual and actionable. Take up a cause that your values reflect with. It does not have to be a revolutionary idea. A small business or start-up can start by taking up smaller everyday causes to tackle and further develop as a brand purpose along the way.

Outcomes and Benefits

Brand purpose is the foundation of your brand. Building a strong and meaningful brand purpose has endless benefits. It helps you build customer recognition and drive a competitive edge in the market. Customers that share the same values as that of your brand purpose become loyal to your brand. It also enhances your credibility and reputation in the marketplace. A powerful brand purpose alleviates your brand socially as well as commercially.

Commercial benefits:

Havas’ Meaningful Brands study suggests that a relevant brand purpose multiplies the wallet-share of brands 9 times. Brands with an active purpose outperform the stock market by 206 per cent over 10 years span. A meaningful purpose helps increase KPI’s of brands by 137 per cent in comparison to those that do not have one.

A strong sense of purpose has a positive impact on:

1.Brand Advocacy

2.Customer Loyalty

3.Higher Quality Products & Services

4.Employee Satisfaction

5.Transformation Efforts

Social benefits:

Brand purpose also benefits social causes that include the environment, races, individuals, sexes, groups, genders, countries, cultures, and continents, etc. Reports suggest that brands that empower society and improve sustainable living grow over 50% faster than the rest of the others. Purpose-driven brands help society by:

1.Inspiring actions and positive change

2.Impacting communities

3.Improving the health of the planet and society

4.Creating value for customers

5.Providing employees with a sense of meaning

6.Creating a better world for future generations

Activate Brand Purpose

The first and foremost way of activating your brand’s purpose is by implementing it in your company culture. Your employees should live your brand purpose every day. Your brand is the co-creation of people inside, that is, your employees, and outside, that is, your customers. Customers are active stakeholders who invest their time, money, and attention in your brand. So, all your important decisions should be based on them.

Brand Purpose is not just a word. It’s an action. Having a meaningful purpose is important, but it is equally important to put it into constant action. Once you formulate the right purpose for your brand, the focus should be on keeping it relevant in the fast-changing environment. With changing times, your stakeholder’s interests and priorities also change. Having a robust brand purpose means you need to re-evaluate your values, solutions, and customer-experiences regularly to stay at the top of your business game.

Your brand purpose is your lasting legacy for change. So, establish one that connects consumers, tells your story, and build authentic relationships that ensure business success.

The post New in Business? Be a Brand with a Purpose appeared first on Dutch Uncles.

To Every Problem, There is an Array of Solutions

Tanisha Achrekar — Sun, 27 Dec 2020 22:35:19 +0000

We go through ups and downs every day in personal and professional life. When it comes to launching your start-up, problems and challenges are an inevitable part of the grind. From raising funding to launching your website to accessing customers. The list is endless. Your role as an entrepreneur or a manager is to know how to tackle these problems and turn challenges into opportunities. Enhancing your problem-solving skills will boost your confidence to face these problems.

Problems faced by new businesses and start-ups

Starting a new business is courageous work. While some problems are a tough nut to crack others can be solved easily with some brainstorming. Even if you are planning to launch a large-scale business or to run a small store, there are some common problems you are likely to face. Being aware of them helps you stay on toes.

Raising funds

There is a time gap between when you start your business and when you start making money from it. It is essential to have enough pool of cash to sustain throughout that phase. There is always pressure regarding raising funds even if you are bootstrapping your way or raising capital through the stock market. Having cash reserves is important to ensure that the operations of your business are not affected.

Carving your brand name

Have you ever shifted to a new school where everyone already knows each other and you are the newbie of your class? Everyone is already aware who the naughty students are, the scholars, the monitors… and it is your time to carve your name and make a lasting impression. Similarly, in an industry, several businesses already exist before your entry. Here what you choose to do differently to create your brand awareness is a game-changer.

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If your only tool is a hammer then every problem looks like a nail.

Abraham Maslow

Hiring the right people for the right job

In a business, dreamwork is teamwork. The people you hire will be working towards building your dream with you from scratch. It is vital to ensure that they are on the same page as you are. Apart from their skills and qualifications, make sure that they have the same attitude and zest towards your business as you do. When people who are working for you have a different wavelength of thoughts than you, things can get difficult at times.

Getting customers

One of the biggest challenges a small business goes through is building its customer base. The art of selling is a skill that every business needs to master. Even the biggest brands in the world like McDonald’s, Apple, and Samsung invest tons of money in advertising and marketing to gain new customers. Getting new customers is one of the constant struggles of any business but more so initially. From giving their business a name to making it a household name is the ultimate goal of any entrepreneur.

Sometimes it is ‘too tiring’

The entrepreneur’s grind does have a fancy appeal to it but it all falls in vain some days. There will be days when hours and hours of work might not account to anything. During such times, it is okay to fall off the wagon due to emotional or physical fatigue. Take a break and allow yourself to relax before you start again. Being an entrepreneur is not a straight railroad but instead a rollercoaster ride. On the tough days, just remember that it is okay to pause.

Stages of problem-solving

Different teachers are assigned to the same noisy class. Some will punish the entire class; some might give remarks in the calendar while others might simply shout at the kids. Even though they all faced the same problem, they handled it differently. Similarly, in problem-solving, there are different approaches people use to solve the same problems. These problem-solving approaches no matter how different in nature, usually undergo the same stages listed below:

Defining the problem

You cannot find a solution to a problem that you do not know well. Clearly identifying what is the problem is the first step. Observing closely is important to know what problems your business is facing and in which area of it. Sometimes, some problems can be underlying while others couldn’t be more evident. Knowing vividly what the problem is will help you to know precisely where your focus is needed.

Brainstorming alternatives

Analysing your problems is important to come up with solutions for it. The way you brainstorm your problems will turn the tables. The best way to find a solution is to think about it in both logical and creative manner. Take your time to find several ways to solve the same problem that you are facing. The best solutions are usually the ones that are well-thought rather than impulse ones.

Time to choose a winner

After brainstorming for hours or days, depending upon the problem, now you will have all the possible solutions for it. From the list of solutions or even the top three, it is time to choose the one. Here your decision-making skills are being tested. Carefully evaluate all the possible solutions and then choose the best one. Choose the one which is best for your business and everyone involved in it – your stakeholders, customers, and employees.

Time to put things in action

Once you have selected the solution, the last stage of problem-solving is implementing it. All the planning done in the above three stages will be implemented here. Make an action plan, hire the people you need to implement it and the execution begins. Oversee that things are going as planned to avoid giving rise to another problem.

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We can not solve our problems with the same level of thinking that created them.

- Albert Einstein

Problem-solving tips for small businesses

Starting a business in itself is a challenge. The way you face your hurdles will determine how long you and your business lasts. No one is a born problem-solving genius. It comes with lots of practice and trail-errors.

Have a positive mindset

A person’s mindset directly impacts his approach to a problem. If you have a negative mindset, you are likely to fixate more on the problem instead of the solution. Having a positive mindset will help you when everything fails. Some days can be frustrating and tedious and those days are a test of your mindset. You cannot expect positive results while constantly thinking negatively.

Don’t hurry

An impulsive, rash decision is likely to have an unpleasant consequence. Take your time to come up with a solution after thoroughly viewing all sides. Analysing a problem from all angles takes time. Weigh all the insights and inputs and then come to a well-thought solution.

Better together

When you alone are looking for ways to solve your problems, you only have a tunnel vision. Consider taking opinions of your team, you will witness different perspectives towards the same problem. A collaborative approach goes a long way in problem solving.

Transparency earns integrity

When you are running a business, you are answerable to several people be it your investors, customers or employees. Transparency leads to less problems in any association. Don’t try brushing your mistakes under the carpet but instead accept it. Great problem solvers own up to their mistakes and take responsibility.

Focus on what can be done

There are several factors while running a business on which you will have no control whatsoever like the economy, weather, government policies, and currency rates. Even though they are problematic for the business, you need to remember that you have no control over it. Focusing on things that cannot be controlled by you is a waste of your time and energy. Instead, think about what you can do about these problems. Focus on how you can use such information as an opportunity or minimise any negative impact.

Problems are a part and parcel of life and very much so when you are launching your business. It can be daunting but remember to take one day at a time. When the going gets tough, the tough keeps going. As humans, it is easy to forget about the big picture at times and obsess over your problems. During such times, think about the long-term vision of your business. Read our article ‘vision statement’ to know more about the impact it has on an entrepreneur’s journey.

The post To Every Problem, There is an Array of Solutions appeared first on Dutch Uncles.

SWOT Analysis: The Key Management Technique

Aakash Sharma — Sat, 19 Dec 2020 05:57:13 +0000

Find out your weaknesses and don’t stop working until they become your strengths.

This line tells us more about SWOT Analysis than complex articles and research papers about it.

To identify, analyse, correct your weaknesses and further strengthen your strengths is the main purpose behind SWOT analysis. In order to simplify this important management technique, let’s delve a little bit into the background of SWOT analysis.

What is SWOT Analysis?

SWOT is a key part in strategically planning and managing any event, business venture or even common life activities. It has rightly gained significant value ever since it was first used by Albert Humphrey. A Stanford Research Institute management consultant at the time, Humphrey used SWOT analysis as a tool for strategic planning to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project.

Although, it is not like people went around doing tasks without any strategy before SWOT came into place. But, for the major part, that kind of planning was limited in its scope and did not help the people starting out from scratch. With SWOT analysis, almost every individual can plan strategically. They can move on with their plan in an effective manner, be it a business venture or any daily life event.

Let us consider a simple real life example to understand what the strengths, weaknesses, opportunities, and threats really are to any business prospect or activity. Suppose you and a team of students in your college are assigned with the task of organizing the annual cultural festival. The college administration has given you a limited budget for the event, and you and your team have to organize the event and the tons of activities associated with it in that budget window itself.

How to Do It?

So, what do you do in a scenario where you have to plan your college fest? Well, you turn to the simplest and best tool for management and organisation- SWOT analysis.

For such a large scale event, you will begin by jotting down the points related to the cultural fest simply on an A-4 sheet (that’s right, it is that simple). The key parameters related to the fest might include budget allocation, number of events, number of participants, arena management, decorations, food stalls, special guests, performances, etc. What you will need to do is to discuss among your team members and write these parameters under the four columns, which are strengths, weaknesses, opportunities, and threats. E.g.

Strengths	Weaknesses	Opportunities	Threats
Sufficient budget	Management of large crowds	Marketing Opportunity for sponsors	On ground chaos or mismanagement

As far as doing the SWOT analysis is concerned, it is one of the simplest tasks before starting actual work. You don’t need to have access to consultancy firms and agencies like PWC or KPMG. You are self-sufficient to conduct the SWOT analysis. The most important part of SWOT analysis is the format or diagrams which should be used in the technique. Here’s the FIVE-step format of doing SWOT analysis:

Determine the objective

Create a grid

Label each box

Add strengths and weaknesses

Draw conclusions

Why You Need SWOT Analysis

The purpose of performing obtaining and establishing the above-mentioned elements in the process is to reveal positive forces and potential problems. Capabilities as well as shortcomings need to be addressed, or at least recognized, in any organisational task.

So, the most important aspects that SWOT analysis makes you aware of are:

Precautions to be taken in case of a threat to the idea or plan,

Advancing quickly and capitalising on opportunities,

Sustain and develop internal strengths of your business,

Work relentlessly towards improving the weaknesses,

Appropriate and effective allocation of resources, and

Competitive positioning to help see new trends in the market and position the business idea appropriately.

Components of SWOT Analysis

SWOT analysis will give you a basis to evaluate your event’s viable position and help you develop a strategy to organise different parts meticulously. By assessing the factors, both internal and external, you will get an idea of your current position and a chance to explore the future potential.

Now, you will ask, what are these internal and external factors? Talking about internal and external factors will answer your questions about the components of SWOT analysis. Internal and external factors are the-.

Internal Positive Features

Internal Negative Features

External Positive Features

External Negative Features

How to Identify Strengths and Weaknesses (Internal & External)

For instance, your fest will be conducted inside the college premises located in, let’s say, the North Campus of Delhi University. So, the positive factors that will become the strengths in your planning are the logistic aspects.

Since the college is near the campus metro station ->, which means higher footfall as many students and people will be easily able to reach the college easily -> easy way to attract sponsors & marketers. Thus, your college’s prime location is a positive external factor as far as the overall setup and favorable conditions for an event are concerned.

For an event this big, you will obviously have a large team of people divided into different groups. This is where the internal factors of SWOT analysis will help you out significantly. Suppose you have an IT group in your team. The IT group will be responsible for the inline presence and management of the complete event, starting from social media marketing of the event to the brand management of sponsors.

In this drop-down system, even if one member of the IT team has any trouble doing their assigned task or lack any equipment necessary for IT purposes, the whole event can suffer adversely.

Is SWOT Analysis Effective?

Doing the proper breakdown of internal groups and SWOT analyzing them will ensure that all the members ‘internal’ functioning is smooth, and thus the event is smooth. This SWOT analysis of internal factors must be done for all the team groups to ensure the optimum functioning and best output of the efforts.

Simply said, internal factors will help you find out the errors and faults inside your team, company, or business idea, and external factors will help you identify the broader trends, practices, and ideas of your business’s industry or nature. It would help if you kept the analysis accurate by avoiding preconceived beliefs or gray areas and instead focusing on real-life contexts. These factors are critical to finding out and be dealt with accordingly.

Who Should Do SWOT Analysis?

As said before, SWOT analysis can and should be done by every individual and group responsible for any task in the event’s organization. Compare it to a business idea/model, every department should do a SWOT analysis, and the company must do its overall SWOT analysis process. The reasoning here is simple: the more the analysis, the better the business’s outcome or the initiative you have undertaken. SWOT analysis will guide you in determining the credibility of your idea and its planning track. A precise and accurate evaluation of your idea helps determine if their idea is strong, bankable, and scalable and whether it suits their industry or business environment.

What’s In It for You

By now, you must have understood all that is there to know about SWOT analysis- what is it, how to do it, why it, and by whom it should be anyone shall use anyone and everyone who is part of the planning of a venture in any way, shape, or form, be it a large corporate business, a small scale business, a college fest, or any initiative. This way, you will be able to facilitate a realistic, fact-based, data-driven look at the strengths and weaknesses of your business, its initiatives, and industry, as portrayed through the example of organising the college cultural fest.

Some actual businesses and companies have, in recent years, attributed their success to SWOT analysis. One of the biggest examples is American company PactSafe. The company provides the tools and guidance you need to make remote digital work easy, especially during the COVID crisis. It easily implements efficient and secure ways to transact online SaaS features like e-signature with its modern signing methods, including click-to-sign and text-to-sign technology. PactSafe used SWOT analysis to drive its product roadmap, which included building a Legal Centre where its customers can manage all of their contracts. The analysis led them to identify a gap seen within its customer base: a single, dedicated portal to manage old and new contracts, revisions, acceptances, and more. And they cashed in on the opportunity by rolling out this new feature and addressing customers’ felt needs.

In the end, you should be able to consider whether the objectives and factors arrived at from the analysis are attainable. If the objectives are not attainable, a different objective must be selected. The process is repeated if they are attainable. Focus on correcting the wrongs and starting your idea on the right note.

The key learning from this article is that SWOT analysis is usable for any and every business model. From small businesses like a tea-stall owner or a Kirana shopkeeper to businesses like food stalls and start-ups, everyone can use this efficient technique.

If you’ve come this far in this article, it is clear that you are interested in learning more about business techniques and skills. Learn about organizational strategies other than SWOT that can help you in real life. Read about PEST, STEEP, and STEEPLE on our website. Remember the details of processes and their ultimate goal- to help you plan strategically.

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