The more I read this ancient literature, the more I realize that doing business in today’s world is no less than war. Almost each and every strategy is applicable in doing business in the 21st century. In the last chapter, we discussed the importance of planning and strategy making. In this chapter, we will discuss that what all we have to face as we enter into the exciting world of business. So fasten your seat belts because we are about to start this amazing journey. The road is going to be bumpy and topsy and turvy, but in the end, everything will be of worth. Be ready for the thrilling ride.
And there we go:-
Facing The Giants
When you enter a market, according to the niche you want to set, you see certain giants already operating in that particular market. They are manufacturing the same product or delivering the same service and targeting the same customers, which you always wanted to target. All your revenue generation models will look vague and impractical. Now, the only support you have is your Seed Capital which you have brought from your home to survive in the market (provided, no angel investor or banks are involved). It is the only source for you to incur your routine business expenses.
Generation of Profits
As you might be aware that it takes some time to operate over the break even point. In other words, you will not earn profit from your initial sales. Every business has a pre-defined cycle. You have to use your seed capital or the Debt which you have taken from banks, financial institution or any other source.
from both the points we understood that an appropriate investment (according to the nature of business) is required to survive in the market, at least in the initial stage.
What if Seed Capital Falls Short?
If that business cycle takes a bit too long and you’ll not able to cover your expenses, what will happen in that kind of circumstances? The first thing which you’ll realize is that your competitors will try to take advantage of that situation. They will try to attract your existing customers via their various marketing strategies. In that phase, your relationship with your customers will be not much strong. All your strategies will not work unless some money is injected in your business cycle. If the money is entered as profits – it will give your business a new kick start. If you have raised some debt, it will help you in business operation for a while, until you earn some profit.
The calculation of investing your seed capital is itself an Art. You need to make a proper Business Plan with a backup plan before initiating the business. The plan should be on a paper and according to that plan, a revenue generation and survival plan should be made. (I will discuss more this in the later chapters)
Let the Mares of your Mind Run
The first and foremost thing is, A backup plan is an utmost required before starting any business. If you are going to investors or any financial institutions to ask for investment or debt, the first thing they will look at your plan. You need to keep in mind that a business plan contains everything positive – you’ll get all the right opportunities and you will grab them all at the right time. But the problem is, the reality is bit different. Things can be topsy and turvy. The Lender or the Investor will look at the plan and will raise the most obvious question which is ” What if his plan doesn’t work?” Here comes the need of plan B.
Plan B is the plan which is made while keeping in mind that things will not go well. The purpose of this plan is to make a profit or avoid loss in the negative circumstances. This can be a game changer while raising Investment or actually operating your business in not-so-appropriate circumstances.
So when nothing goes right, you should sit and look into your plan B and then proceed accordingly.
You have entered into this market because you had confidence in your product or your services that it will be able to help the customers. Standing at the position, where profits are not much visible, you need to ask this question from yourself “Whether adding money will solve the problem?” If the answer comes positive, find ways to raise capital. Jot down all the options you have – The Investors, Banks, Financial Institutions, or may be admitting a new partner. This will help you to carry on with your business process, with a new hope.
Power of Workforce
Bill Gates once said that the Alumni from almost all notable universities are working for Microsoft. The Truth is, Our employees are the one who helps us to achieve our dream. They are the soldiers who are fighting the battle for you. Make sure you have strong and competitive soldiers in your Army. Your team must be hardworking and work oriented. So, hire smart, Intelligent and hard working employees.
Competitors are also Humans
Sun-Tzu always says that we must not hate our competitors. Market Capturing is important, but we should do our business with utmost professionalism, without using any ill methods. We must not consider competitors as Enemy. We must respect them and their strategy and most importantly we must learn from them. Competition should be healthy in all respects, that should be the essence of good business.
Leadership is the Key
Every successful business runs under a great leadership. A leader is the one who shows the way. A leader could be the manager, or the supervisor or may be the employer himself. A Leader should be always there in all the ups and downs of the market. Strong Leadership has the tendency to strengthen back even the shattered business.
– Seed Capital Calculation is Very crucial.
– You must know the Art of Raising Capital
– The Strong workforce can make your business prosperous.
– Leadership is the key for successful Business
See you again With the decoding of Chapter 3, till then Stay strong and keep fighting.
And yeah, if you haven’t read the first chapter, you can read it here.
Love, Laughter, and Peace
Himanshu R Nagpal