Entrepreneurship and “The Recession Saga"

Recession cloud has been dominating the business scene for some time. Future predictions don’t see so much change in the near time. Businesses no matter big or small are feeling the pinch and always thinking about how to get them out of this slump. Ever since the realization of the big recession, things have never been the same again. A lot of things have been happening and only few have bear fruit if any. Stimulus packages to cost cutting and restructuring are some of the major changes made to make things roll back again. Entrepreneurs are also in deep trouble as sales have not been even near the mark since long. Change has been through our businesses and should be taken as an emergency situation. Entrepreneurs though very enthusiastic about their businesses but they should also keep in mind those cash flows are hard to come by so money should be spent in a wise manner. Only necessary expansions should be carried out. Once the change is realized, it will easier to determine the future course of action. It must be noted that revenue generation happens through the contribution of different departments. Secondly an approach that is sustainable in the longer run should be adopted.

Recession is a situation we all are facing globally, but we also know that different regions have different scales of recession. One size doesn’t fit all is the case. Problems are different, so are the solutions. Localized approach should be used to determine what a particular business is facing and try to first eliminate those problems. We cannot look at the same string of restructuring and downsizing for example. We have different labor laws and union’s negotiation powers. Some of these problems arising from recession are indirectly affecting our business while others pinching our profits. Priority should be given to the ones that are directly influencing the profit making ability, for long term survivability and then the factors affecting the firm indirectly should be made accountable. One other thing that we always forget is that recession has different meanings for different countries and their respective business organizations. There may be countries badly affected by the recession and then other countries and their business would have almost no effect on their businesses. Recession is a scenario which every entrepreneur should be worried about and communicate it through its hierarchy. It is must for the employees to be communicated regarding the costs the company is paying to retain them and how can they be effective to help the company to get out of this tricky situation. So if you are ready to take the recession seriously and are a proactive entrepreneur then you don’t have to worry. On the other hand if you think nothing bad happening can affect you then think twice about the big corporations who are ceasing to exit in months’ time.

Source:
Wholesale Suppliers

Price determination – Profit and other contributing factors

If you are in retail or reselling business, setting price is not a concern, but if you are the manufacturer or producer, or if you are going to provide some sort of services then setting price can be a very difficult job. At times, new startups set prices in a hurry and focus more on making sales, only to find later that even though they’ve made good enough sales, the accumulated profit is not up to the mark. That is why when setting prices; you need to keep each and every cost in mind, along with adjusting the variables like competitor’s price and consumer’s purchasing power into the price. A price too low would bring more sales but no profits, whereas a price too high will bring large profits but very few sales (unless you enjoy some sort of monopoly). Therefore, the price needs to be spot on.

Rule of thumb when setting prices:

Try to kill your competition by setting low price, but make sure you are not choking your own business of profits. Whatever pricing model you use for pricing your products or services just remember this one point; you’ve got to set a price that will give you an edge over your competitor, still providing you with much needed cash to cover your costs while earning some profits. One more thing, the price you set initially is not something written on stone, it can be changed and it should be changed if the initial price doesn’t prove to be the right one for any reason.

Costs & Expenses:

The price should cover the cost of production and advertisement, that’s simple and everybody knows that. Where most businesses go wrong is when they are calculating their costs of doing business, they often overlook the possibility of some future expenses or completely ignore one or two indirect expenses (transportation & depreciation, etc). Therefore, before you start calculating the right price, you must be having an idea of all costs or expenses that will occur in course of business.

Different Prices for Different stages:

If you are just starting, your first goal must be to enter the market and capture as much market share as you can. At this point of time, you probably need a price as low as possible; some businesses even take a risk of setting a price lower than their break-even point. However, once you’ve managed to make inroads, you can raise your price, later when you’ve established as a well known brand, you can always set a price that offers maximum profits.

Source:
Computers Wholesale Suppliers

Green Business – Change your business into eco-friendly business

These days business circles are abuzz with the talks of eco friendly practices. New startups and small businesses are keen to jump on eco-friendly bandwagon by adapting environment friendly practices like recycling, green manufacturing, sustainable development or renewable energy. Not only these practices provide small businesses with good projection, but the technologies like recycling or renewable energy are also beneficial to the businesses in terms of cost reduction. “Green business” is a recently introduced phenomenon and it is much more than placing a greenish logo on your products or packaging. In actual fact, Green businesses are enterprises that use natural products, reprocess materials and try to be as energy efficient as they can.

Efficient Use of Energy:
Businesses are keen to minimize energy cost and emissions. Businesses can save a handful on bills by taking initiatives like switching off unnecessary lights or using appliances which are much more energy efficient than the older ones. Energy efficient electronics like computer monitors, cooling systems or lighting systems have in-built programs along together with different kinds of sensors, which helps them save energy in various ways. Buying these appliances or installing new cooling systems may sound a little squandering, however when you look at the amount you can save on bills, it is easily justified.

Environment Friendly Manufacturing:
Manufacturers are quickly realizing that adapting an eco-friendly approach is actually more beneficial for the business itself than it is for the environment. A green manufacturer will focus on the longevity of the products, it won't pile up unnecessary inventory, it'll think of ways to recycle scrap and it wouldn't be wasting resources in over production. As you can see, these are all commonsensical practices. Therefore, green manufacturing is not some useless hoopla; it is in fact a more sensible approach of doing business.

Working for the waste reduction and Recycling:
Waste reduction should be added into the job description of managers or supervisors as an added responsibility. Take the example of paper wastage, which can be reduced significantly by taking small steps. For example, using electronic mail for internal communication or printing on both sides of the paper. Stop purchasing or making use of color printers when you can do with black and white copies. Read the instruction manuals of your electronic appliances like Air Conditioners, generators or printers and follow the instructions, it will maximize their performance while increasing their lifespan. Manager or anybody else who is in charge of purchases should make sure that the need exists before authorizing any purchase.

Source:
China Wholesale Suppliers, Distributors, Dropshippers & Manufacturers
UK Wholesale Suppliers, Distributors, Dropshippers & Manufacturers

Advantages of Radio Advertising and how to make an effective one?

Radio is often neglected as an advertising medium by a majority of businesses. Even though, television has completely overshadowed its predecessor as a broadcasting channel, still the numbers of radio listeners is continuously growing with the passage of time. What’s more, when we look on the advantages as compared to the reach and cost associated with radio advertising, it comes out as an extremely useful medium. Radio advertisement costs hardly 5 – 10% of what a TV advertisement can cost (both in terms of the fees for “spot” and the cost of creating an advertisement). On the other hand, impact is not as bad as compared to the differences in cost. As a matter of fact, some radio programs can have a much bigger audience than the television shows. For example “The Rush Limbaugh Show” has an audience that exceeds 20 millions or “The Savage Nation”, which is estimated to have approximately 10 million listeners.

Adding more to the point, majority of radio listeners fall between the ages of 18 – 40, therefore if your products or services are intended for this age group, you must consider radio advertisement. These days radio tuners are available in vehicles or cell phone, resulting in an increasing number of radio listeners. Research suggests that radio is the second best medium, having the kind of reach which is surpassed by television only. Some may believe that the majority of radio listeners are coming from lower income bracket, which is absolutely wrong. The fact of the matter is that radio reaches more than 90% of age 15 or older in United States; hence the question of income level is off the point.

Creating an effective Radio Advertisement:
Radio commercials (or Spots) are sold on the basis of durations (generally of 10, 20, 30, 60 and 120 seconds). Therefore, you must be aware of your budget and the on-air time you’re going to get before creating an ad. The fate of your ad will be decided by the opening; that’s why you should be looking to hook the listener in first 5 seconds, as tough as it may be, but that’s your only chance. It doesn’t matter if you are making use of appealing jingles, straight read or sound effects, there’s no single successful structure that may suit all types of products or services. One advice that holds true for any other advertisement as well is that you’re ought to focus on the customers and their needs (when creating an advertisement) and not on your product.

Source:
Wholesale Suppliers
Wholesale Products

Full service wholesalers vs. Limited-function wholesalers

A wholesaler purchases directly from manufacturers, in large quantities and then sells the products to retailer, who then sells them to consumer. The difference between a wholesaler and retailer in this transaction is the nature of the customer they are selling to. A wholesaler is selling to another business for reselling purposes, while the retailer will be selling to the consumer, who is buying that product for his/her personal usage. Remember, this is just a general description of wholesaler and there can be some variations. For example, a wholesaler doesn’t always sell to a retailer, or sometimes a business listed as a retailer can act as a wholesaler when it sells a large quantity of products to another business for commercial use, and still this transaction will be regarded as a wholesale deal.

Full Service wholesalers:
As the name suggest, full service wholesalers offer a complete range of wholesaling services to their clients. These services are
Buying & Selling:
This is the very basic of wholesaler’s functions, buying directly from manufacturers in bulk and then selling it to the customers in smaller quantities, which suits both, the producers and the customers.
Providing storage facilities:
As stated above, wholesalers buy in large quantities, but they can not sell out these products right away, because the customers do not have the space to store these products. Hence, wholesalers take up the task to preserve these products in their warehouses.
Freight & Transport Services:
Again, buying in bulk and then storing the inventory at some place near to the consumer markets can reduce the cost of transportation; it also ensures a speedy delivery of the product on timely basis.
Expertise of Market:
Interaction with both producers and buyers allows them to understand the demands and limitations of both parties; in most cases they understand the market better than the producer, mainly because of their experience.
Apart from these, a full service wholesaler may also indulge in marketing the products, conducting surveys, and even providing after sales customer service.

Limited Service Wholesalers:
We are living in an era where the focus is shifting towards specialization from businesses that fall in jack-of-all-trade category. A business that specializes in any of the above mentioned services can provide much better service at much lower cost than any of the full service wholesaler. Another reason behind the rise of limited service wholesalers (e.g. drop shippers) is more and more people looking to start their own businesses. Since these individuals do not have financial or other resources to start as a full fledge wholesaler, they prefer offering limited services according to their expertise.

Economical Start Ups – Avoid using up all resources

Cheap-to-run businesses are just the thing you need in present situation, and there are plenty of them, for example consulting business, online businesses (e.g. drop shipping), real estate brokerage, and the like. Some of these economical businesses initially need a huge capital to start with, and every so often people get carried away by the excitement and spend on things that are not really necessary in the start, it makes business startups a risky endeavor. Overspending at any stage of the business is obviously a bad practice, but being wasteful when you have just started, is asking for trouble. In case the business fails, it'll be so much more difficult to recover from that failure. Huge spending in the start will make you impatient and even the small setbacks will felt like a blow.

Start small and grow rather than starting big and diminishing:

Some startups, while trying to devastate their competition, spend too much on marketing and other stuff, which overburdens their finances. As a result, the first business that gets hurt by this excessive spending is ironically their own. Rule of the thumb for most businesses is to start everything on trial bases, instead of jumping in the market with high hopes and putting everything on stake.

Plan & Research:

Make a list of all requisites and expenditures that you may need in the start and then try to avail most of the low-cost alternatives available. For example, when you are looking for office furniture, you can save plenty by getting some second-hand office chairs and tables (in good condition), as the brand new furniture hardly plays any role in the final decision of a customers who pays a visit to your office. Similarly, don’t indulge in extensive borrowing from banks or other resources; do not unleash some lavish advertising campaign as well.

Niche Segment:

You cannot capture the whole market all at once; you have to start by small segments. Big ambitions are fine but make realistic targets and go step by step. Niche is the keyword for any small business, even more so when you are just starting. Targeting a specific set of customers allows you to save on research, marketing, production and distribution. Also, starting by focusing on a small niche won’t put other relatively large businesses on the alert, saving you from some serious blocking up tactics that these business can employ to choke your business in the start.

Source:
Wholesale Trade Suppliers, Dropshippers, Distributors & Manufacturers

Winning combination of internet and B2B marketing

Though business to business transactions have been there for ages, B2B marketing is a relatively new phenomenon (or perhaps marketing was not classified into separate categories like B2C, B2B, and B2G back then). Ever since the categorization, business marketing has surpassed the traditional "consumer marketing" by all measures, that too in this short time period. Business marketing is now established as a much bigger and more profitable venture, particularly in the developed countries. Basic difference between these two, as evident by the names is that in B2C marketing we target individual consumers, while in B2B marketing our aim is to engage businesses, organizations and large corporations. Business marketing is undoubtedly a tough job, but far more profitable without any doubt. Mainly, for following reasons …

• The profit margin is much larger than consumer marketing
• You don't have to cope with the cut-throat competition that exists in consumer marketing
• Business marketing is not unpredictable and complicated when compared to consumer marketing
• Once secured, the customer (i.e. a business) stays with you for a much longer period
• Customer acquisition cost is lower when weighed against the income that generates as a result

Internet and B2B Marketing:
From positioning to promotion, and sales to customer support service, Internet has revolutionized the B2B marketing, B2B marketing and Internet make an excellent duo that is cost-effective, far reaching and equally promising. Ignoring internet as a marketing medium altogether, can prove to be a suicidal decision if you are running a B2B business.

Low cost:
If you are looking to cut down costs for research studies, promotional campaigns, lead generation or even branding, internet is the most economical medium to carry out all these tasks, and the fact that most of online marketing techniques may draw in only the targeted customers, makes it even more worthwhile.

Cementing your relations with the customers:
Social media networks e.g. Facebook or LinkedIn enables your customers to interact and get the answers to their queries (regarding your business or products) in no time. Corporate Blog is an excellent way to establish yourself as an experienced professional; you can elaborate your business mission, share your knowledge of the industry, and get immediate feedback. Similarly, you can provide your customers with an expeditious customer support service at absolutely no cost involved.

Online B2B marketing platforms:
Luckily, internet offers various types of B2B marketing platforms and business networks, which mean you've got a pool of interested buyers readily available. These networks (e.g. dailytrader.com) can take the fuss out of B2B marketing and give an instant boost to your sales.

Source:
Wholesale

Which business structure is best for your small business?

There are basically three types of business structures (or forms of ownerships) to start with, and if you are looking to commence a business, you need to study all of them in detail as they are not just different methods to manage a business. Business structure actually plays an important role in many ways. For example, cost of starting and then maintaining a business varies with different structures; then you have this very important objective of minimizing tax payable, another decisive perspective can be the liability factor. You can change the structure in future (e.g. getting into a partnership from operating as a sole proprietor) but it's better to start from the right one, instead of going through the change process later on.

Sole Proprietorship:
The most basic form of small business, where one man starts, manages and owns a business. There's no or minimum start up costs involved, you are the sole possessor of your business and all its assets. However, this sole ownership comes with unlimited liability, which means even your personal assets are at risk in case something goes wrong and a suit is filed against your business. As a sole proprietor, you are responsible to pay income tax on your profits. Apart from the unlimited liability part, sole proprietorship is the most convenient way to start a small business, for example consultancy services, real estate agent, retail store, etc.

Partnership or Joint Venture:
Another very simple form of business structure is known as partnership; in which two or more persons join hands to establish and manage the business. Profit, loss and liabilities are equally divided between all partners (or as per the agreement). Taxation liabilities are same as sole proprietorship, as partners are required to pay taxes on their share of profits, in individual capacity. Just like sole proprietorship, your personal assets are not protected as each partner carries unlimited liability (unless some of them are mentioned as limited partners in the agreement). Partnership can also result in some disputes or personality clashes if all members are fixed at running the business in their own way. Partnership helps two or more people to combine their finances and expertise to form a more competitive business when compared to sole proprietorship.

Limited Liability Company:
Limited Liability Company has characteristics of multiple business structures; it offers tax advantage similar to partnership, while precluding the unlimited liability. Limited Liability Company functions like corporations except that they are not required to offer company shares in stock exchange. Even though the cost of maintenance or establishing a Limited Liability Company is higher than partnerships or sole proprietorships, many smart entrepreneurs still prefer this business structure just because of limited liability clause.

Source:
Wholesale

Implications of the "Incoterms" in international import & export

Communication is crucial in international import & export, where both buyers and sellers are located a long way away, there’s every chance of misunderstanding in the interpretation of various terms used in contracts and agreements. These confusions and misapprehensions can cost one or both parties, dearly. What sounds pretty simple and straight-forward to a buyer sitting in United States, could turn out to be a perplexing one for the seller in China.

This problem continued to exist and resulted in many mix-ups and losses until the International Chamber of Commerce set down “Incoterms”, which is a set of 13 terms, referred as

1. EX-Works
2. FOB (Free On Board)
3. FCA (Free Carrier)
4. FAS (Free Alongside Ship)
5. CFR (Cost and Freight)
6. CIF (Cost, Insurance & Freight)
7. CPT (Carriage Paid to)
8. CIP (Carriage and Insurance Paid to)
9. DAF (Delivered at Frontier)
10. DES (Delivered Ex Ship)
11. DEQ (Delivered Ex Quay)
12. DDU (Delivered Duty Unpaid)
13. DDP (Delivered Duty Paid)

Businesses can choose any of these 13 terms according to their own needs and requirements. For example, "Ex-works" inflict the minimum liability for seller; on the other hand "Delivered Duty Paid" makes it obligatory for the seller to arrange for almost everything including export duty expenses, loading and unloading expenses, landing charges, transportation, insurance and custom clearance. Incoterms are not applicable to all aspects of trade, however they do standardize most of the terms used in international trade. For example, they spell out the terms of delivery in detail, and establish the responsibilities for buyers and sellers as to who will bear the expenses of insurance, clearance or various other taxes. Another important implication of "Incoterms" is the reduction (or removal) of uncertainty about the transfer of risk.

As an exporter or importer, you need to spend some time on understanding each of these 13 "Incoterms" and their explanations given on the official website of "International Chamber of Commerce". Each of them is an agreement in essence, with predetermined terms and condition, for that reason each of them has got different advantages and disadvantages. After a careful study, maybe you can underline the best ones and then stress on using that particular Incoterms when getting into an agreement with some buyer or seller. Incoterms are acknowledged all over the world (by courts, governments, etc); therefore a good comprehension of all of these terms is a must for all international exporters. Remember, ICC keep making minor changes (not very often though), it's important to keep a track of these modifications.

Source:
UK Wholesalers

How to deal with employee's high turnover rate

Turnover rate is the ratio of employees leaving the company (or some specific industry) in a given period. A company or industry has high turnover rate when the workers of that company tend to ditch their jobs more often than the employees of other companies (in the same industry). Some industries and jobs have high turnover rates because of the nature of work, however if your company has a high turnover rate than your competitor and you are not able to sustain your employees with you, there maybe something wrong with your policies. In case you don’t pay attention, not only you will be loosing your good employees to your competitors, your business will also suffer from high costs of attracting, recruiting and training the new staff.

Atmosphere and working conditions:

At certain workplaces, you will feel the tense atmosphere as soon as you put your feet in, reason can be strict management or unrealistic targets. Being a manager, it is necessary to maintain some discipline but some managers overdo it by importing rules straight from the books of military. For many individuals (especially fresh graduates) it becomes really hard to adjust in this kind of atmosphere.

Working conditions are linked with health related issues. Light, ventilation, air conditioning, heating systems and safety measures are some of the basic requisites. Sometimes, improving your high turnover can be as simple as loosening up some rules or dealing with some unhealthy environment issues.

Salary & Growth Opportunities:

Excessive work, no incentives and low salaries, these are all grounds for a high turnover rate. Employees are here to earn, and their morale is directly related to their income. If you are expecting them to give their 100 %, you should be giving back in form of good enough salaries. Your salary packages should be competitive if not the best in market. A good salary package will make up for many other factors, but if the salaries are low from the market standards, nothing can hold the employees for long. Similarly, motivating employees by providing growth opportunities is also necessary.

Choosing the right candidate and the nature of the work:

If your recruitment and hiring process is flawed, you are destined to have a high turnover. Many small businesses, in a hurry to fill out vacant positions, hire some unskilled individuals, thinking that he/she will learn the traits with the passage of time. Such hiring is nothing but wastage of time, both for employee and employer. The interviewee should have complete knowledge of the skills required for some particular job, and the successful candidate must be having most of them, if not all.

Sometimes the reason for high turnover is the nature of work, for example the jobs that require night shifts or excessive late sittings. These types of jobs are not suitable for everyone; hence turnover rates are often high in such jobs. These are just some of reasons, apart from looking into these areas; you can communicate with your employees to get the idea if they are having any reservations.
Source:
Wholesale