Are we in need of a “Start-up School” ?

Why 9 out of 10 new businesses fail?

Despite Investors consistently pouring investments in Startups , unfortunately there is no reputed Business Training for Investors, founders and employees, teaching hard realities about what getting involved with new businesses is all about.

Investing monies and running businesses are different skills all together.

An investor cannot assume that because he has the monies, he can have better understanding of business and vice-versa.

As per Forbes and Statista, 9 out of 10 businesses fail.

This is because a start-up needs a special mindset and attitude.

Startups are more about resourcefulness than resources.

Its more about that attitude of working till the job gets done not till the clock ticks 5.

 

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How to dramatically TURN AROUND running businesses

Countless corporate giants have crashed and burned like Sears Roebuck & Co., U.S. Steel, Eastman Kodak and Pan Am, to name a few.

But some big companies have “turned it around” – gone from stagnation to innovation. Most of them have used a 4-step strategy to turn around and I am detailing it out for you.

Step One: Start accounting the next recession in your P&Ls

The best businesses are those that are prepared to face the upheavals of the future. The foremost factor which many founders, CEOs and managers fail to project in their P&Ls is provisioning for the next recession / slowdown.

Generally, projections are made considering the last downturn as the last one – Once you understand the industry trends well, the P&L should be devised keeping in mind the future market trends.

Step Two – Define your purpose

Businesses are created to make money, let us all understand that first.

Once we are clear on that, it is important to define your product purpose which you will be working toward in the minds of your consumers.

For instance, the founder of one of the Coke used to say that “one day my cola brand will replace tap water”. Which essentially means he envisioned replacing water with this cola brand.

The purpose has to be larger than life and something which will drive you, your employees and all stake holders to work towards that goal. Purpose is the true essence of a company.

Step Three: People

You are only as good as your people and here are a few tips for hiring managers which I always exercise:

i. Hire for character more than skills.

ii. Give a chance to passionate freshers, because passion has the ability to overcome challenges which are often considered to be insurmountable by experienced people.

ii. Compensate your team members generously. Evaluate compensations as per the value which the candidate will bring to the table, and not on the basis of their current salary structure.

iv. Never treat rock-star performers and average performers alike.

Above all, have a fair KPI system in place for a professional evaluation of all your team members.

Step Four: It is NEVER about top-lines, Bottom lines are the real meat of business.

I am a firm believer in cultivating a culture of hardcore savings in the company – saving money is important, but even more important is cultivating the culture of saving in every aspect of the business.

Hence:

i. Focus on savings from the very start. Ensure all resources are utilized to their fullest possible potential.

ii. Always look at bottom lines. Top lines are never the indication of the real health of your bank account.

iii. Focus on future bookings and long-term contracts.

Conclusion

I was fortunate to work with companies where I was part of the core team – building brands from scratch or revamping existing brands. Working in such an environment takes your learning curve to an unbelievable level and helps to test your true mettle.

I hope the 4-step strategy that I have detailed above will give you food for thought. For any further inputs or suggestions, feel free to reach out to me.

Money saved is money earned?

Once upon a time a loser said “ Money saved is money earned!”

As per a recent study done by Forbes, One of the biggest reasons for start-ups to fail is Cash Flow. More often this happens when founders/managers/top management confuse ” Real Money ” with “Fake Money”.

I classify “Fake Money” as: (a) Sale without collection and (b) Saved Money which is also considered as revenue or “Money Earned” .

My Take # 1 : Money saved is JUST salt earned.

My Take # 2 : Money spent right & Revenue secured in account is your real worth of the company.

This is true definition of ” Real Money ” or Money Earned ” It is never about toplines or middle lines in business . The absolute bottom lines and ” Real Money “is what thrives your business.

My definition of Money Spent Right is; any money spent which generates ” Real Money” for the company is ” Money spent right” . The only thing which can fluctuate/debatable is the ROI expectation – which can be calculated as well to a realistic accuracy

Agree?

Avoid this ONE wrong decision in business.

You have launched your dream project and are already putting 14-15 hours a day to make it a success. You are juggling many hats in the start as you are short-staffed and short of funds.

What is one thing which you can avoid to save yourself from more sweat and losses?

Wrong decisions!

You may ask, “That’s simple Zeeshan, no one wants to take wrong decisions – What are wrong decisions?”

My take on this is, any decision which is not taken is the wrong decision.

WHY?

Wrong decisions can be always corrected, but time gone cannot be reversed.

In new businesses, the ONE thing which you lack is time. Running out time means, running out energy and running out of funds.

So next time, whenever you get stuck,  think over it properly m decide and move forward!

IMG_20180603_210333_930.jpg Continue reading Avoid this ONE wrong decision in business.

This game is not for the weak-hearted!

My friends generally ask me how can I consistently keep on working with start up projects without losing enthusiasm.

The reason is that I have understood the mindset of start-ups.

I have understood that corporate mindset is irrelevant in new businesses.

It is more about the process and enjoying the journey.

I have fallen in love with the process and the consistent grind and in the world of new businesses -if you love the process you will OWN the outcome!

 

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Are you willing to pay the price of success?

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Why businesses are done?

There is this unusual excitement trending everywhere with buzzing words like ” Start-ups”, ” Investments”, ” Angel Investments”, Round A , Round X and so on.

 

In the whole scheme of raising funds and making businesses, unfortunately Startups are forgetting that the core idea of business is not to wait till the next round of funding…

but the idea of launching businesses is to generate monies.

Its as simple as that!

There are high chances of failure if the mindset is not about “each and every strategy  led with a thought of generating money for the company”.

Below is a glimpse of my recent talk on ” Scaling Start-ups”  at Gloria hotel, where I was invited to address a selected crowd of entrepreneurs and start up founders.