Friday 26 February 2016

An entrepreneur needs to understand these cost aspects of their SMB business

All over the world and predominantly in India, 1 out of every 10 woman is establishing a business that will monetize her unique skills.  A quick sampling reveals that Baking, Craftswork, Event Management, Tailoring and food startups have all got a Female spearheading it.  When a team of men and women are involved in a startup with VC funding, there usually is a Financial Plan and a P/L associated with it. However, when individual women run the business from their home or from a small retail, usually there is not much financial planning and in a few years of incubation the business is either thrown out by a competition or the business runs into a loss. Generally in India, women aspire to do more and more of their business without looking into how the financials are performing.

Here are some tips for budding entrepreneurs to have in mind as they rise:

1. Business Plan. Never start a business without a basic financials in place. It is an absoulte must to have a Costing done and a forecasted best case and worst case scenario of how the sales could go.

2. Costing. The Costing should always involve Cost per each item sold. For instance, if you are selling Cakes, it is absoulte must to account every cost that goes into the making of "A" cake.  Without this excercise, the pricing may not always be accurate. The costing should cover every angle of cost including labor, marketing and other Operational expenses and overheads.

3. Inventory Management An understanding of the way the price of the inventory changes with seasons. Going back to the food business example again, there could be times when the cost of the inventory such as specific fruits, vegetables and other inventory could peak. It is important to make your business flexible to adapt to these changing market conditions and minimize the use of heavily prized items.

The second aspect is stocking up. You could very well be selling items that have a trickle of demand all through the year. OR NOT.  Businesses are very seasonal. A food business sees a great demand in weekends over weekdays. More in Festival seasons Vs Dull seasons. A Craftswork business sees a great demand during specific months of the year. Stocking up a lot of inventory not only uses your retail space but could very well make it an ordeal to preserve them. Be very smart about your inventory and it could cutback on your costs.

4. An idea of Operational Expenses.  The biggest drain on the running of your business is the operational costs. Put in simple words, this could include the eletricity charges, water charges, Gasolene charges, taxes, repairs, rents etc. While CAPex is well planned, OPex needs to be very tightly managed to run a profitable business. Keep a track of every operational expense per day and get an idea of how it changes with changing business conditions. Understand the OPex elements of your business and track it every day.

Not managing these 4 quadrants well is a sure fire way for a business to fail.

A lot of business templates are available for free in many sites. A simple excel that you custom make is also a good place to begin with. Do get use to the idea of Business Planning and Cost management. If you need any help on the basic aspects of planning for your business, I am glad to help. Please write to me.

Saturday 13 February 2016

The future of eating could very well be what these start-ups are selling!

Three start-ups have caught my eye and mind. Rightfully so because If I were to summarize 3 major food trends that will catch up India very soon, if not already, I can very well say this:

1. Indulgence without the sugar OR white Sugar replaced with healthy alternatives.
2. Food in a bottle/Box. Indians will replace large meals with single Box alternatives.
3. The replacement of dairy with products made from Nut milk

These 3 different Food Start-Ups funded outside India that have received major funding for further expansion and are being recognized for their uniqueness speak loudly for these three trends. What are these?

1. OppO - Guilt free Indulgence! - A U.K based ice cream maker that has made a breakthrough in ice creammaking by getting rid of the cream and sugar with Coconut oil and stevia leaf. Their research claims that Coconut oil adds the creamy texture required for ice cream replacing the cream and the stevia leaf replaces the sugar. Very true to their brand image, it compares with the calorie levels of just an apple. This is an amazing trend in the right direction which could let us have an ice cream treat everyday! It is sourced by Crowd funding and has received major funds to grow and expand!





2. Soylent - Free your Body! - A breakthrough drink that is now available only in USA and Canada, Soylent combines Soy proteins, Beets and Algal oil topped with Vitamins and Nutrients carries a great message for us! Which is A full day of Balanced nutrition made in 3 minutes at $3/meal. Whoa, that is one hell of a marketing genius at work there. That aside, it cleary sets in a precedence to drink wholesome One Box meals instead of eating a plate full of food.  The product is created in a very clean factory model and is all set to expand across the world.



3. Kite-Hill - Revolutionary Plant Based food. Now please dont get me all wrong that I am promoting some Farming business here. Though I would love to. Kite-Hill offers one of its kind, almond milk and/or Nut milk based variations to dairy products. Their product lines vary from yummy ricotta/Cheese/Yogurt, Cream Cheese spreads, Cheese cakes and more cheese and also Entrees!!
 
 


I would personally love to see these brands here in India and these trends adopted into our everyday lifestyles.

 

Friday 5 February 2016

Great changes in food habits are happening and it is worth following!

I am a great fan of food! I watch only food shows on TV, I spend a minimum 30 minutes to one hour everyday reading about food, health, beauty and overall trends in this space!  I avidly read what nutritionists and health gurus eat in a day, what they do and why they are so successful in life.

Needless to say food plays an overall role in one's success in life. The more careful about your diet that you are, the more energy that is there for you to go after your life's dreams. Food can make or break you. One can get away with not excercising but never from bad eating.

Apparently, the food habits are changing to be more aligned with these thoughts and values. My typical eating in a day goes like this:

As soon as I wakeup a glass of warm water with lime and honey. After a gap of about 40 minutes a strong filter coffee with sugar. Then in an hour a bowl of fruits. If I am not having fruits then a smoothie or a vegetable juice. Then in the one hour typical south indian breakfast such as Poha, Dosa, Upma and the likes. All this is done by 8;45 a.m. Then an hour later around 10 a.m a glass of green tea. Then around 12 ish a lunch with vegetables and salads containing about 12 large spoons of rice. Then at snack time a few biscuits, fried peanuts or some such snack. Then around 6:30 dinner with 2 rotis and a vegetable.

I compared this with the notes shared by a nutritionist in one of her columns. It had exactly 4 iteams. A coffee made from almond milk in the morning followed by a veg smoothie for breakfast, a salad for lunch and some meat and veggies for dinner. Snacks had some healthy brownies or nuts and dessert had a dark chocolate unsweetened.

Clearly I was eating too much.  I now consciusly try to reduce the carb and have more fluids, more protein and more meaningful food than just carbs.

This trend could just be the beginning. We indians tend to think of large meals when we eat, while actually half of it would be enough to keep us alive. There is a major trend of having veggies in a smoothie and salads as whole means that is beginning to sneak in Indian households too! It would not be a surprise if a rice based meal or a roti based meal becomes an one time affair in Indian households. A welcome change and a step towards a healthy life and longevity!!  I would say let us be disciplined about food and let us be consistent on that!!