How do you ensure business sustainability?

It is never easy to run a small business. Tinkering along is critical for the success and sustainability of the business. Consistently monitoring cash flow, utilising social media as a marketing tool, while staying in constant touch with your business associated is a given. As all of this is not possible when you have so much coordination to do, here are a few things you can consider to make your effort more streamlined.

Accounts and bookkeeping
Only a few small businesses can enjoy the luxury of hiring an accountant to update and maintain daily, weekly, and monthly transactions. Else, it’s vital that you set aside the necessary time to keep track of the cash flows. If you lack the financial skills, outsource to a specialised firm, this will help you focus on your business better.

Set your business goals
Similar to keeping the balance sheets in place, setting the goals and objectives of your business is essential to your success. Use these goals as an on-going planning tool to assess your achievements periodically. For instance, try to increase traffic on your business website or blog. More the traffic, more the engagement, more the potential for business growth. Of course, this depends on your specialisation.

Use high-impact marketing strategies
Wasting money on ineffective marketing is easy. Try to find innovative low-budget, high-impact marketing strategies to improve your small business. Test one or two new tactics and see which one perform better adding them to your marketing mix. Social media is an excellent low-cost and low-risk way to promote your business. LinkedIn, Facebook, Twitter, and Instagram have been proven to be great tools to build a social presence and attract attention to your business.

Business presentations are a must
A powerful business presentation can help improve your business performance. Keep it simple so that it is easy for the audience to understand. Use examples and illustrations whenever possible. People can connect better when examples used are relevant to them. Lastly, a dash of humour always helps.

Monitor trends
No business can operate in isolation. Events and changes in the global landscape and even local effect your business. Even things that don’t seem relevant on the surface might have an impact on your business. These could be opportunities and one needs to be alert at all times.

Motivate Staff
Any company is made of people. Talented and motivated staff members can bring on big improvements in the business. Try to assess what motivates your employees to bring in higher levels of performance. Part of this is about giving them a sense of ownership of the business, making them feel important and at the same time, responsible for the tasks assigned.

Don’t expect instant success
Entrepreneurship is a marathon, not a sprint. Therefore one needs to be surrounded with not just positive energies but energetic people too. Also, regular exercise and good physical health beget mental health. This also adds in a positive aspect to your personality.

Know Your Limits
No one is perfect or has the same skillsets. Successful business owners have a clear idea of their limitations. By knowing your entrepreneurial personality type, you can manage your resources and find help in areas of weakness. This is a key driver to success. For example, if you’re great at sales but less experienced with bookkeeping, focus on sales and hire someone else to handle the books.

Always see failures in a positive light
Contrary to the logic, a failure can trigger transformation and help ignite innovation when seen from a positive perspective. Such junctures also help tame one’s ego and make your understanding of business concepts stronger.

Plan your work schedule and vacations
Lastly, discipline is the key to anything in life. So be it reaching office or leaving office on time, discipline is a must. There is more harm in overworking on a regular basis; therefore one has to plan accordingly. Sometimes the best way to improve your business and reignite your passion is to take a vacation.

The Chinese dragon – friend or foe?

Many centuries ago, the world learned from China. For the last hundred years, however, China has been patiently learning from the world. It is now time for the world to learn from China once again. Why do we say so? Read on…

China recently celebrated the 70th anniversary of becoming a communist republic with much fanfare. Back in October 1949, when China was adopting the communist model of societal organisation, India was framing its constitution. In less than four months, India too became a democratic republic. The two nations in their current identities were, thus, born out of the ashes of the colonial world; both adopted contrasting system of economic and social development. In fact, China was at a disadvantage in some aspects of development when compared to India. After seventy years, today China is a superpower in terms of economic and military progress. So what can India learn from China?

What are the key business lessons we can learn from China?

1. China’s customers — Young and dynamic

Today’s Chinese customers adapt to changes quickly, are e-savvy, and are aggressive when it comes to business, keeping personal emotions at bay. This new generation is practical and focused on business only. They are ready to cater to any requirement, local or international and imbibe technology to help cut costs. With Diwali round the corner, Chinese ‘diyas’ and firecrackers would flood the markets selling at half the costs. This is new China. This matters as we are busy showing slogans of new India while the basics are missing. Boycotting Chinese goods is not a solution, confronting them with quality Indian products that are equally affordable is the key.

2. China’s market — Diverse

Intense competition breeds winners with superb capabilities. Today, it’s not about petty Diwali gifts alone, most world-leading companies are competing with local Chinese companies even in China itself. This has led to the development of world-class capabilities as they evolved. Huawei, the telecoms equipment company, is an excellent example. They have not only emerged as the world’s best, but even provoked the US government to take action, protect their own companies in the US. Innovation and domestic scale did help Huawei to emerge supreme. Today’s new India really needs to wake up and fight the dragon using price and scale as a weapon. Administrative protection will only dilute the competitive edge we have acquired over the years, after embracing globalisation.

So what led to this transformation in China?

China has consistently focused on social development. This has helped develop a vast pool of human capital that catapulted economic reforms. On the other hand, education and health have always been an area for concern for India. By the time India began undertaking economic reforms in the early 1980s, India’s health and education levels were still poor. An average Indian died at the age of 54 in 1980 while merely 43.6 per cent of its population was literate. By comparison, life expectancy in China was 64 years and its literacy rate was 66 per cent, figures that India can only dream of.

So this Diwali, do not look at Chinese good with contempt, rather try to learn from these small but swift players on how to lead the battle for global dominance. If we could motivate our taste buds to accept their food, we surely can learn and implement their business strategies into our commercial functioning as well.

If you are keen on starting up your own business venture and require assistance or guidance with regard to registering your company, just let us know and our team of experts will be there to guide you through it for a nominal fee. Please do call Rushabh Vora at +91 9619776461 or e-mail at info@peseko.com.

How to start a business from Scratch?

First and foremost, select a name for your business and make it a legal entity. If the name gets approved better book a domain name under the same (that too at the earliest possible). To start a start-up business from scratch you need to follow a process.

Register your start-up business
1. Decide and lock on the name of the registering name of the company
2. Apply for A DIN (Director Identification Number) and DSC (Digital Signature Certificate)
3. Company Incorporation
4. Apply for PAN/ TAN

If this is a sole proprietorship business there is no need to register the business, instead, make sure that the proper licence is acquired from the governing bodies.

How to Register a Company in India?
Registering a company in India is now a simple 4-step process. Here is what you will need to acquire:i.  A  Digital Signature Certificate (DSC)
ii.  A Director Identification Number (DIN)
iii.  Registration on the MCA Portal or New user registration
iv.  Certificate of Incorporation

Hope this helps. If you still need assistance or guidance with regard to registering your company, just let us know and our team of experts will be there to guide you through it.

If you still require assistance or guidance with regard to registering your company, just let us know and our team of experts will be there to guide you through it for a nominal fee. Please do call Rushabh Vora at +91 9619776461 or e-mail at info@peseko.com.

Bank mergers: How is it going to impact you?

ANCHOR BANK AMALGAMATING BANK
Punjab National BankOriental Bank of Commerce,
United Bank of India
Canara BankSyndicate Bank
Union Bank of IndiaAndhra Bank,
Corporation Bank
Indian BankAllahabad Bank



After the economy posted an all-time low GDP growth of 5%, the Government announced the merger of 27 public sector banks bringing the number down to 12. As digital security is utmost critical here, banks may take 2-3 years to standardise core technology, products and customer applications before the merger can actually migrate to newer systems.

Here is how you are likely to be impacted as a consumer:
1. Get ready to change your cheque books as the various banks get merged. While the existing cheque books may remain valid for some time, ultimately they will be replaced with the cheque books of the merged entity.

2. You would have given your bank account numbers and IFSC codes for various financial transactions — auto credit of dividends via ECS, auto-credit of salary, auto-debit of various bills/charges etc. Unless these accounts are seamlessly merged into the financial system of the newly merged bank, you would be required to change the details of your bank given for these purposes. A few years back, when five associate banks of State Bank of India (SBI) were merged, IFSC codes and names of 1,300 branches were changed. The banking behemoth has changed the names and IFSC codes of branches located in major cities such as Mumbai, New Delhi, Bengaluru, Chennai, Hyderabad, Kolkata and Lucknow. Those who had auto-debits running with these banks like systematic investment plans (SIPs) in mutual funds were impacted. This could be an issue that account holders of the banks that will be merged recently.

3. Credit/debit cards issued by the merging banks may have to be exchanged for those of the merged entity although the former is likely to remain valid for the interim period to ensure no disruption in services.

4. Paperwork and keeping financial trail of fixed deposits made will increase a bit as these will be transferred into the merged bank.

5. It is not clear what will happen to the interest rates of those who have loans running with these banks as the MCLR rates are different for different banks.

6. Shareholders of the publicly listed banks will be impacted. How much the respective shareholders will be impacted will be known once the swap ratios are announced.

7. Branch network would become larger so access to bank branches should become easier. This is provided with the merged entity does not shut down all branches of merging banks. The combined entity of Punjab National Bank, Oriental Bank of Commerce, and United Bank of India will become the second-largest PSU bank in the country with the second-largest bank branch network with 11,437 branches.

8. Bank of India, Central Bank of India will continue as is. Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab and Sindh Bank will also continue to operate as is.

Basics of PSU bank mergers

In another round of boosters for the economy, Finance Minister Niramala Sitharaman announced the amalgamation of 10 public sector banks into four big banks a few days back. After this, the total number of Public Sector Banks in the country will come down to 12 from 27 banks. An INR 55,250 crore upfront capital for credit growth & regulatory compliance to support the economy was also announced. The government calls it as ‘unlocking potential through consolidation’. 

The government has listed three broad gains from the consolidation. The first benefit will not only result in an enhanced capacity to increase credit or lend but also help in capacity building, especially in project appraisal, risk management and monitoring. The second gain the Government claims is strong national presence and global reach as competition from private banking institutions is eating into the share of PSBs, thanks to better digitisation, faster processing of loans, and much better customer service. The third potential gain is the operational efficiency gains that reduce the cost of lending as banking products and offerings have changed significantly in the last decade.

What is worrying is that these merger announcements don’t address the core structural and fundamental issues plaguing the PSBs. No retrenchment has taken place post-merger of Bank of Baroda, Dena Bank and Vijaya Bank; staff has been redeployed and best practices in each bank have been replicated in others. This action is likely to impact economies of scale and efficiency of operations over the medium-long term positively.

How to choose mutual funds that is best for you

  1. First assess your financial goals and limits: You must assess your limits on how much you would want to invest in, Also, assess what are your financial expectations from the investments and the term period.
  • Consistency in investment process: Investment in mutual funds should be regular and consistent. Your asset management company would offer services such as tracking, online investing information and receiving daily SMS alerts.
  • Right timing: One should have the knowledge on when is the right time to buy or when to sell. Often, when the markets go down, people panic and pull their investments out which result in a chaos. On the other hand, this situation could be an excellent point to pick up stocks as their valuation would only rise from there on.

So overall, if you have a low risk appetite, or if you have a long term investment in mind with a committed amount being set aside each month, then this could be your choice of investment. For more details on mutual fund investments or free consultation on how much to invest and which portfolio combination to choose from, do leave your contact details on the form below.

Benefits of mutual funds investments

Are you looking at investment opportunities for your future? The best way is to invest in mutual funds as it is flexible as well has a lesser risk when compared to other instruments.  Before you park your money somewhere else, you must assess whether an individual could invest his/her money in stocks, bonds, money market securities or in the other traditional instruments such as public provident funds, fixed deposits etc. as an alternative.


ADVANTAGES OF MUTUAL FUNDS:

  • COST:

Mutual funds are one of the best investment options as there are many advantages. For example, when someone hires a portfolio management service firm, then he/she will be charged 2% 3% of the total investment every year by the fund managing firm and the rest will be charged as a share from the profits.

  • SIMPLICITY:

In today’s world, access to information and data makes investing much more simpler and reassuring as an option. A lot of research and data is available, all you have to do is analyse the performance and take your call based on your risk appetite.

  • CONVENIENCE AND FAIR PRICING:

Mutual funds are very easy to buy as they require a very low investment amounts and are traded only once a day.

PLANNING FOR YOUR RETIREMENT WITH MUTUAL FUNDS

  • SYSTEMATIC INVESTMENT PLAN: You will get good at investing in equity only when you have a more controlled approach. Similarly, a systematic planning approach is the best way to go for mutual funds as well. Therefore SIPs are the best way when it comes to investing, regularly and with a fixed amount.
  • ELSS FUNDS: This scheme is favorable for long-term investors and has tax savings benefits to take advantage of.
  • DIVERSIFIED EQUITY FUNDS: This is an aggressive fund where funds are invested in diversified stocks. It fetches high returns and therefore is higher on the risk scale. This approach is good for long term investors who are young and have age as an advantage.

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Converting risks to fetch returns

Risk in finance means that the actual return on investment can be lower than the expected return or it can even be a situation where you have to face a loss. Risk is important for the growth of a firm because with the same policies and without implementing any changes, a business can’t expect to earn higher returns. The higher is the risk, the higher is the expected return. Similarly, the lower is the risk, lower is the expected return.

Risk can never be separated from returns. Investment and risk go hand in hand. Where there is an investment, there is a risk associated with it. The concept behind this is the risk-reward concept, which states that greater the risk an investor takes, higher the profits he earns.

Returns in the extreme situations can be gaining more than expected or can even be losing the original investment. It is the money that is either made or lost in investment. This is a process every business venture has to go through, therefore it is important to analyse the risk ratio for that given company before investing.

Outcome of following this practice:

Positive-Earning a profit from an investment.

Negative-Bearing a loss.

How to assess communication indicators

When into investments specially in stocks, it is critical to be alert to analyse every form communication beyond just company formal announcements. In today’s age of digital connectivity, it is important to be aware of how our thinking patterns change during the course of 24 hours daily cycle. Studies have indicated that there is a pattern and hence a mere twitter message from a CEO also needs to be assessed with regard to what time it was tweeted.

Below is a basic guide on how to analyse beyond the mere words they carry.

Ambitious people usually get active early in the morning (5 am or 6 am). Therefore, early morning Tweets are usually are more logical and analytical.

However, people who Tweet during the wee hours of the morning (3 am or 4 am) tend to write more emotional and impulsive messages. These messages usually carry direct emotions connected with their current life situations. Generally, this time period is said to be the ‘devil time’, and thus may indicate failure of work.

When assessing which could be the best investment option, leave no stone unturned in the hunt for hints. Proper research beyond the ordinary is what makes a good investment decision a better one. For more on how to assess hidden hints that will help you with your investment decisions, do reach out to us filling in the details on the form given below.

Getting to know working capital management better

Getting to know working capital management better

How does a company measure liquidity, operational efficiency, and its overall financial health? Working capital includes both current assets and current liabilities and is calculated as current assets vs. current liabilities. Between the rating 1.2 and 2.0, is what a working capital ratio is considered to be safe.

Below 1.0: Negative working capital ratio.

Above 2.0: Current assets are not used effectively.

What is Working Capital Management?

A company develops some strategies for the proper utilisation of the two components of working capital i.e. current assets and current liabilities which is known as Working Capital Management. The main objective of WCM is to make sure that sufficient cash is available to meet the company’s short-term requirements. A company with proper working capital management can gradually increase its earnings and profitability and can also help in the proper and smooth functioning of business operations.

Components of Working Capital Management (WCM):

The financial health of a company can be measured by the working capital ratio indicate the liquidity of the company and how well it can meet its financial obligations. A negative working capital ratio can hamper the growth of the firm. On the other hand, a higher working capital ratio indicates that assets are not being used efficiently and effectively. Maintaining an effective working capital ratio in a direct indicator of help assess the company financial health.

The next component of WCM is inventory management. Production has to be to increased or decreased according to the consumption behaviour of the consumers also keeping in mind the logistics time flow. Therefore products sold, in-stock and replenished with the help of inventory turnover ratios should also be monitored.

Though WCN is not the only indicator an investor should monitor, it acts as an effective toll to judge the financial health of the company in times to come. Other assessments such as ‘management of debtors’, ‘credit policies’, ‘collection ratio’ (the average number of days a company takes to infuse cash) would help analyse a company’s’ financial outlook better.

In short, every company should have a proper system for Working Capital Management monitoring flow chart in place to assist the functioning of the firm and also to help it to grow.