Startups have become the lifeblood of many nations and the cornerstone of many economies. In fact, startups are a source of new jobs across the globe and bring the markets new innovative ideas and solutions. Moreover, they boost competition in markets by developing new and similar products which benefit the consumers. Despite the increasing trend of self-employment in many countries, many fail to stay in business as it is not an easy process to develop a successful one. Consequently, this article aims to give a brief of the key building blocks for starting a successful business.
Self-Assessment
The first thing an entrepreneur should start with is self-assessment. Before launching your business, you need to realize whether you have what is needed for your business. Start by listing the advantages and disadvantages of having your own business. And you need to compare between being an entrepreneur and full-time/part-time employed (in case this is your current situation) given your current circumstances (ie. marital status, financial situation). There are a lot of personality tests that could help you in assessing and knowing yourself. Answering the below questions accurately and honestly may help in making your decision:
– Why do I want to launch a business?
– Specifically, what type of business do I want to launch?
– Why do I believe I can make this kind of business work?
– Why do I believe this kind of business is sustainable?
– Do I have the needed educational level, skills, and experience to succeed in this field? If not, can I attain these skills and competencies before starting my business? How?
– What is my true aim and/or the objective I hope to attain with this business?
– What is the financial objective I am pursuing to attain?
– If I will need financing, do I have enough resources and credit for the startup?
– What are my strengths and weaknesses?
– What is the state of my physical, mental and emotional health, and stamina?
– Do I have the required skills and knowledge to manage the daily operations of a business?
– Am I up to date with the latest technology necessary to be competitive in this industry?
– What sacrifices and risks am I willing to take to be successful?
– Will I be able to maintain a work-life balance? How?
Figure 1 below shows some advantages and disadvantages that you could consider as suggested by Gregory and Patricia Kishel in their 2005 study, How to start, run and stay in business:
This stage does not refer to extensive market research but rather to the start of exploring the industry/market in which you want to launch your business, especially if you don’t have a clear and solid business idea. This phase suggests networking and connecting with different people or stakeholders to have a clear view of how things are going in the industry. At the same time, this will give you a chance to build on your current network as well as gain tips and recommendations for getting your business started. This could be done through several means such as scheduling meetings with owners in the same field or attending conferences and events.
The Start-up Canvas
This canvas is one of the techniques that entrepreneurs could use to sketch their initial ideas for their business idea. The start-up canvas includes the components shown below.
When you reach this stage, it means that you have decided to go on with your business and do more extensive research to better understand your business. There are two types of research: secondary or desk research, and primary research.
You might want to start first by doing desk research and checking documents such as reports, articles, and press releases to give you some insights into your industry. Then, you can conduct a market research study or focus group to get more specific insights from the market. In this case, you can consult a market research agency to conduct the study.
This part is concerned with estimating your costs to launch your business. According to the Michigan Small Business Development Center, the following contribute to the reason as to why many startups fail before they launch their business or soon after launching it:
– An inadequate estimate of the real cost of starting what you are planning to
– Unrealistic anticipation about resources you might hit into; grants, tax incentives, and startup loans are uncommon, competitive, and difficult to acquire
– Miscalculations about how quickly you will start making money; for instance, some businesses may take a few years to start making a profit, so you need to make sure that you will be able to cover your company costs during those years.
Consequently, it is necessary to consider some of the financial analysis tools which many entrepreneurs miss, such as the payback period (refers to the amount of time it takes to recover the cost of investment), internal rate of return, cash flow, profit margin, gross margin, and markup and breakeven analysis. These techniques will permit entrepreneurs to plan their financials ahead of launching their business and avoid financial failure.
Sources of Finance
In this phase, you will have to consider the means for financing your business. There are several sources of finance such as your personal investment (ie. your own money and assets), bank loans, venture capital, business incubators, angels, or grants. You need to take into consideration several factors when deciding on the sources of finance, such as the nature of your business and business size. Some entrepreneurs may decide to continue their full-time/part-time job and work on their businesses slowly to finance themselves while launching their businesses.
Human Resources
This stage helps you to estimate how many employees you need to hire when you launch your business. Which departments do you need to start with? You do not want to hire less or more than what you need. Moreover, you need to consider several factors before hiring your employees, such as the employment labor law, taxes and social insurance exempted from employees’ salaries, and health and safety measures.
Business Plan
The previous stages will allow you to have enough data to conduct an accurate business plan which describes the objectives and goals of your business. This also studies your business idea from financial, operational, and marketing perspectives. In your business plan, you have to fill in the following components: general business information, market analysis (competitive analysis, industry analysis, segmentation analysis, marketing/sales plan), management and operations matters (human resources, operations plan, research, and development plan), cost structure, and financials.
Legal Formation of a Business
When deciding to launch your business, it is important to know the procedures and regulations to legally form your business. First, you need to choose the type of business you are going for. This is based on the country you are establishing your startup in. Based on this, you will be able to identify your tax implications and company registration procedures. It is advisable to do this with a specialized lawyer to guide you through the process.
In conclusion, launching your business is a hectic and risky process that you need to think of very carefully. Take your time whenever you work on any of the building blocks and decide whether you are capable of moving on to the next stage or not. Remember you do not have to start big; you can start small and expand over time. Several startups have started small and now they are some of the most successful startups such as Khan Academy, Udemy, and Slack.
During the past few months, there have been rampant talks regarding the Great Resignation spree, especially in the US and many European countries. Several theories have been put forward on why this phenomenon is happening, such as people wanting their own way of thinking, having freedom from a salaried culture, searching avenues to serve the community based on one’s own value system, and enjoying life leisurely without being shackled. Initial reports in media viewed pay and compensation as an important issue for this turnover, however, it was analyzed later on that pay-related issues was not figuring even on the top ten important reasons for this movement.
Factors contributing employees to leave
If it is not the pay and compensation, then what exactly is driving this phenomenon? According to a study done by MIT, the top five reasons why people resign from their jobs are as follows:
Culture: Employees are more comfortable in organizations where diversity, equity, and inclusion are being promoted. Reversely, employees felt an aversion towards experiences of disrespect and unethical behavior within the company.
Perceived job threats: Due to the prolonged situation brought by the pandemic, the financial position of an organization may be in the red. As such, employees feel that they could get laid off from their job; as a precautionary measure, they start searching for new jobs.
Too much focus on the idea of “innovation”: Currently, there is a focus on innovation and digital acceleration such as Machine Learning and Artificial Intelligence. While employees in an organization talk positively about innovation, they also realize that it is hard to innovate which eventually causes burnout.
Performance recognition: During the pandemic, most employees started working from home. Under this environment, it is difficult to distinguish high-performing employees from the rest, ultimately leading to common minimum recognition and rewards instead of logically differentiated ones.
Response to COVID-19:The response and tackling of the COVID-19 situation by an organization is greatly linked to the confidence and loyalty of their employees.
What approaches can be adopted
Organizations, particularly Human Resources (HR), must take a data-driven approach to tackle this issue, first by determining not just the quantum of people quitting but by finding who exactly has more turnover risk to the company. Of course, approaches will vary from organization to organization, however, there are a few basic steps involved.
First, by quantifying the problem wherein the attrition rate is calculated, it should be analyzed at a granular level. This analysis should show information such as the category of people leaving in terms of function, age, gender, position, experience, or the number of years in the organization. One can use analysis to identify how much of turnover is coming from voluntary resignations and involuntary resignations.
As a next step, the impact of attrition on the key business matrix can be evaluated, including the cost of resignations. This analysis will help in identifying the root cause of the problem and segment of people to be focused on for retention strategy. There could be some obvious reasons such as compensation, promotions, pay increases, rewards, recognition, and training opportunities.
However, to identify softer issues such as trends and blind spots, it needs detailed employees’ feedback and one-to-one interaction. Here, a data-based HR approach is important since it can capture an employee’s mindset and convert it into meaningful analysis. After this step, companies can create highly customized programs for segments of people and identify specific factors to be corrected. The idea is to take care of factors that highly correlate to the attrition rate.
Conclusion
Data-driven strategy for addressing high retention rates is difficult and resource-consuming. On top of that, doing it right is a real challenge since poorly done analysis may lead to wrong corrective actions. Nevertheless, it is worth following a data-driven strategy, especially when you want to implement a targeted retention policy. As a result, organizations can attract talent, reduce talent acquisition costs, and can develop an engaged and motivated workforce contributing from the bottom to the top line.
Customer relationship management (CRM) is a process-oriented approach to the organization’s relationship with its customers. It is an organized effort to identify, understand, anticipate, and meet the customer’s needs to maximize customer lifetime value (CLV). The importance of CRM has increased over the years due to the advent of new technologies that have made it easier for customers to communicate with brands.
With the advancement of technology, CRM has become more important than ever before. This article will help you understand why CRM is such a vital part of any business strategy.
Why CRM is vital to a business
One of the reasons why CRM is so important is because it helps a business understand what they want from their customers. The goal of CRM is to meet customer needs and expectations. To do that, you must know what those needs and expectations are. Understanding your customers will help you better communicate with them. For example, if you have the ability to tell your customers when an item is back in stock or when a new catalog is available, they’ll be more likely to buy it.
CRM also helps businesses identify potential problems before they happen. If you’re able to notice that something about your customer interaction isn’t up to snuff before it escalates into a major issue, then you can address the problem before it becomes worse. This will make your customers happy and help retain them for longer periods of time.
A CRM system can also help develop strategies for things like retention campaigns. Without detailed information about your customers, like their order frequency or total spending amount over time, you may not realize that certain customers should be sent a loyalty offer but aren’t receiving one due to a lack of knowledge on your part. This could result in less spending by that customer and lower lifetime value than expected, which costs the business a loss of income in both the short-term and long-term.
Why CRM is important to the customer
First, CRM is all about the customer, which is why it’s important to the customer. Your company will be more successful if you can identify and satisfy your customers’ needs. You want to provide your customers with the best customer service possible. When they’re happy, they’ll buy from you again, which will result in increased sales for your business.
Second, CRM improves business performance at every level of the organization. This means that employees are happier because they know their work is appreciated. The customers will also appreciate the improvements made because their needs are better fulfilled. This results in cost savings for your business since you’ll spend less money on unhappy customers who no longer avail of your products or services.
Third, CRM makes your company more competitive by providing a wider range of products and services to meet the varied needs of its customers. This way, no matter how many competitors come into your market space or what type of products they offer, there’s always something for everyone in your product line-up.
Fourth, CRM helps businesses better understand their competition by analyzing data on where they are across all aspects of marketing, including social media advertising campaigns and website traffic data. And finally, CRM provides an accurate measurement of CLV so that organizations can tailor their efforts accordingly. It helps them figure out how much time and money should be put into each individual customer to maximize future profits.
Benefits of CRM
It is important to have an organized customer database so you can better understand your customers and their needs. Some of the benefits of CRM include:
Tracking your sales and marketing efforts and measuring ROI
Improving customer retention by providing better service and personalized offers
Identifying the most valuable customers
Segmenting customers into groups that require different kinds of attention or treatment
Making essential decisions about your business strategy with the data collected through CRM
Conclusion
A CRM strategy is an investment. It takes time and effort to set up and it will continue to take time and effort to maintain. However, if you can do this, you can reap the benefits of a CRM strategy. These benefits will depend on your business.
No matter how your strategy is structured, the most important benefit will be increased customer loyalty. You can never be 100% sure that customers will come back, but if you have a CRM strategy in place, you will know how to retain customers and build relationships with them. With the right software and execution, you may see a return on that investment in as little as three months.
The pandemic has been the cause of many shifts in the workforce, such as business strategies, the acceleration of digital transformation, and even employee working environments. The latest trend to take effect across multiple industries during the second half of 2021 is the Great Resignation. Mostly associated with the US market, this trend saw a record high of 4.5 million American employees resigning in November 2021.
This movement of mass resignation can be due to several factors, including a company’s lack of response to the COVID-19 situation, job insecurity due to reorganization, and burnout caused by the pressure to constantly innovate. An analysis from MIT showed that the main reason of the mass attrition is due to toxic corporate culture. There are several indicators of toxic work culture, including a lack of appreciation towards employees – a factor that is, according to a survey by PlanBeyond, the driving force as to why people are quitting.
Needless to say, many companies have incentive programs and rewards systems to show appreciation towards their employees, but this might not be enough. The owner of Leadership Refinery, Jill Hauwiller, suggests taking it a step further by practicing gratitude in the workplace during this time of high attrition.
Fostering gratitude in the workplace
Practicing gratitude is more than just a simple “thank you.” According to the Greater Good Science Center, gratitude is described as a recognition of goodness outside one’s self; in the case of the workplace, it is recognizing the “efforts of other people.”
Apart from the fact that employees generally want to know that their hard work is appreciated, gratitude has other benefits, such as boosting the morale of the individual and the team as a whole. This can positively impact their motivation towards work productivity. This also develops trust and openness among colleagues and builds an employee’s self-worth within the organization, leading to a more positive work environment.
It is clear that employees today would rather work for organizations that have a positive working culture. To achieve this, top management can take the first step by supporting the practice of gratitude in the workplace and lead by example to encourage employees to do the same. Here are some practices that can help.
Embrace gratitude. It is important that upper management show their gratitude towards employees to start building a positive relationship with the team. Rather than keeping track of failures, recognizing the successes done by each team member – no matter how small – can influence and motivate employees to do better at work. This can be done by genuinely acknowledging and appreciating the team’s work during a meeting or supporting their career development. Maintaining a gratitude journal can also help refocus on how much the team has already done.
Involve everyone in the conversation. Each employee would want to be heard and know that they have a say in the work being done. Listening actively to each member of the team and acknowledging ideas without negativity is another gesture of gratitude. Creating a space where people can brainstorm freely without judgment can also encourage everyone to contribute to the conversation.
See beyond work achievements. Oftentimes, people are more appreciative of the output or work done for them. Instead of just being appreciative of a finished product, show gratitude towards who they are as a person through small gestures, such as giving tokens of gratitude or even as simple as treating them to coffee. This also signals employees that they are genuinely valued in the company and will be more likely to engage further at work.
Show consistency. Gratitude is not only done during successes or when a project is finished. For gratitude to be part of the company’s culture, the organization would need to show it consistently to their employees. Offering programs in building that culture, such as deep sharing sessions, having team-building activities across the organization, and encouraging gratitude journaling, can help in showing consistency.
In these uncertain times, people need assurances, such as recognizing their value to the organization. Having a genuine attitude of gratitude can cultivate an individual’s morale and worth. Once leaders are able to practice gratitude towards their team, involve them in decisions, realize each member’s worth as an individual, and continue to support this cause, it can be a step towards creating a positive working environment that people want to stay in.
When used effectively, data can bring valuable improvements in all areas, including Human Resources (HR). Hugely relevant data is to be found in the area of human capital and is usually collected and managed by the HR department in your company. In essence, all organizations seek to keep top performers while reducing the number of low performers as much as possible. The first thing that comes to mind when discussing measurement in the HR area is the Turnover Rate.
Turnover Rate is a common organizational measurement that tracks the loss of talent in the workforce over time, and it may also be used to gauge an organization’s culture. Employee turnover encompasses resignations, layoffs, terminations, retirements, relocation transfers, and even deaths. Businesses frequently measure their employee turnover rate to estimate its impact on production, customer service, and even morale. Turnover is frequently referenced negatively, owing to its high expense of replacing personnel; however, it is a natural part of the employee life cycle and organizational renewal.
Now, how can data be used for maximum insight from employee turnover?
Gather internal HR data.
Preparing the data is always the first step. If your organization has an HR Information System (HRIS), you should be able to simply get the data and elicit the desired reports from combining different available metrics. However, if your organization does not have an HRIS, the HR department should be able to provide relevant data that can be analyzed.
The turnover data you require is the headcount of the organization, as well as the record of persons who have departed the organization: employee name, date of departure, and position should all be included in the record. If you can gather supplementary information, such as the reason for leaving, the direct manager, and so on, it will help to improve the depth of analysis.
Document and organize the data properly.
After obtaining the turnover data, it is advised that you set up a separate storage folder for this data. It should be well-documented, including periodic details (e.g. for the year 2021). With a well-structured document system, you will be able to access it and even repeat the procedure for the next period.
Run the analysis of data at various levels of granularity.
This stage is dependent on the data you have available as well as your objective. The number of separations and headcount are the most vital components in calculating the Turnover Rate. The number of departures divided by the average employee headcount is a typical formula for calculating the turnover rate.
If your data is much more detailed, you can perform a more granular analysis, such as turnover by month and structure. This allows you to gain more specific insight rather than an overall view of the organization. Another example of granular analysis is examining the number of separations and visualizing it by using Structure. The graph will tell you whether there is a certain Structure that needs extra attention; you can also try by Manager, by age, and so on.
This is only a rough idea of how you might use your own internal data to enhance your organization’s retention and engagement. The possibilities for expanding the turnover analysis are limitless. A genuinely effective, high-value data initiative, on the other hand, requires a comprehension of data dynamics as well as how to apply today’s best practices to carefully utilize and assess data.
