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Messages - rakibul
1
« on: August 01, 2019, 09:32:04 AM »
7 Human Resource Management Basics Every HR Professional Should Know#1. Recruitment & selection
Recruitment and selection are arguably the most visible elements of HR. We all remember our first interview, right?
Recruiting candidates and selecting the best ones to come and work for the company is a key HR responsibility. People are the lifeblood of the organization and finding the best fits is a key task.The request for new hires usually starts when a new job is created or an existing job opens up. The direct manager then sends the job description to HR and HR starts recruiting candidates. In this process, HR can use different selection instruments to find the best person to do the work. These include interviews, different assessments, reference checks, and other recruitment methods.Sometimes, when there are a lot of candidates, HR may deploy preselection tools. These tools help to separate the wheat from the chaff when it comes to suitable candidates. The candidates that are successful then continue to the next round, where they are interviewed and receive a more in-depth assessment.
#2. Performance management
Once employees are on board, performance management becomes important. Performance management is the second HR basic. It involves helping people to perform better in their jobs.Usually, employees have a defined set of responsibilities that they need to take care of. Performance management is a structure that enables employees to get feedback on their performance – with the goal to reach a better performance.Examples are formal one-on-one performance reviews, 360-degree feedback instruments that also takes into account the evaluation of peers, clients, and other relations, and more informal feedback.Usually, companies work with an annual performance management cycle, which involves planning, monitoring, reviewing, and rewarding employee performance. The outcome of this process enables the categorization of employees in high vs. low performers and high vs. low potentials.Successful performance management is very much a shared responsibility between HR and management, where usually the direct manager is in the lead and HR supports. Good performance management is crucial, as employees who consistently underperform may not be a good fit with the company and/or culture and may have to be let go.
#3. Learning & development
If employees struggle to perform well in certain areas, learning and development can help to improve their performance. Learning & development (L&D) is led by HR and good policies can be very helpful in advancing the organization towards its long-term goals.Many organizations have pre-defined budgets for L&D efforts. This budget is then distributed amongst employees, with trainees, future leaders, and other high potentials often receiving more training opportunities than others.
A well-known framework that connects performance management with L&D activities is the 9-Box grid. Based on people’s performance and potential ratings, different development plans are advised.Learning and development
#4. Succession planning
Succession planning is the process of planning contingencies in case of key employees leaving the company. If, for example, a crucial senior manager quits his/her job, having a replacement ready will guarantee continuity and can save the company significant money.Succession planning is often based on performance ratings and L&D efforts. This results in the creation of a talent pipeline. This is a pool of candidates who are qualified and ready to fill (senior) positions in case of someone leaving. Building and nurturing this pipeline is key to good people management.Succession planning
#5. Compensation and benefits
Another one of the HR basics is compensation and benefits. Fair compensation is key in motivating and retaining employees.
Compensation can be split up in primary compensation and secondary compensation. Primary compensation involves directly paid money for work, which often is a monthly salary and sometimes performance-based pay.Secondary benefits are all non-monetary rewards. This can include extra holidays, flexible working times, day-care, pensions, a company car and laptop, and much more.
#6. Human Resource Information System
The last two HR basics are not HR practices but tools to do HR better. The first is the Human Resource Information System, or HRIS. An HRIS supports all the cornerstones we discussed above. For example, for recruitment and selection an Applicant Tracking System, or ATS, is often used to keep track of applicants and hires.For performance management, a performance management system is used to keep track of individual goals and put in performance ratings.For L&D, a Learning Management System (LMS) is used for the distribution of content internally, and other HR systems are used to keep track of budgets and training approvals.For compensation, a payroll system is often used, and there are also digital tools that enable effective succession planning.All these functionalities can often be done in one single system – the HRIS. Sometimes, however, the management of these functionalities is split up into different HR systems.The bottom line here is that there is a significant digital element to working in HR which is why the HRIS is the final element when we talk about the HR basics.
#7. HR data and analytics
The last of the HR basics revolves around data and analytics. The last half decade, HR has made a major leap towards becoming more data-driven.The Human Resource Information Systems we just discussed is essentially a data-entry system. The data in these systems can be used to make better and more informed decisions.An easy way to keep track of critical data is through HR metrics or HR KPIs. These are specific measurements that answer how a company is doing on a given measurement. This is referred to as HR reporting.This reporting focuses on the current and past state of the organization. Using HR analytics, HR can also make predictions about the future. Examples include workforce needs, employee turnover intention, the impact of the (recruitment) candidate experience on customer satisfaction, and many others.
By actively measuring and looking at this data, HR can make more data-driven decisions. These decisions are often more objective, which makes it easier to find management support for these decisions.Reference:https://www.digitalhrtech.com/human-resource-basics/
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« on: July 28, 2019, 03:23:41 PM »
Challenges before IoT in Bangladesh
The year 1990 brought a new dimension to the world of technological advancement when the modern internet, invented by computer scientist Berners-Lee, with World Wide Web (www) was introduced to the world. Since the invention of the internet the world has been experiencing many innovative internet-based services and solutions. Bangladesh has welcomed internet technology, as proven by over 8.7 crore internet subscribers enjoying such services.But internet has advanced its presence from desktops to laptops to smartphones. It has, moreover, flourished its essence by creating Internet of Things or IoT. IoT refers to the network of physical objects with an IP address for internet connectivity and communicating with other Internet-enabled devices and systems.IoT has legally entered Bangladesh with a directive issued by the Bangladesh.
Telecommunication Regulatory Commission (BTRC) in April this year. The BTRC mentioned nine sectors where IoT technology can be used in the country: smart building, industry automation, smart grids, water management, waste management, smart agriculture, telecare, intelligent transport system, environment management, smart urban lighting and smart parking.However, there are five challenges before IoT in the country: lack of IoT-supportive internet connectivity; lack of IoT-skilled human resources; lack of availability of smart home assistant appliances and compatible services; lack of power resources and finally lack of financial support.Seamless internet connection is mandatory for enabling IoT systems or devices. That is our first identified challenge Bangladesh is facing, to which an executive, business development of Cloudly InfoTech agrees. Although recently Bangladesh successfully tested 5G mobile internet connectivity within a specific restricted circumstance, there is lack of even a complete 3G penetration throughout the whole country. Especially outside the metropolitan cities like Dhaka or Chattagram the internet access and network quality are quite problematic.The 2nd challenge facing the country is technologically skilled personnel. Bangladesh lacks enough expertise in IoT. There are some attempts to train personnel in IoT by various institutions like the BRAC University, Grameenphone in collaboration with IEEE, Datasoft, Bangladesh Skill Development Institute, Global Skills Development Agency. However, there is a need for higher level of skilled workers in IoT in order to reap benefits across the nine sectors as outlined by the BTRC.The 3rd challenge is availability of IoT devices and their compatible services. IoT-enabled smart home service requires home assistants like Google Home or Alexa which are still not fully functional in the country as online applications like YouTube Music, Spotify, Google play Music and so on are not accessible through such smart home assistant products. Moreover, lack of IoT enabled appliances such as lights, speakers, locks, thermostats and sensors magnifies the struggle to establish a smart home system in Bangladesh. However, few electronic retail shops are selling smart lights and locks, mostly Chinese, but they are expensive for the unaware consumers. Agreeing to this, experts opined that the mindset of consumers is very important for accepting a new technology like IoT and currently Bangladeshi consumers lack this mindset.Compared with developed countries, Bangladesh is vulnerable when in matters of seamless electricity supply in the country. It is the 4th challenge. Though electricity supply has reached 90 per cent of the population, far better than what it used to be a decade ago, yet the requirement of seamless continuous power supply for IoT devices and operation is a big challenge. With Rooppur Atomic Power plant under construction, the hope for higher and uninterrupted power supply can be imagined after 2023.The 5th challenge is the financial challenge. An IDC report shows that IoT is an expensive technology of US$ 772 billion worldwide and progressing towards the 1.0 trillion USD mark in just two years. The technology requires huge spending to create and operate devices. Even with BDT 500 billion of investments in IT sector of Bangladesh, there is no specific data to find out the amount invested in IoT, but our assumption based on the current IoT products and services available in the country is that it could be less than 5. 0 per cent of the BDT 500 billion. Even with this assumed investment amount, as an executive of DataSoft complains, the government's current policies are one of the barriers to implementing IoT on a commercial level.Regardless of all these challenges, companies like DataSoft, Cloudly InfoTech, AblombTech, Walton are trying to lay the foundation for IoT industry in Bangladesh.DataSoft launched its state-of-the-art IoT laboratory on November 13, 2016 in Dhaka. DataSoft is also establishing 10,000 smart homes in Tokyo, Japan using the next generation IoT solutions what can be termed a spectacular leap for the country's IT industry. They also signed an agreement with the Ministry of Transport and Communication Channels of Democratic Republic of Congo (DRC) to advise and install IoT-based toll management solution for its Matadi Bridge.Cloudly InfoTech, being the first AWS partner in the country, is also gaining credibility for its Business and Consumer IoT products and services such as Smart home, Smart building, Smart factory, Smart farming, Smart warehouse, Smart Campus in the local and global market with Indian, American and Chinese partners providing devices, installation and maintenance services.AplombTech is another local company that provides smart switch, different types of smart lights, smart camera, smart curtain and smart tank.Walton has introduced smart air conditioner recently; Gadget & Gear is selling smart home assistants like Google Home, Amazon Alexa while Samsung has brought smart washer in the country.In order to overcome these challenges, a Datasoft executive suggests for the government to convert hundreds of government-commissioned homes to smart homes. Other required support is already available. Also, investments, specifically for the IoT technology can be encouraged by the government from various public and private sectors.Reference:https://www.thefinancialexpress.com.bd/views/challenges-before-iot-in-bangladesh-1532880691
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« on: July 27, 2019, 09:39:09 AM »
How Startup Funding Works – InfographicA hypothetical startup will get about $15,000 from family and friends, about $200,000 from an angel investor three months later, and about $2 Million from a VC another six months later. If all goes well. See how funding works in this infographic:
First, let’s figure out why we are talking about funding as something you need to do. This is not a given. The opposite of funding is “bootstrapping,” the process of funding a startup through your own savings. There are a few companies that bootstrapped for a while until taking investment, like MailChimp and AirBnB.If you know the basics of how funding works, skim to the end. In this article I am giving the easiest to understand explanation of the process. Let’s start with the basics.
Every time you get funding, you give up a piece of your company. The more funding you get, the more company you give up. That ‘piece of company’ is ‘equity.’ Everyone you give it to becomes a co-owner of your company.
Splitting the Pie
The basic idea behind equity is the splitting of a pie. When you start something, your pie is really small. You have a 100% of a really small, bite-size pie. When you take outside investment and your company grows, your pie becomes bigger. Your slice of the bigger pie will be bigger than your initial bite-size pie.When Google went public, Larry and Sergey had about 15% of the pie, each. But that 15% was a small slice of a really big pie.
Funding Stages
Let’s look at how a hypothetical startup would get funding.
Idea stage
At first it is just you. You are pretty brilliant, and out of the many ideas you have had, you finally decide that this is the one. You start working on it. The moment you started working, you started creating value. That value will translate into equity later, but since you own 100% of it now, and you are the only person in your still unregistered company, you are not even thinking about equity yet.
Co-Founder Stage
As you start to transform your idea into a physical prototype you realize that it is taking you longer (it almost always does.) You know you could really use another person’s skills. So you look for a co-founder. You find someone who is both enthusiastic and smart. You work together for a couple of days on your idea, and you see that she is adding a lot of value. So you offer them to become a co-founder. But you can’t pay her any money (and if you could, she would become an employee, not a co-founder), so you offer equity in exchange for work (sweat equity.) But how much should you give? 20% – too little? 40%? After all it is YOUR idea that even made this startup happen. But then you realize that your startup is worth practically nothing at this point, and your co-founder is taking a huge risk on it. You also realize that since she will do half of the work, she should get the same as you – 50%. Otherwise, she might be less motivated than you. A true partnership is based on respect. Respect is based on fairness. Anything less than fairness will fall apart eventually. And you want this thing to last. So you give your co-founder 50%.Soon you realize that the two of you have been eating Ramen noodles three times a day. You need funding. You would prefer to go straight to a VC, but so far you don’t think you have enough of a working product to show, so you start looking at other options.The Family and Friends Round: You think of putting an ad in the newspaper saying, “Startup investment opportunity.” But your lawyer friend tells you that would violate securities laws. Now you are a “private company,” and asking for money from “the public,” that is people you don’t know would be a “public solicitation,” which is illegal for private companies. So who can you take money from?Accredited investors – People who either have $1 Million in the bank or make $200,000 annually. They are the “sophisticated investors” – that is people who the government thinks are smart enough to decide whether to invest in an ultra-risky company, like yours. What if you don’t know anyone with $1 Million? You are in luck, because there is an exception – friends and family.Family and Friends – Even if your family and friends are not as rich as an investor, you can still accept their cash. That is what you decide to do, since your co-founder has a rich uncle. You give him 5% of the company in exchange for $15,000 cash. Now you can afford room and ramen for another 6 months while building your prototype.
Registering the Company
To give uncle the 5%, you registered the company, either though an online service like LegalZoom ($400) [1], or through a lawyer friend (0$-$2,000). You issued some common stock, gave 5% to uncle and set aside 20% for your future employees – that is the ‘option pool.’ (You did this because 1. Future investors will want an option pool; 2. That stock is safe from you and your co-founders doing anything with it.)
The Angel Round
With uncle’s cash in pocket and 6 months before it runs out, you realize that you need to start looking for your next funding source right now. If you run out of money, your startup dies. So you look at the options:
Incubators, accelerators, and “excubators” – these places often provide cash, working space, and advisors. The cash is tight – about $25,000 (for 5 to 10% of the company.) Some advisors are better than cash, like Paul Graham [2] at Y Combinator.
Angels – in 2013 (Q1) the average angel round was $600,000 (from the HALO report). That’s the good news. The bad news is that angels were giving that money to companies that they valued at $2.5 million. So, now you have to ask if you are worth $2.5 million. How do you know? Make your best case. Let’s say it is still early days for you, and your working prototype is not that far along. You find an angel who looks at what you have and thinks that it is worth $1 million. He agrees to invest $200,000.Now let’s count what percentage of the company you will give to the angel. Not 20%. We have to add the ‘pre-money valuation’ (how much the company is worth before new money comes in) and the investment
$1,000,000 + $200,000 = $1,200,000 post-money valuation
(Think of it like this, first you take the money, then you give the shares. If you gave the shares before you added the angel’s investment, you would be dividing what was there before the angel joined.)Now divide the investment by the post-money valuation $200,000/$1,200,000=1/6= 16.7%
The angel gets 16.7% of the company, or 1/6.
How Funding Works – Cutting the Pie
What about you, your co-founder and uncle? How much do you have left? All of your stakes will be diluted by 1/6. (See the infographic.)Is dilution bad? No, because your pie is getting bigger with each investment. But, yes, dilution is bad, because you are losing control of your company. So what should you do? Take investment only when it is necessary. Only take money from people you respect. (There are other ways, like buying shares back from employees or the public, but that is further down the road.)
Venture Capital Round
Finally, you have built your first version and you have traction with users. You approach VCs. How much can VCs give you? They invest north of $500,000. Let’s say the VC values what you have now at $4 million. Again, that is your pre-money valuation. He says he wants to invest $2 Million. The math is the same as in the angel round. The VC gets 33.3% of your company. Now it’s his company, too, though.Your first VC round is your series A. Now you can go on to have series B,C – at some point either of the three things will happen to you. Either you will run out of funding and no one will want to invest, so you die. Or, you get enough funding to build something a bigger company wants to buy, and they acquire you. Or, you do so well that, after many rounds of funding, you decide to go public.
Why Companies Go Public?
There are two basic reasons. Technically an IPO is just another way to raise money, but this time from millions of regular people. Through an IPO a company can sell stocks on the stock market and anyone can buy them. Since anyone can buy you can likely sell a lot of stock right away rather than go to individual investors and ask them to invest. So it sounds like an easier way to get money.There is another reason to IPO. All those people who have invested in your company so far, including you, are holding the so-called ‘restricted stock’ – basically this is stock that you can’t simply go and sell for cash. Why? Because this is stock of a company that has not been so-to-say “verified by the government,” which is what the IPO process does. Unless the government sees your IPO paperwork, you might as well be selling snake oil, for all people know. So, the government thinks it is not safe to let regular people to invest in such companies. (Of course, that automatically precludes the poor from making high-return investments. But that is another story.) The people who have invested so far want to finally convert or sell their restricted stock and get cash or unrestricted stock, which is almost as good as cash. This is a liquidity event – when what you have becomes easily convertible into cash.There is another group of people that really want you to IPO. The investment bankers, like Goldman Sachs and Morgan Stanley, to name the most famous ones. They will give you a call and ask to be your lead underwriter – the bank that prepares your IPO paperwork and calls up wealthy clients to sell them your stock. Why are the bankers so eager? Because they get 7% of all the money you raise in the IPO. In this infographic your startup raised $235,000,000 in the IPO – 7% of that is about $16.5 million (for two or three weeks of work for a team of 12 bankers). As you see, it is a win-win for all.
Being an Early Employee at a Startup
Last but not least, some of your “sweat equity” investors were the early employees who took stock in exchange for working at low salaries and living with the risk that your startup might fold. At the IPO it is their cash-out day.Reference:https://blog.adioma.com/how-funding-works-splitting-equity-infographic/
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« on: July 27, 2019, 09:24:04 AM »
4 Investment Opportunities For Young Entrepreneurs1.Real Estate.
Investing in real estate can give you the opportunity to gauge the market carefully and create a plan to realize both long and short-term goals. While this market does have some risks, it is usually not as unstable as the stock market, which can be perilous for newcomers. You can also begin with small investments, such as sharing ownership of a summer home or buying a small commercial building to house your company.Working with a real estate broker can help you keep better track of the market’s atmosphere and keep you informed when properties become available. Let your broker know about what kinds of opportunities you are looking for and what gains you hope to make, as this may help him or her find more suitable opportunities for you.
2.Other Entrepreneurs.
Millennials have been universally blamed for destroying certain markets, including the diamond and fast food industry, as they are increasingly putting their money into other ventures. However, these actions are not as destructive as those of the previous generations have made them out to be, and many young entrepreneurs have discovered that investing in other startups can be profitable in more than one way.If you are considering putting some money into other small businesses, one of the most effective ways to begin is by making connections with their owners. Not only can this garner trust within your entrepreneurial network, but it can also help you better understand which companies are most in line with your investment plans and goals.
3.Retirement Accounts.
If you are in your 20s or 30s, you may not be thinking much about retirement at this point. However, there are many advantages to investing in the future, especially if you want to enjoy your golden years by traveling or buying a second home. This can be especially important if you plan to do any long-term investing once your company starts to grow.There are several factors to look into when you first set up a retirement investment fund. First, learn about state and federal contribution limits for each account you want to set up. Both Roth and IRA accounts typically have the same cap until the holder reaches age 50. After that, you may contribute more each year. These accounts are usually quite low risk, which makes them a good choice for you as a young investor.
4.Forex Trading.
If you are looking for an investment opportunity with a higher risk yet provides you with some real-time trading excitement, then you might consider foreign currency exchange investments, or forex. This type of investing allows you to trade around the clock, five days a week, as you trade American currency with those that are used in other countries. The goal is to make trades that result in a gain when currencies change in value.While forex trading can be accomplished without a broker, it is wise to work with one in this market, especially when you first begin. A broker’s advice and assistance can be invaluable and lower forex investment risk, and you can find one on Fx-List.com, where a variety of filters can help you narrow down your search based on your goals.Investing can help you build capital and confidence when you are a millennial entrepreneur. Taking the time to find the opportunity that best suits your investment style and goals may yield big returns and help you avoid some common errors many young investors make.Reference:http://www.youngupstarts.com/2019/03/08/4-investment-opportunities-for-young-entrepreneurs/
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« on: July 22, 2019, 12:03:43 PM »
Role of Human Resources in the Workplace
Human resources are the people who work in an organization. It is also the name of the department that exists to serve the needs of those people.William R. Tracey, in The Human Resources Glossary, defines human resources as, "The people that staff and operate an organization… as contrasted with the financial and material resources of an organization."Human resources are the people who work for an organization in jobs that produce the products or services of the business or organization.
In the past, these people, also known as employees, staff members, coworkers, colleagues, team members, or workers in organizations and workplaces, were called personnel. In some organizations, they are still called personnel, manpower, operators, or workmen -- names that are generally no longer used in more evolved and modern workplaces.Human resources evolved from these older terms as the functions of the field moved beyond paying employees and managing employee benefits. The evolution of the HR function gave credence to the fact that people are an organization's most important resources.
Evolution of the Term "Human Resources"
Human resources, as a name for employees, was first used in a book published in 1893 according to Wikipedia and was regularly used in the early 1900's.The modern use of the term, human resources, dates from the 1960's. Now, most organizations call employees and the department or office designated to assist the organization and its people, Human Resources.Over the years, calling employees "human resources" has been the subject of much debate.People who do not like the term applied to people believe that identifying people as an asset or resource of an organization -- in the same terminology you'd use to refer to land, building materials, or machines -- is improper, and can lead to poor treatment of employees.
Efforts are underway to modernize the term, human resources. Increasingly, you hear employees referred to as team members, associates, members of the organization, knowledge workers, or talent. The new names imply that all of the employees in the company are essentially peers, and that they're all equally valued as people.This is reflected in statements like, "As employees, no matter your job title or rank, we are all equal as team members.
The Second Meaning for Human Resources
In a second meaning, human resources is also the name of the department or functional area from which the HR employees provide HR services to the rest of the organization.People are an organization's primary asset. You must hire, onboard, pay, satisfy, motivate, engage, manage, develop, and retain your employees.Your HR department is your investment in accomplishing these goals with the people you employ. Whether their customer is management or individual employees, your HR staff is accountable for producing the results you need in each of these areas. This does not mean that the HR department is solely responsible for results in these areas.Foremost in accomplishing these goals with employees are your managers or front line supervisors to whom the employees report. They are the people who interact with employees every day to ensure that you have a motivated, contributing workforce. The HR office supports their front-line efforts.HR provides the framework, processes, programs, procedures, training, and the information they need to succeed.
The Changing Role of the HR Team
Over time, this has changed and enhanced the role of your HR team. Dr. Dave Ulrich of the University of Michigan identified three significant roles for the HR team: strategic partner, employee advocate, and change champion. He believes that everything HR does must add value to the business.The next phase for HR “which is emerging, is using HR practices to respond to and create value based on external business conditions." Says Ulrich, “This direction needs to be connected to the business, both the business context which shapes decision making and specific stakeholders around whom business strategies are created.”If your HR staff remain focused on designing innovative business practices in areas such as sourcing, hiring, compensation, and communication, they are not transforming their role to align with forward-thinking practices.If every action is not focused on creating value, your senior leaders must question HR leaders about their contribution to the overall organization.HR must focus on finding, developing and retaining talent; driving organizational culture, and organizational leadership.It’s time for transformation and asking tough questions about past practices that have outlived their ability to contribute. Annual performance appraisals, outdated hiring practices that include discrimination, a command and control management style, and disempowering micromanagement are examples.Today’s organizations cannot afford to have an HR department that fails to lead modern thinking practices and contribute to enhancing company profitability. See how these new roles of the HR employees have evolved.
The Changing Names of the Human Resources Function
In keeping with the new roles of the HR professional, organizations are rethinking what they want to call the office that deals with the organization’s human resources. They seek names that will more effectively present the office’s primary role and meet the expectations of the employees for what they need from their HR team.Office of People' is cropping up as a term to describe the HR office. So are People Operations, Office of Talent, Talent Management, Employee Success, People Resource Center, Department of People and Culture, Support Services, People and Development, Employee and Management Solution Center, Partner (Human) Resources, and People Management.And, of course, changing the name of the HR service organization results in changes to HR job titles. VP of People and Culture, Chief People Person, Employee Happiness Cultivator, People Operations Manager, VP of People, Chief Happiness Officer, Director of Employee Engagement, Chief People Officer, and Chief of Culture are a few that have cropped up in recent years.Reference:https://www.thebalancecareers.com/human-resources-4161680
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« on: July 21, 2019, 01:03:23 PM »
SMEs and our development goals
Small and medium enterprises (SMEs) are the most important segment of any economy in the world. SMEs are getting the highest priority from policymakers due to their already proven multidimensional contribution to the socioeconomic environment of a country. These enterprises are easy to start, require only minimum capital, employ a comparatively higher number of people, and produce goods that meet local demands as well as contribute to export earnings. Definition of SMEs is based mainly on indicators of replacement cost (invested amount), number of people employed, yearly revenue, etc. Size of the indicators varies based on the socioeconomic condition of the country or even the region. Table 1 shows how the government of Bangladesh has defined SMEs in its latest industrial policy, the National Industrial Policy of 2016.
Contribution and significance of SMEs
The 2013 National Economic Census conducted by the Bangladesh Bureau of Statistics shows that there are in total 7.81 million economic entities in Bangladesh. About 88 percent of these economic entities are cottage enterprises, while 11 percent are SMEs. But in reality, about 99 percent of Bangladeshi formal business enterprises are SMEs (ADB Institute, 2016). They constitute about 75 percent of non-agricultural employment and contribute about 25 percent to the national GDP. This 25 percent is contributed by only the manufacturing SMEs. However, this amount could in fact be much higher if the contribution of service sector SMEs could be calculated. Till now there has been little data available on service sector SMEs of Bangladesh, even though this sector contributes around 56.34 percent to the GDP, making it the largest contributor.The significance of SMEs can be clearly observed if we take a look at the contribution of SMEs in some select Asian countries. For example, about 97.3 percent of enterprises in China, 97.3 percent in Malaysia, 97.5 percent in Kazakhstan, and 97.7 percent in Vietnam are SMEs. Furthermore, about 99.4 percent of enterprises in Singapore, 99.5 percent in Sri Lanka, 99.6 percent in the Philippines, 99.7 percent in Thailand, 99.7 percent in Japan, and finally, 99.9 percent in the Republic of Korea are SMEs.SMEs also play a vital role in employment in these countries. For example, SMEs make up 87.7 percent of employment by enterprise in the Republic of Korea, 80.3 percent in Thailand, and 71.8 percent in Cambodia. Similarly, SMEs are contributing to GDP growth and increasing export earnings of these countries. They generate 60 percent of GDP in Indonesia and China, 47.6 percent in the Republic of Korea, 45 percent in Singapore, and 43.7 percent in Japan.In terms of export earnings, about 42.4 percent of export earnings in India comes from SMEs, 41.5 percent in China, 26.3 percent in Thailand, 20 percent in Sri Lanka, 18.8 percent in the Republic of Korea, and 15.7 percent in Indonesia.
Targets of Bangladesh in Vision 2021
Vision 2021 has eight broad objectives that are to be achieved by 2021, the golden jubilee of our independence. Objectives of this perspective plan include: (i) caretaker government, democracy, and effective parliament; (ii) political framework, decentralisation of power, and people's participation; (iii) good governance through establishing rule of law and avoiding political partisanship; (iv) transformation of political culture; (v) a society free from corruption; (vi) empowerment and equal rights for women; (vii) economic development and initiative; (viii) branding Bangladesh in the global arena, etc.As the election manifesto of the current Awami League government led by Prime Minister Sheikh Hasina during the national election of 2008, it aims to transform the socioeconomic environment of Bangladesh from a low income economy to the first stages of a middle income economy. Along with higher per capita income, Vision 2021 lays down a development scenario where citizens will have a higher standard of living, be better educated, enjoy better social justice, have a more equitable socioeconomic environment, and the sustainability of development will be ensured through better protection from climate change and natural disasters. The associated political environment will be based on democratic principles, with emphasis on human rights; freedom of expression; rule of law; equality of citizens irrespective of race, religion and creed; and equality of opportunities. The Bangladesh economy will be managed within the framework of a market economy, with appropriate government interventions to correct market distortions, ensure equality of opportunities, and ensure equity and social justice for all.Vision 2021 comprehensively lays down milestones for the country on its path to middle income status. In the sphere of education, the government targeted100 percent net student enrolment at primary level by 2010; free tuition up to degree level by 2013; full literacy by 2014; and a population skilled in information technology by 2021.In water and sanitation, the government aimed to supply pure drinking water for the entire population by 2011, and bring all households under hygienic sanitation by 2013.
By 2012, they hoped to attain self-sufficiency in food production; and by 2021, 85 percent of the population are targeted to have standard, nutritional food.The ten-year plan aimed for eight percent annual growth by 2013, and sustained 10 percent growth by 2017. Agriculture is to constitute 15 percent of the GDP, industry 40 percent, and services 45 percent by 2021. Employment in agriculture is to reduce to 30 percent in 2021 from the present 48 percent; while employment in industry is to rise to 25 percent from the present 16 percent; and employment in services is to rise to 45 percent from the present 36 percent. Unemployment is targeted to decrease to 30 percent in 2021 from the present 48 percent, and poverty rate is to decrease to 15 percent from the present 45 percent.7,000 megawatts of electricity was set to be produced by 2013, 8,000 megawatts by 2015, and 20,000 megawatts by 2021.All contagious diseases are targeted to be eliminated and longevity is to rise to 70 years by 2021. Infant mortality is to drop to 15 per thousand from 54 per thousand in 2010, maternal mortality to 1.5 percent from 3.8 percent, while the use of birth control will rise to 80 percent.So where do we stand on the path to realising Vision 2021? Though we have had remarkable achievements in power generation, we failed to achieve eight percent GDP growth by 2013, and it will be tough increasing the contribution of industry up to 40 percent by 2021. The only way forward is to promote SME growth, entrepreneurship development, and industrial cluster development, through a congenial investment-friendly policy. In this regard, establishing 100 special economic zones (SEZ) was a praiseworthy initiative and a step in the right direction. However, experience shows that making an SEZ functional takes up to ten years or even more. While we may be lagging behind in achieving our aspirations, the ball has begun to roll, and late is better than never.
Ecology of SME development and challenges
Chapter 5 of the National Industrial Policy of 2016 concentrates on the development of micro, small, and medium enterprises and cottage industries. Special initiatives by the government are in place to eliminate the still existing barriers to SME development. Major commitments include the provision of collateral-free, single-digit SME loans; refinancing of SMEs; cluster-based SME development; a 15 percent quota for women entrepreneurs taking SME loans; continuous training for capacity building of SME entrepreneurs; special drive to increase market access and market linkage of SME products; special incentives for procuring environment friendly and productive machineries; priorities for export oriented SMEs to get fiscal and non-fiscal incentives, etc. The National Council for Industrial Development (NCID) headed by the Prime Minister, Executive Committee of National Council for Industrial Development (ECNCID) headed by the Minister of Industries, Bangladesh Small and Cottage Industries Corporation (BSCIC) and SME Foundation are among the various entities working hard to create and maintain an SME friendly policy regime in Bangladesh. Despite so many achievements till now, there remain some mentionable challenges toward SME development in Bangladesh.We could sum up the findings in this article on the note that SMEs are important for self-employment, generating employment opportunities for others, increasing GDP growth, contributing to export earnings, supplying livelihoods to stakeholders, and poverty alleviation of the country. Cluster-based SME entrepreneurship development could be an effective tool to accomplish Vision 2021. But existing challenges like creating skilled manpower as per sectoral demands, providing product-specific manufacturing skills to the youth, improving productivity and product quality by adopting new technologies, increasing investment capacity by creating and maintaining an enabling environment through harmonisation of government policies, must be addressed if we are to achieve our development goals.Reference:https://www.thedailystar.net/education-employment/smes-and-our-development-goals-1366591
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« on: July 21, 2019, 09:20:22 AM »
How business incubators help boost growth and innovationIncubators can speed up the growth of start-ups and guide small companies to success. In this piece, we discuss their rise and the benefits they can bring to your business.
What is a business incubator?
It is thought that there are more than 300 business incubators in the UK supporting around 12,000 businesses. Unlike research and technology parks, which generally support large-scale corporate or government projects, business incubators specialise in speeding up the growth of start-up companies and guiding early-stage businesses on the road to commercial success, both in the UK and internationally.Incubation can heavily benefit new ventures, particularly by adding credibility through association, access to shared and more affordable resources and by providing professional expertise and advice. There are some incubators that will provide assistance to any business looking for growth and support, and there are those that specialise in providing sector-specific support and expertise, such as technology. Incubators are set up purely to help both new and up-and-running businesses achieve their goals more quickly, whether this is in the provision of office space, providing access to funding or providing guidance and advice on any business topic when needed.
Where it all began
Business incubation actually began in the US in 1959, when Joseph Mancuso opened the Batavia Industrial Center in New York and since then, incubation has spread widely throughout the US and more recently across to Europe. The National Business Incubation Association now has on its records more than 2,100 members in 60 nations across the globe.
What can incubators offer new businesses?
Business incubators can be called innovation centres, pepinieres d’enterprises, technopoles or science parks. The exact offerings can differ but essentially all incubators will offer a mix of office space – a massive asset in itself for a new business, especially as the cost of office space can hugely impact the outputs of any business – plus the business advantage of access to experienced advice, mentorship, funding and the PR value and exposure of being part of the incubation programme brings.Traditional business parks are usually built as a blank canvas for occupants to make their own, but that often makes them feel quite soulless. More recently, a new kind of incubator has emerged, which takes its cue from the success of co-working spaces like WeWork, aiming to provide much more than blank office space.Modern incubators such as CodeBase in Edinburgh or Platf9rm in Brighton prioritise the workspace aesthetic, employee wellbeing and aim to foster a sense of community. They usually have a mix of hot desking zones, dedicated coworking spaces and offices for start-ups. They may also have social areas or even a café or restaurant that is open to the public, since the goal is to be a part of the local community, not hidden from it.
Incubation in the UK
Business incubators are going from strength to strength in the UK, whether run in partnership with education or with the private sector, they can still have a huge impact. All the incubators play a vital role in injecting commercial business growth and dynamism into the British economy, bringing new products and services to the market. Universities, and the innovation that they all nurture, bring a vital element to this economic mix. Many young entrepreneurs are coming through university looking to excel in the business world and business incubators provide them with the platform that they need to showcase their ideas.There are many universities across the UK that provide such environments for individuals and businesses. One of the highest ranked incubators by the University Business Incubator (UBI) Index in the UK and in fact the second highest ranked in the world is the SETsquared partnership, which looks to accelerate and focus on high tech start-ups and many young budding entrepreneurs with an idea can approach an incubator, such as SETSquared, to achieve such success.
Access to ‘live’ business experience
Incubators can offer a ready-made support system for new businesses, often providing access to mentorship and investment. As well as this formal support, the informal networks created in these environments can be just as important, since residents are surrounded by potential business partners, creative resources such as graphic designers and sometimes even future customers!Incubators also foster the idea that everyone can learn from each other, hosting training sessions and networking events for founders to meetup and share their advice, challenges and stories with one another. This can be really useful for start-ups trying to scale up or secure funding, since they share the same space as people who have been through the process themselves already, know the challenges involved and how to succeed. Email groups and tools like Slack are a lot more popular now too, to help business leaders and their employees communicate with their peers.More recently, business incubators have employed ‘entrepreneurs in residence’ – individuals still working in business and industry, whose real life experience and successes can help start-ups navigate the road to success. As well as employed ‘Entrepreneurs in Residence’, many incubators also provide start-up companies with access to mentors who advise on relevant topics such as legal or finance, on a volunteer basis.
Incubators offer a social space
There is also a social side to most incubators, since creating a sense of community has become more important to many business founders. Businesses will often hold parties for the other residents when they reach a milestone or close a round of funding. In some incubators you might expect table tennis tournaments, coffee mornings, and drinks after work.
Space to grow into
Choosing office space is a huge commitment for start-ups and small businesses. If start-ups grow quicker than expected, office spaces that are too small can quite literally cramp their growth. Similarly, nothing is worse for morale or finances than a large empty space waiting to be filled. A benefit to the modern incubator/co-working space hybrid is their flexibility. They offer a fantastic alternative to long term fixed contracts, since businesses can scale up and down within this space, rather than moving offices each time.
Knowing when your business is right for
incubation When an entrepreneur sets up a business and is looking for assistance, most will be unaware of how a business incubator can help, however, the benefits are clear. Shared learning, mentorship, faster access to funding and the various funding grants that are on offer and office space are all vital for any new start-up and, when you are kick-starting a new business, advantages like these can put you ahead of the competition to enjoy accelerated growth in the future.Reference:https://smallbusiness.co.uk/how-business-incubators-help-boost-growth-and-innovation-2471907/
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« on: July 20, 2019, 12:06:45 PM »
3 Honest Ways to Raise Startup MoneyDevelop financial projections that are rooted in verifiable assumptions
Venture capital firms and angel investors typically want to see financial projections that shoot up like a hockey stick. Entrepreneurs often feel compelled to exaggerate projections to look like their businesses can reach a billion dollars of market value in a few years. There's no point in just fabricating a set of projections that aren't based on reality. One way to build a set of realistic projections is to start with business drivers that can be discussed and debated with investors. For example, if you're selling widgets that depend on the cost of oil, develop a set of financial projections that link market value to the number of widgets you plan to sell and the changing price of oil. This will show billion-dollar market value and allow investors to understand what assumptions you're basing your growth on.
Write paychecks that don't bounce, but increase as the business grows
One of the most difficult tasks for entrepreneurs is to convince talented employees to join the team and stay on the team before their company is profitable or stable. As a startup business owner, you're faced with a choice: Pay your employee a market salary (say $150,000 per year) and take a bet that you can grow the business to justify the salary, or share risk with your employee by paying a below-market salary (say, $75,000 per year) plus equity incentives (worth $75,000 or more). Most experienced entrepreneurs will tell you that it makes more sense to share risk with your employees until you have funding or until your product line gets market traction. While this makes sense, it often puts the entrepreneur in the precarious position of having to recruit employees by exaggerating how likely the prospects of venture funding are, how developed the company's strategy is, or how popular the company's products are.Employees are usually the first to know when funding prospects dry up, strategies fail and products don't sell, so it's better to be upfront about the risks of joining a young company. But enable new recruits to share in the rewards of business success immediately rather than waiting for their equity to appreciate. For example, one clever way to share risk with your new recruits is to outline a path to increase their base salaries as the business grows. For example, offer to increase a base salary from $75,000 to $100,000 when the company hits certain milestones, then again to $150,000 when profitability is attained. Put this in writing in the offer letter. This compensation plan will cost less than promising to pay out bonuses, which get spent then forgotten, or subsequent equity grants, which get expensive for the company if they are granted many times.
Get your clients to compete to be first
Successful entrepreneurs love to tell stories about how they got their first client. While working out of a closet or a garage, they print up business cards with a prestigious address and fancy logo and close the deal. That's what it takes to sell. Exaggerating the stability or size of your enterprise to secure your first client is the stuff of legend. Even if your product isn't ready, you can use a similar approach to raise money for your business by getting investors and business partners--who can provide financial support--to compete to be first. There's a certain prestige in being part of the first group of investors, partners or customers to help launch a business. Create the feeling of exclusivity. Require an invitation to use your beta product. Generate buzz about your product plans and your team among blogs that investors read. There's less need to exaggerate if you can set expectations that your product is still being tested among early adopters.Reference:https://www.entrepreneur.com/article/197224
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« on: July 20, 2019, 09:49:09 AM »
10 different pricing strategies for your small business to considerAs we’ve just identified, project management and strategic, actionable decisions go into setting the price of a product. Here are ten different pricing strategies that you should consider as a small business owner.
1.Pricing for market penetration
As a small business owner, you’re likely looking for ways to enter the market so that your product becomes more well-known. Penetration strategies aim to attract buyers by offering lower prices on goods and services than competitors.For instance, imagine a competitor sells a product for $100. You decide to sell the product for $97, even if it means you’re going to take a loss on the sale. Penetration pricing strategies draw attention away from other businesses and can help increase brand awareness and loyalty, which can then lead to long-term contracts.Penetration pricing can also be risky because it can result in an initial loss of income for the business. Over time, however, the increase in awareness can drive profits and help small businesses stand out from the crowd. In the long run, after penetrating a market, business owners can increase prices to better reflect the state of the product’s position within the market.
2.Economy pricing
This pricing strategy is a “no-frills” approach that involves minimizing marketing and production expenses as much as possible. Used by a wide range of businesses, including generic food suppliers and discount retailers, economy pricing aims to attract the most price-conscious consumers. Because of the lower cost of expenses, companies can set a lower sales price and still turn a slight profit.While economy pricing is incredibly useful for large companies like Walmart and Target, the technique can be dangerous for small businesses. Because small businesses lack the sales volume of larger companies, they may find it challenging to cut production costs. Additionally, as a young company, they may not have enough brand awareness to forgo custom branding.
3.Pricing at a premium
With premium pricing, businesses set costs higher because they have a unique product or brand that no one can compete with. You should consider using this strategy if you have a considerable competitive advantage and know that you can charge a higher price without being undercut by a product of similar quality.Because customers need to perceive products as being worth the higher price tag, a business has to work hard to create a perception of value. Along with creating a high-quality product, owners should ensure that the product’s packaging, the store’s decor, and the marketing strategy associated with the product all combine to support the premium price.An example of premium pricing is seen in the luxury car industry. Companies like Tesla can get away with higher prices because they’re offering products, like autonomous cars, that are more unique than anything else on the market.
4.Price skimming
Designed to help businesses maximize sales on new products and services, price skimming involves setting rates high during the initial phase of a product. The company then lowers prices gradually as competitor goods appear on the market. An example of this is seen with the introduction of new technology, like an 8K TV, when currently only 4K TVs and HDTVs exist on the market.One of the benefits of price skimming is that it allows businesses to maximize profits on early adopters before dropping prices to attract more price-sensitive consumers. Not only does price skimming help a small business recoup its development costs, it also creates an illusion of quality and exclusivity when you first introduce your product to the marketplace.
5.Psychological pricing
Psychological pricing refers to techniques that marketers use to encourage customers to respond based on emotional impulses, rather than logical ones.For example, setting the price of a watch at $199 is proven to attract more consumers than setting it at $200, even though the actual difference here is quite small. One explanation for this trend is that consumers tend to put more attention on the first number on a price tag than the last. The goal of psychology pricing is to increase demand by creating an illusion of enhanced value for the consumer.
6.Bundle pricing
With bundle pricing, small businesses sell multiple products for a lower rate than consumers would face if they purchased each item individually. A useful example of this occurs at your local fast food restaurant where it’s cheaper to buy a meal than it is to buy each item individually.Not only is bundling goods an effective way to reduce inventory, it can also increase the value perception in the eyes of your customers. Customers feel as though they’re receiving more bang for their buck. Many small businesses choose to implement this strategy at the end of a product’s life cycle, especially if the product is slow selling.Small business owners should keep in mind that the profits they earn on the higher-value items must make up for the losses they take on the lower-value product. They should also consider how much they’ll save in overhead and storage space by pushing out older products.
7.Geographical pricing
If you expand your business across state or international lines, you’ll need to consider geographical pricing. Geographical pricing involves setting a price point based on the location where it’s sold. Factors for the changes in prices include things like taxes, tariffs, shipping costs, and location-specific rent.Another factor in geographical pricing could be basic supply and demand. For instance, imagine you sell sports performance clothing. You may choose to set a higher price point for winter clothes in your cold-climate retail stores than you do in your warm-climate stores. You know people are more likely to buy the clothes in the winter environments, so you set a higher price to take advantage of demand.
8.Promotional pricing
Promotional pricing involves offering discounts on a particular product. For instance, you can provide your customers with vouchers or coupons that entitle them to a certain percentage off the good or service. You could also entertain a “Buy One Get One” campaign, tacking on an additional product as an add-on.Promotional pricing campaigns can be short-term efforts. For instance, you may run a promotional pricing strategy over an extended holiday, like Memorial Day Weekend. By offering these deals as short-term offers, business owners can generate buzz and excitement about a product. Promotional pricing also incentivizes customers to act now before it’s too late. This pricing strategy plays to a consumer’s fear of missing out.
9.Value pricing
If you notice that sales are declining because of external factors, you may want to consider a value pricing strategy. Value pricing occurs when external factors, like a sharp increase in competition or a recession, force the small business to provide value to its customers to maintain sales.This pricing strategy works because customers feel as though they are receiving an excellent “value” for the good or service. The approach recognizes that customers don’t care how much a product costs a company to make, so long as the consumer feels they’re getting an excellent value by purchasing it.This pricing strategy could cut into the bottom line, but businesses may find it beneficial to receive “some” profit rather than no profit. An example of value pricing is seen in the fashion industry. A company may produce a product line of high-end dresses that they sell for $1,000. They then make umbrellas that they sell for $100.The umbrellas may cost more than the dresses to make. However, the dresses are set at a higher price point because customers feel as though they are receiving much better value for the product. Would you pay $1,000 for an umbrella? Probably not. Thus, external factors like customer perceptions force the value pricing strategy.
10.Captive pricing
If you have a product that customers will continually renew or update, you’ll want to consider a captive pricing strategy. A perfect example of a captive pricing strategy is seen with a company like Dollar Shave Club. With Dollar Shave Club, customers make a one-time purchase for a razor. Then, every month, they purchase new razor blades to replace the existing one on the head of the razor.Because the customer purchased a DSC razor handle, he or she has no choice but to buy blades from the company as well. Thus, the company holds customers “captive” until they decide to break away and buy a razor handle from another company. Businesses can increase prices so long as the cost of the secondary product does not exceed the cost that customers would pay to leave for a competitor.Reference:https://quickbooks.intuit.com/r/pricing-strategy/6-different-pricing-strategies-which-is-right-for-your-business/
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« on: July 20, 2019, 09:28:48 AM »
How to Decide Between Pitching to a Venture Capitalist vs. Angel InvestorGetting funding for your business is no walk in the park, especially if you’re just starting up. But in order to keep your business dream alive, you need capital.Depending on what stage your business is in, you might seek funding from a venture capitalist (VC) or angel investor. Learn the difference between venture capitalist vs. angel investor to decide which to pursue.
Venture capitalist vs. angel investor
Both venture capitalists and angel investors are people who invest money into businesses. Angel investors and VCs both take calculated risks when investing in the hopes of earning a healthy return on investment (ROI).So, what is the difference between angel investors and venture capitalists? Being able to answer this question can save you time and help you seek funding from the best fit.Learn about key differences between angel investors and venture capitalists below.
How they work
One difference between venture capitalists and angel investors is what money they use to invest.A venture capitalist is a person or firm that invests in small companies, generally using money pooled from investment companies, large corporations, and pension funds. Typically, VCs do not use their own money to invest in companies.An angel investor is an accredited investor who uses their own money to invest in small businesses. They are required to have a minimum net worth of $1 million and an annual income of at least $200,000 to be considered an accredited investor. Many angel investors are small business owners’ family and friends.Small business angel investors focus more on helping build someone’s business than profiting right away. As a result, their terms might be more reasonable than a venture capitalist’s terms.
When they invest
Angel investors and venture capitalists invest in businesses at different stages. The investor you appeal to depends on whether you are established or if you are just starting up.Venture capitalists tend to invest in businesses that are already established to reduce their risk of losing investments.Angel investors are more likely to invest in businesses that are just starting out. They choose businesses that they are interested in and can see becoming profitable, even if the company has not proven itself yet. Because of this, angel investors take more risks than venture capitalists.If you are just starting out, an angel investor might provide you with enough money to get off the ground. When you’re established and looking to expand, you might try pitching to a venture capitalist.
Investment amounts
Another difference between angel investor and venture capitalist is the amount of business capital both investors are willing to offer.VCs invest more money into businesses than angel investors. According to the Small Business Administration, the average venture capital deal is $11.7 million.The average angel investment is $330,000 according to the SBA. While venture capital tends to be invested in the millions, angel investments are in the thousands.
Return expectation
The return on investment venture capitalists and angel investors want differs. Generally, venture capitalists expect a higher percentage.Venture capitalists might expect a return on investment anywhere between 25% and 35%.Angel investors may want a return between 20% and 25%.
An investor’s role in the business
After the investor invests in your small business, what do they want?Both venture capitalists and angel investors want business equity and/or some sort of control in how your business runs. Because they invested money into it, they want to make sure they get a high return on investment out of it.Venture capitalists might require that you establish a Board of Directors and give them a seat on it after investing. Generally, they are not interested in acting as mentors, although this varies from firm to firm.
Many angel investors act as mentors. They might offer suggestions about running your business, help you form connections with lawyers, accountants, and banks, and help with decision-making.What are you looking for in an investor? Are you looking for someone who acts as a partner and mentor, like angel investors? Or, would you prefer if the investor didn’t act as a mentor, like VCs?
How to pitch to investors
Whether you want venture capitalists or angel investors to invest in your small business, you need to be prepared. You will need to perfect your investment pitch.Before you pitch to venture capitalists or angel investors, research them to find ones that align most with your business.During your pitch, show investors your business plan, financial statements, financial projections, marketing plans, and market analysis.You will also need to detail how much capital you are seeking, how much money is already invested in your business, and how you plan on using the money.Reference:https://www.patriotsoftware.com/accounting/training/blog/venture-capitalist-vs-angel-investor/
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« on: July 18, 2019, 12:55:53 PM »
What are the best practices for great partnerships?Obviously, this is not a quick, easy answer but we can outline the major conflicts that occur between startups and corporates during the incubation process. They are:
1.Speed of decision-making process
2.Evolving strategy on both sides
3.Misaligned expectations
4.Set goals
To manage these conflicts, it is a best practice for the corporation to set explicit and transparent long-term goals. The corporate should have an overriding consensus within their own company structure on the desired level of collaboration and incubation process and the objectives that must be achieved during incubation. Preferably set before the incubation process begins, this gives a clear set of corporate goals to both the startup and the incubation program. With this set of goals in mind, the three conflicts listed above can be avoided.
Grow the innovation ecosystem
A central objective of many incubation programs is the creation and maintenance of a local innovation ecosystem. The value of the ecosystem is ultimately regarded as an indicator of the incubation program’s success. By merging talent, investment, support, and guidance from corporates with young startups, the incubation program can further nurture the ecosystem to flourish and grow. In turn, the successful ecosystem attracts more corporates and more startups with successful paths to market.
Nurture the partnership
Business incubators and accelerators are facilitators of the fruitful collaboration between startups and corporations. The incubation programs that UBI Global works with are responsible for thousands of startups in over 70 countries around the world. Thanks to today’s technology, partnerships between startups, incubation programs and corporates can happen across the globe just as well as across the street. Incubation programs make sure a mutually beneficial relationship is established between startup and corporate.
Benchmark the Incubator
Through their own benchmarking system, the incubation program monitors key points in the progress of the relationship. What is important for both startups and corporates to remember is to look for incubation programs that offer value and engagement. An incubation program that only offers workspace without mentorship, guidance and resources is not a good value and will not contribute much to the success of the partnership.Corporates searching for an innovative startup partner need to work with UBI Global. We have done the work of gathering data, compiling benchmark studies and detailing the best practices of the top incubation programs in the world. By matching incubation programs with corporations hungry for innovation, UBI Global has been the catalyst of positive affiliations in almost every country.If your corporation is ready to lend their visibility and expertise in exchange for new, disruptive technology, UBI Global can guide you into the best incubation program and startup for your partnership in the innovation ecosystem.Reference:https://ubi-global.com/best-practices-successful-incubator-corporate-partnerships/08/
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« on: July 18, 2019, 12:02:54 PM »
How Venture Capital Works
Venture capital firms are without a doubt the muscle behind innovation as they support the company they may invest in, from the early stages, all the way to IPO — especially those with larger funds that have billions of dollars under management.
Defining the Roles at a VC
As described in my book, The Art of Startup Fundraising, VC firms have different types of individuals working at the firm.
The most junior people want to be analysts. These people are either MBA students in an internship or people that just graduated from school. The main role of analysts is to go to conferences and to scout deals that might be within the investment strategy of the fund that the VC firm is investing out of. Analysts are not able to make decisions, but they could be a good way to get your foot in the door and to have them introduce you to someone more senior within the firm. However, analysts are for the most part conducting research of the market and studying you and your competitors, so be careful with educating them too much.The most immediate position after the analyst is the associate. An associate could be either junior or senior. Associates tend to be people that come with a financial background and with powerful skills in building relationships. Associates do not make decisions in a firm but they can definitely warm up an introduction with individuals involved in the decision-making.
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Over associates, you will be able to find principals. They are senior people that can make decisions when it comes down to investments but they do not have full power in the execution of the overall strategy of the firm. A principal can get you inside the door and be your lead to help bring you through the entire process of receiving funding. Principals are those individuals that are close to making partner. They have power within the firm but cannot be considered the most senior within the firm.
The most senior people within a VC firm are above principals, and are called partners. Partners could be general partners or managing partners. The difference in the title varies depending on whether the individual just has the voice in investment decisions or may also have a say in operational decisions. In addition to investments, partners are also accountable for raising capital for the funds that the firm will be investing with.Lastly, venture partners are not involved in the day-to-day operations or investment decisions of the firm. Venture partners have a strategic role with the firm, mainly involving bringing new deal flow that they refer to other partners of the firm. Venture partners tend to be compensated via carry interest, which is a percentage of the returns that funds make once they cash out of investment opportunities.Another figure in a VC firm is the entrepreneur in residence (EIR). EIRs are mainly individuals that have a good relationship with the VC and perhaps have given the VC an exit, helping them earn cash. EIRs generally work for a year or so with the firm helping them to analyze deals that come in the door. Ultimately the goal of an EIR is to launch another start-up for positive investment.Investors of VC firms are called Limited Partners (LPs). LPs are the institutional or individual investors that have invested capital in the funds of the VC firm that they are investing off of. LPs include endowments, corporate pension funds, sovereign wealth funds, wealthy families, and funds of funds.
The Process of Getting Funded by a VC
First and foremost, identify the VC that might be investing within your vertical. There are plenty of tools you can use to identify who might be a fit. (You can use Crunchbase, Mattermark, CB Insights, or Venture Deal.)Once you have your list of targets, you will need to see who you have in common and close to you who would be in a position to make an introduction. The best introductions come from entrepreneurs that have given good returns to the VC. VCs use these introductions as social proof and the stamp of approval on the relationship. The better the introduction is, the more chances you have of getting funded.As a next step to receiving the introduction, and in the event there is a genuine show of interest from the VC, you will have a call. Ideally you would want to go straight to the partner to save time, or the goal would be to get an introduction to the partner ASAP. If you are already in communication with the partner after the first call, he or she will ask you to send a presentation (also known as pitch deck) if the call goes well and there is interest.In this regard, I recently covered the pitch deck template that was created by Silicon Valley legend, Peter Thiel (see it here). I also provide a commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here).After the partner has reviewed the presentation, she will get back to you (or perhaps her assistant) in order to coordinate a time for you to go to the office and to meet face to face. During this meeting, you’ll want to connect on a personal level and to see if you have things in common. The partner will ask questions. If you are able to address every concern well and the partner is satisfied then you will be invited to present to the other partners.
The partners meeting is the last step to getting to the term sheet. All the decision-making partners will be in the same room with you. Ideally the partner you have been in communication with has spoken highly of you, unless there have been issues (which you’ve hopefully covered by this time).You’ll receive a term sheet if you were able to satisfy the concerns put forward at the partners meeting. Remember that term sheet is just a promise to give you financing. It does not mean that you will get the capital. It is a non-binding agreement. If you want to dig deeper into term sheets I recommend reviewing the Term Sheet Template piece that I recently published on Forbes.Following the term sheet, the due diligence process begins. It will typically take a VC one to three months to complete the due diligence. Unless there are no major red flags you should be good to go, and receive the funds in the bank once all the offering documents have been signed and executed.
How VCs Monetize
VCs make money on management fees and on carried interest. Management fees are generally a percentage of the amount of capital that they have under management. Management fees for the VC are typically around 2%.The other side of making money is the carried interest. To understand this concept, carried interest is basically a percentage of the profits. This is normally anywhere between 20% and 25%. It is normally in the largest range if the VC is a top tier firm such as Accel, Sequoia, or Kleiner Perkins.In order to cash out and receive the carried interest, the VC needs to have the portfolio of each one of the funds making an exit, which means that the company is acquired or will through an IPO where investors are able to sell their position.Normally exits take between five to seven years if the company has not run out of money or the founders have run out of energy. Typically VCs want to sell their position within eight to 10 years, especially if they are early stage investors.
Start-ups are a very risky type of asset class and nine out of 10 will end up failing. For that reason, VCs will go for those companies with the potential of giving them a 10x type of return so that it can help them with the losses of other companies inside their portfolios. If you are not able to project these kinds of returns, a VC might not be the route to follow for financing.
VC Involvement with Your Company
VCs would like to have a clear involvement with your company in order to stay close to their investment and to have a say in major decisions that could impact their returns in the long run.With this in mind, VCs will normally buy in equity between 15% to 45% of your company. Normally in earlier stage rounds, it tends to be on the higher end but VCs need to be mindful of the stake they leave with the entrepreneur so that they are still motivated enough to stick around and to continue focusing on the execution.VCs will request board involvement in return for the investment that they are making in your company. There are two types of board levels. One will be the board of director seat in which they participate in major decisions of the company. This is especially important when it comes to future rounds of financing or merger and acquisition transactions (also called M&A).The other level of board involvement is what is known as board observer, which means they will have an open invitation to attend meetings without a vote. In my experience they still have a lot of influence. Below is an image comparing directors vs. observers.Most VCs say the main reason why an entrepreneur should consider working with a VC is because of the value they can bring to the overall strategy and execution of the business. However, that is far from true.You will need to do the due diligence in order to really understand if a VC is going to add value in addition to capital. This value can be introductions for potential partnerships, their network of other successful founders, or the infrastructure the firm brings.The infrastructure could be the most attractive part. VCs like Andreessen Horowitz or First Round Capital have a dedicated team of marketers, recruiters and other resources to bring into a company they invest in. Ultimately this helps in fueling the growth of the business.
Cutting Through the VC Noise
As a founder you want to ask the right questions, which will help you understand if the VC is truly interested in investing, or what style of partners you will be onboarding to your company after the financing round is closed.If the VC firm has not invested in more than 6 months in new companies, that indicates that the VC is having trouble closing their next fund or that they are in fundraising mode. If this is the case, move on to the next VC, otherwise the process will be put on hold. Closing a fund typically can take between 12 to 24 months. You always want to choose to work quickly. If you need a list of the most active VCs I recommend reading this other piece on Forbes that I recently published.Ask how they typically work with portfolio companies. Ask the VC to make an introduction to a few founders from companies that have gone out of business. These questions can provide a complete picture and see how they behave when they are on the other side of the mountain. During the dating phase everyone is happy without any worries so don‘t be mistaken as people change when there is money on the line.In addition, ask about allocations to the options pool for employees of companies your size. (This should be written out in the deal’s terms.) If you see they want to allocate over 20% on a seed round, or over 10% on a Series A, round of financing that could mean they may eventually want to replace the founding team.The deal flow funnel of a VC is typically what you will find represented on the image below. On average, out of 1,000 companies a partner ends up investing in 3 to 4 of them on a yearly basis. This means that only 0.2% companies receive VC financing.
Differences Between Venture Capital and Private Equity
There is confusion between these two types of investors. Venture capital firms tend to work throughout the life cycles of a company, all the way to the liquidity event, when the start-up either gets acquired or goes through an IPO.VCs are also very much involved in the operational structure. However, the main difference is that VCs invest in people with a greater degree of risk than a traditional private equity (PE) firm. PEs will go more for the numbers. They invest in businesses that are already formed, where the outcome is more predictable.PEs will often invest in growth stages and later rounds, so your start-up, if you are in the early stage, will most likely not be a fit. Wait until you are at a Series C or Series D round of financing before seeking funding from private equity.Reference:https://www.forbes.com/sites/alejandrocremades/2018/08/02/how-venture-capital-works/#67fb96701b14
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« on: July 15, 2019, 09:24:48 AM »
10 Facebook Posting Tips to Improve Your Brand AwarenessEvery business knows that Facebook is integral to a successful marketing strategy. But creating a winning strategy on the platform takes more than tossing random piece of content onto your Page and hitting publish.The social network provides you with plenty of bells and whistles to help enhance your outreach strategy, but none of that matters if you don’t have a solid foundation to build upon. The content you publish sets the tone for your strategy, and without quality posts, you won’t be able to achieve your business objectives.While there’s no such thing as the perfect Facebook post, there are ways you can optimize your content for success. Here, we’re going to look at 10 Facebook posting tips to help you improve brand awareness:
1.Use Tags for Additional Reach
An excellent way to put your content in front of users is to tag others in your Facebook Post. This is perfect for cross promotion with business partners and collaborators. It’s also a chance for you to acknowledge individual fans or customers. User-generated content is huge. If you’re integrating it into your Facebook strategy, tagging the original poster in your re-post is a digital kudos.Now hold on just a minute. Doesn’t this encourage users to click through and visit other Profiles and Pages? Won’t it take valuable views away from your Page? It might seem that way on the surface, but tagging is a very smart strategy for Facebook marketers and here’s why: reach and engagement.Tagging other Pages puts your content in front of users that might not follow you, thus increasing your reach. If you tag another Page, there’s a chance that post will appear in the News Feed of someone who Likes the Page that’s being tagged. It also gives you an organic boost when it comes to Facebook’s algorithm, which is heavily influenced by social media engagement. A click on your post counts as engagement. So by users clicking the tagged Page in your post, they’re actually helping to deliver your content to more News Feeds.
2.Leverage Trends
Trending Topics on Facebook show you the topics that have recently become popular on the social network. Based on engagement and location, Trending Topics are a powerful way to connect people around a major event and help them to engage in meaningful conversations.Facebook posting tips like this will give you a glimpse of what’s being talked about and shared the most on the platform. One way you can get involved is by writing posts that are timely and include references—hashtags or keywords—to relevant trending topics.Influenced by real-time happenings around the globe, it can be difficult to know what’ll be trending from day to day. That and these topics will change depending on your. That said, there are some trends that are easy to predict. For example, the presidential debates, popular sporting events (such as the World Series) and awards shows are among some of the live events you can expect to see trending. You can even browse different Facebook Events to see what’s coming up.
3.Include Branded Hashtags, But Not Too Many
Hashtags play an important part in driving traffic to your Facebook Page. When used strategically within a post, they can also help you measure the reach and overall success of your marketing campaign. But while they certainly help with discover-ability, don’t go overboard.Research found that too many hashtags lower engagement, which can ultimately hurt your reach. In its study, posts with 1-2 hashtags averaged 593 interactions while posts with more than 10 hashtags averaged only 188 interactions.
4.Balance Stories & Promotions
Facebook is, without a doubt, a powerful marketing and sales tool, but not every post you publish needs to revolve around selling. Users want to see less promotional content and more stories from friends and Pages. A good content strategy will find a balance between promotional and non-promotional content.Your Facebook Page should be about your business and products, but when crafting your content strategy, remember the 80/20 rule—80% of your updates should be social in nature. Try to stay away from publishing posts that only push people to buy a product, enter a promotion or sweepstakes or that reuse the same content from ads.Instead, balance your promotional content with posts that are educational, entertaining or whimsical in nature. If you’re constantly selling, it doesn’t seem like you’re interested in building relationships or engaging in conversations with your customers.
5.Educate, Entertain & Repeat
Publishing posts for the sake of updating your Timeline isn’t a good approach when it comes to maintaining a successful content strategy. Instead, one of the better Facebook posting tips is to focus on creating content that fulfills your business objectives—remember those?The Facebook posts you publish should add value in some way. Aim for updates that are educational, entertaining or conversational. Once you’ve found a balance that works for you, repeat. Then you can monitor your posts and their performance to see if one particular type of content is resonating with viewers more than others.
6.Say More With Less
Consider this statistic for a second: The average adult’s attention span is only eight seconds, which is one second faster than a goldfish. Customers are inundated with messages and content on a daily basis. Ensuring your posts capture and hold the interest of viewers is crucial.On average, people read about 20-28% of the words in your post. When drafting your post, pay special attention to the first three to four words. Aside from any attached media you may have included, this is typically the first thing someone will notice about your update.Your Facebook Page isn’t your company blog. Although some people are warming up to long-form content on the social network, not everyone is. In fact, Facebook posts between 0-50 characters receive the most engagement. Another study found that posts with 40 characters or less perform the best in terms of engagement.Remember that you’re competing with updates from customers’ friends and families. Users will need a compelling reason to scroll past a friend’s update in favor of engaging with yours. Focus your energy on creating copy that’ll hook viewers and leave out unnecessary details.
7.Have More to Say? Use a Link
Not every message can be whittled down to a single sentence, and that’s okay. But you can’t assume that users will read through multiple paragraphs of text before reaching the call-to-action. Spoiler alert: they won’t. If you have a lot to say, then include a link in your Facebook post so people have the option of clicking through.Research by Quaintly found that links are the second most common type of content posted by Facebook Pages, accounting for 30% of posts worldwide. That percentage has likely shifted over time as photos, videos and links continue to compete for users’ attention. That said, Facebook is a consistent driver of referral traffic, responsible for about 40% of traffic sent to websites.
People are including links in posts in two ways:
In status updates where the link is the main focus of the post. In this case, the link appears with a large picture, a headline and some text that provides context on the link.
In the text captions above photos. When shared this way, the link appears as a URL without any context.Facebook found that people prefer to click links that are displayed in the link format rather than those included in link captions. The social network even prioritizes links displayed in the link-format within News Feed.The link format offers viewers additional information associated with the link, such as the beginning of the article, which can influence whether someone wants to click through. As such, you must ensure that even your blog content is optimized for Facebook. Use strong headlines and leads.
8.Use Clear Calls-to-Action
You need to make it clear to users that you want them to do something and provide them with the necessary tools to do so. If your goal is to drive awareness and reach, then getting people to share your post should be a top priority. Creating compelling, high-quality content is the first step to meeting that objective. The second step is to tell viewers what you want.
In the case of shares, sometimes asking for what you want is the best approach. Posts that include the word “share” receive almost twice as many social actions (comments, likes and shares) compared to those that don’t.Just make sure that your call-to-action aligns with the copy included in your post. For example, if your post is all about the benefits that come from subscribing to your newsletter, your call-to-action shouldn’t encourage people to shop now or download an app. Every asset included in your post should support the main objective of that post.Here’s a great yet subtle example from Fitbit. This post is engaging because it appeals directly to viewers who feel like they need a little extra motivation or a challenge. It asks a direct question, provides a solution and links back to the campaign it’s promoting.
9.Use Original Photos
Posting photos is a great way to get attention from fans and drive engagement. Images account for 87% of the content shared on Facebook. This shouldn’t be surprising because images are much easier to digest than text. But not all images are created equal. When it comes to dressing up your business’ Facebook Page, focus on using original pictures rather than stock images.Facebook posts that contain original photos feel more personal and organic. One of the reasons you’re using social media in the first place is to humanize your brand and help your customers learn about the people behind the logo. If you’re relying on generic images, you’re actually working against that objective.Almost every, if not every employee has a smartphone. Leverage this by asking them to take some real pictures within their departments or while attending company-related events. Add these photos to your Facebook Page and use them in posts throughout your content cycle.And when it comes to images of your products, the occasional standalone product shot is acceptable, but spice things up a bit by showing people actually engaging with your product. Reach out to customers for some user-generated content and create a more compelling story for viewers.
10.Target Your Posts
Depending on what your goals are, you might want to publish something that will interest people of specific ages or genders, or in specific locations. The easiest way to control who sees your content is through targeting. Facebook’s Audience Optimization tool, which replaced the older Interest Targeting feature, provides you with an organic way to reach and engage select segments of your target audience.This is really important, especially for local businesses who want to appeal to people in specific locations. Getting started is very easy. If you have more than 5,000 Likes, Audience Optimization features were automatically turned on for your Page. Reference:https://sproutsocial.com/insights/facebook-posting-tips/
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« on: July 14, 2019, 04:39:55 PM »
Types of Business Financing[/color]
Business owners have many choices when it comes to funding a business. With so many things to consider as well as many rules and regulations to follow, financing a business can be overwhelming. Breaking down the financing options into three basic categories helps identify the type of financing a business seeks. From there, the business leaders can seek out the best type of financing in that category based on their size, funding needs and financing worthiness.
Equity Financing: Equity financing is when people have the opportunity to take an ownership interest in the company. Publicly traded companies sell shares in public marketplaces called stock exchanges. When a company does this, they are offering ownership so that they can raise money for the company in an equity financing deal.But publicly traded companies aren't the only ones who offer stocks to raise money. In fact, if you opened a corporation or a limited liability company (LLC), you would issue a designated number of shares when registering with the secretary of state. The original business owner or initial partners own the company stock, but they can issue shares to investors who are willing to take on the risk. Investors can be silent partners who are merely waiting for the value of the company to increase, so that they can participate in profits, or they are active partners helping to build or turn a company around.
Debt Financing: Debt suggests that you owe money. Even publicly traded companies take loans out or have debt instruments, such as a bond issued to investors. For most small businesses, debt financing means taking out some type of loan. How this is done really depends on the business size, the creditworthiness of the company or its leaders, and how much is needed.Many small businesses are started with a loan from a family member. This is common, but it can complicate family holiday meals, if the business is struggling. Another way a small business might start is to have an owner take out an equity loan against his personal home to use in the business. In cases like this, the business owner should take the additional step to properly lend the money from his personal finances to his business, to prevent commingling of assets.
Ideally, a business is able to obtain a business loan from a bank. The Small Business Administration (SBA) has a variety of loan programs with different qualification programs and protections offered to lenders, to encourage business financing. Some businesses are also able to finance a business venture, using a business line of credit or business credit cards. The SBA offers free consultations to review business plans, history and lending options for business owners. This helps the business owner address potential financing issues before going through the process with the bank and getting declined.
Lease Financing: This option for financing is most widely used for machinery, office equipment and business automobiles. Lease financing is similar to a loan, in that payments are made monthly to an agreed-upon contract balance. However, at the end of the contract, the item leased is returned to the leasing party, and the business must enter into a new contract for new equipment. This is a good option when a business wants to ensure that it has updated and current models of equipment and machinery. It also helps in overall cash flow, since leasing options are usually less expensive than borrowing options.Problems of business finance arise when you don't meet the requirements in these types mainstream options.Reference:https://smallbusiness.chron.com/business-financing-problems-292.html
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« on: July 13, 2019, 10:41:42 AM »
How Business Planning Leads to Better ManagementIn my experience leading dozens of business planning workshops in countries all over the world, I'd say only about 10% to 15% of teams I've encountered have an effective business planning process. Sounds low, doesn’t it? What many business owners fail to understand is that good planning equals good management.Let me explain. Planning is about managing resources and priorities in an organized way. Management is related to leadership, and it’s related to productivity.Here are three steps to get you planning better and, in turn, improving your management.
1.Devise a plan: As the business owner, you start by writing important details down. You don't need to sweat every detail of creating a long document. Instead, jot down essential points as bullets, and tables, and bare explanations. The strategy element of planning is to focus on what you’re good at, what matters, which people are most important to you and what you can do for them. It’s about positioning, determining your target market and product focus.It's important to document these details in order to communicate your vision to employees. If you don't have a team, there's value in referring back to your original thoughts regarding the path for your business and comparing them to actual results.
Related: 5 Ways to Kick-start Your Business Planning
2.Define success: In order to chart your path, you'll need to define long-term goals. Think broadly about how you see your business in several years.From there, get specific. You'll want to establish milestones for when you want to accomplish certain goals, and know who you will want to carry them out. Go beyond sales, costs and expenses, and look at what really drives your business. It might be conversions, page views, clicks, meals, trips, presentations, seminars and other engagements.Then, establish a review schedule -- when you and your team review changed assumptions, track results and make changes as necessary.
Related: Are You a Goal-Getter?
3.Put it in motion: Can you see the management brewing? Tracking and analyzing numbers can help you manage the work behind the numbers. You'll be in a better place to recognize and highlight what’s working and what isn’t working for your business and your team.Suppose traffic is up, but conversions are down. You collect your data, review it with your team and develop a plan to make changes toward reaching your goals. That's management.Managing your business successfully requires more than just praise and pats on the back. Sometimes it means focusing attention on problems, helping people solve them if possible, discussing and embracing mistakes, and, in the worst case, weeding out people who don’t care about bad results. This can all be accomplished more efficiently when you have a plan in place.
Related: How to Become a Master Problem SolverReference:https://www.entrepreneur.com/article/219424
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