The hurdle rate is the minimal amount of rate of return an investor needed from his investment in a project. It also called as “minimum acceptable rate of return” (MAAR).
Budget 2018 highlights
Finance minister Arun Jaitley announced budget 2018 on 1st February 2018. This budget brings some disappointment for investors also for some other sectors as custom duty hiked.
Arun Jaitley said that he proposed this budget keeping in mind the growth of Indian economy.
Here are some highlights of “Budget 2018”
Top reasons of start-up failure and how to overcome it?
Every year new start-up’s join the business industry with creative ideas and with a hope to establish themselves as business giants but some fail in achieving this goal.
Continue reading “Top reasons of start-up failure and how to overcome it?”
Growth can kill your business: Don’t plan your organisational growth before reading this
Companies with high employee retention issues are hard to succeed. As we are digging deeper into analytics we are becoming closer to have good maths on these points.
How much of new employees your existing organisation can handle and what’ll be it’s average and worst financial conditions.
We advice companies with high employee cost to revenue ratio, to keep an close eye on that ratio. If at any point that ratio is exceeding 0.4 points in any directions, your organisation will have trouble handling it.
So we’ld advice, have a process in place. And a good training program for new employees at the services that is giving you higher sales volume and higher profit. And keep an close eye on it. And keep ramping up sales here. But understand that ratio.
Grow up team in new services slowly. And so the sales.
Organisational turbulence is one metrics that takes most companies go down. But it’s hard to see early on. Often the problem arises after 5-6 months. And make it difficult to handle, even if you are highly profitable.
Growth kills more businesses at faster rate, and stability kills businesses at a slower rate. So keep growing, but understand stability keeps you liquid.
So before you keep growth on trajectory, ensure fund of at least 3 times that of CIH needed, hence a profit index of 200-300%.
If you are planning speeder growth and you are just 100% in profit index. Takes external investment of another 2times of CIH needed, suggested in Periodic Profitability Graph, within one month of beginning the growth implementation. And if in any moment during high growth, your profit index reaches 120% or below, ramp sales up and you need to keep that number there to not fall out pray of downward spiral.
For high growth, I mean to say at par or above 20% of your present organization head count.
Hope that helps.
How much should you raise or take loan after basic investments?
Small businesses and startups (mostly service-oriented) ask me for how much should we raise or take loan after basic investments? Here’s a simple math that works fine:
Base money: Get expenditure for the next 6 months covers (this is min. Better is 12 months)
Wastage: Get additional 20% for wasting charges (all company waste money in additional stuffs not needed) Lo an installments: Make sure you don’t have installments from day one. Else include them too.
What to do in these 6 months?
Do enormous tests: assign 10 customer/sales to each test depending on your product or service. each test shouldn’t go beyond 2-3 weeks. take a note of everything you learnt from these tests.
Prepare a plan: now take a list of approaches you are going to follow from your observation of your test.
Define target market: Keep only 1-2 in mind and washout everything else.
What to do in next 6 months?
focus, focus: Scale up on that target market and on that approach, while experimenting narrowly on side.
Do scaleup investments: hire, productivity tools etc.
If needed take another funding for 6-12 months: Make sure you are doing good in that.
Hope it helps. Please if it was helpful signup and make other small businesses signup at: https://www.slickaccount.com
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