Know your numbers well to rake in profit

Published on Wednesday, Aug 27, 2008

A joke I heard when I was a kid goes, “How can you immediately double your money? Fold it in half and put it back in your pocket!” If only making money was that easy.

Well, everyone from a business owner and CEO to company director dreams of hitting the bull’s eye and finishing the year in profit. But be it a winner of a business idea, a start-up venture or a profitable enterprise, uncertainty clouds the hori zon and things can go awry.

While there are no guarantees and no crystal ball can predict your success, there definitely are steps you can take to keep your operation pointed in the right direction – towards profits.

Is your profit what it should be?

Everyone is in business to make good money, much more than just paying the bills. This calls for proper planning and a complete business plan, not just educated guesses for hitting the targets. It is true that the overwhelming whirl of details and unrelenting pressure on the bottom line can drive you quite crazy.

An uphill climb awaits, you have to follow a disciplined approach without ever losing sight of the ultimate goal, to earn profits.

Be well informed – Every executive or manager should think and act like a business owner. Know your business’ worth and health in and out. Understand how it’s doing and what are the weaknesses that can be improved or corrected. Something as simple as an intelligent day-to-day observation can help you to provide value.

Crunch the numbers – There is no dearth of financial statements and projections that can serve as effective screening tools. Study figures like:

• Costs: Identify fixed and variable expenses and thoroughly check the budget allocations for each. This will unearth costs excesses and help you to control the same.

• Sales records: Apart from cost-consciousness, study projected sales volumes vis-À-vis actual sales patterns.

• Product price: Gain adequate information on your pricing strategy to determine whether you are charging less or more than the worth of the product or service. Analyse the cost per unit and adjust the final mark-up to absorb rising/anticipated expenses while keeping the price on a competitive level.

• Inventory: Generate a proper system of inventory as excessive stocking of raw materials or finished products can needlessly tie up your resources. Again, shortages of the same can negatively impact the bottom line.

• Profit and loss statement: Scrupulously evaluate this important statement to get a handle on each and every revenue and cost area. Study everything from the profit and loss for each of your products and product lines to the profit and loss for your entire operation.

• Break-even analysis: This is another financial tool, which will enable you to decipher the exact point beyond which the business starts to yield profits.

Therefore, look at all possible financial ratios and meaningful forecasts to gain a clear understanding of the business. Sound knowledge coupled with perseverance alone can help you to attain and surpass the targets.

The big picture – Do not restrict yourself to a single month’s sales or profit margin by itself. Put them in the right frame by say, graphing the operating statements, to note significant trends of what has happened and is likely to happen. As a consultant stresses on regular strategic planning with, “Your record of sales, your experience with the markets in which you sell and your general knowledge of the economy should enable you to forecast a sales figure for the next year.” Carefully analysing trends can help you to grasp opportunities as they rise and avoid crisis before they spiral out of control.

Call the shots – Draw on a balanced judgment to make timely decisions and transmit them into effective action accordingly.

Different business circumstances call for an informed tinkering like reducing the number of employees, looking for less expensive sources of manpower, discovering new customers, finding cheaper raw materials or using technology to its full capacity. Success calls for fast and flexible new practices, but only after determining all possible consequences of any course of action.

Control business activities – You have to control the activities of the company, not be controlled by them. It’s your job to overcome bottlenecks and garner a positive culture that motivates people and gets results. Effective HR management calls for designing well-structured jobs, periodically reviewing and aligning them, generating accountability at all levels, providing adequate compensation for quality work and controlling both absenteeism and turnover. Give enough attention to important tasks, but ensure that the business does not depend on you totally either.

In this struggle for professional management, you can also call on experienced entrepreneurs or consultants for expert guidance.

Yet, if your business is still not yielding the kind of profits you expected, do not be disheartened or lose hope. The pace of business demands persistent efforts and planning to be able to maximise the profit potential.

PAYAL CHANANIA

Bone up professionally to re-enter world of work

Published on Wednesday, Aug 20, 2008

You may have put your career temporarily on hold to raise a family, care for an elder, come to terms with bereavement or overcome a major illness. Else, it may have been a career break to continue your education or explore other options.

But, coming out of the self-imposed hiatus and returning to the workforce is easier said than done.

As you dust the dirt from your old certificates and draft a resume, the gap can engender feelings of reduced confidence and lack of certainty about your ability to perform a job. The very thought is quite nerve-wracking and daunting.

Even if you start out with hope in the heart, you cannot casually pick up your career from where you left off. Only if things were that easy…

Whether you have been away just for a year or ten, the rules will have changed. Especially stay-at-home parents and mid-life career returnees are shocked to find that their once-upon-a-time valuable education, qualifications and experience have now become obsolete and meaningless.

Trapped in the ‘over-age’ bracket, it is now difficult to compete with younger (read: enthusiastic, vibrant and energetic) candidates even for entry-level jobs.

With polite rejection behind every door, they find themselves facing a bleak future.

Making a comeback

Returning to the corporate world throws up difficult questions about childcare (for homemakers) and work-life balance.

Apart from these practical issues, here’s what you need to know and do to make a smooth transition:

Striking out anew – Since you have been away for a while it is not mandatory to go back to what you were doing earlier and continue in the same career field.

This career crossroad marks a perfect time to consider changing your work, particularly if it is out-of-date, too demanding or something that you don’t like. Figure out what you want to do in tune with your new interests, commitments, skills and personality.

Voluntary work, starting your own business, temping, freelancing or other flexible alternatives like working from home, part-time work and job sharing are appealing options that can help you to slowly brush up your skills while ironing out any hiccups in the transfer to the world of work.

You can even take self-assessment tests and meet with a career development professional to arm yourself with beneficial career tools as you step out in search of a job.

Making up for lost time – There would have been changes since you last worked; at times even the hiring parameters, preferences and work regulations can change drastically.

It is always advisable to keep track of what is going on even when you are not working. But, if you have negligently been out of touch, try to bone up professionally before you re-enter the world of work.

Read up industry news, professional journals and websites to keep abreast of your occupation, industry and working conditions. Research on what has changed, which skills are considered necessary and what you need to know to be competitive.

Talk to people in your network like former colleagues and supervisors about current trends, technology and expectations.

You will also have to refresh your skills, learn new ones and even retrain if looking for a new role.

Actual interview – Experts advise that career returnees should opt for a functional resume that highlights skills and work history instead of a glaring chronology of jobs. But, be positive and unapologetic about the gap in your employment history. Confidently explain that it was your choice to take time off to be a full-time parent or travel the world, as the case may be!

Get into corporate mode by promoting yourself and asking for what you want. Portray yourself as an effective and efficient worker who possesses the relevant skills and commitment even if you weren’t recently engaged in the workforce. But, be prepared, as you may have to start at a lower level or take a pay-cut initially.

Overcome the blues – Continue to be patient and optimistic, as it will definitely take time for you to land a job, especially if you are looking for flexibility to fit with your other responsibilities.

Steel yourself to handle the emotional strain, fear and depression as you can end up feeling torn and confused. Keep boosting your confidence and do not lose heart, as your perseverance will pay for sure.

This is a new chapter in your life with a good job waiting around the corner. Good luck!

PAYAL CHANANIA

Be flexible, adjust to new job requirements

Published on Wednesday, Aug 13, 2008

Mr. Verma’s energy and enthusiasm is at an all-time high as he lands a plum new job. Ceremoniously quitting the old job, he excitedly embarks on the new journey.

But, the party goes bust in less than a week. Two weeks down, he dismally decides that the new job is quite different from what he had expected. Disillusionment sets in making him wonder how he ever even thought that this job was perfect!

Sounds familiar? Sometimes, it so happens that a new job fails to work out as anticipated. There often is a frustrating disparity between the job you thought you were hired for and what you actually have to do. Before you start kicking yourself for the mismatch, consider this:

Hang in there – Starting a new job is an awkward phase; don’t judge in haste or start panicking on the very first day. You have to be patient and give yourself time to acclimatise with the new environment, colleagues and processes. Learn to courageously cope with the change even when you are overwhelmed with unexpected responsibilities. Maybe all that our Mr. Verma needs is to get to know his co-workers better or take the time to adapt to the new company culture.

For all you know, you may even be displaying classic withdrawal symptoms of the previous workplace. Just remind yourself of why you left the old job every time you hanker to get it back! Give it a chance and things will settle down soon, the new job may even turn out as a better fit than you expected.

Experts suggest sticking it out for at least 90 days, especially as the first six weeks are used for training new hires. Making this initial phase an unreliable representation of how a job will eventually play out.

Take matters into your own hands – Even if things don’t get better, it’s up to you to pull yourself out of the pit. Speak to the manager; express your concerns and dissatisfaction without griping.

The situation is still salvageable if you can work on the problems together to make the work more challenging.

You can try tweaking the job priorities, commitments or even goals a bit and voila, there’s your perfect job.

Be flexible enough to adjust to an alien work atmosphere, pay discrepancy, unusual job demands or new skill requirements, especially if the job has future potential. Try to endure the struggle as you can work your way up the career ladder inching towards more responsibility or greater satisfaction.

Square pegs, round holes – Six months in, and things still fail to evolve. Well, it does not take extra intuition to figure out that the new job was a mistake. Do not try to force fit yourself in a dead-end if there are genuine adjustment problems, unacceptable work demands, lack of respect or appreciation, unorganised structure or the corporate culture clashes with your values. Once you have done everything in your power to make it a better experience, its high time you move on. As a job consultant observes, “If you’re worried about what you’ll lose if you leave, think what will you lose if you stay?”

If you resigned gracefully and parted on good terms in the old job, you may even get it back. Else, discreetly start circulating your resume and network with ex-colleagues, old bosses, alumni and other contacts. Also, be prepared to justify to your prospective employer as to why you are looking for another job only after a few months into a new one. You can honestly explain that the job was a bad fit (read: decision) and you would like to pursue other options.

Where did you go wrong? “What looks great on paper isn’t necessarily great in reality”, aptly applies to a job search. Avoid career pitfalls from such mistakes by taking a hard-nosed objective look at the jobs on offer. Thoroughly research the company mission, vision and organisational structure, evaluate the position and responsibilities, and talk to co-workers and supervisors before signing on the dotted line. Self-qualify yourself for openings and target only those companies where you can both fit in and succeed.

All said and done, you deserve to give yourself better. Find something that will utilise your expertise, achieve your objectives and is in tune with your personality. The possibilities are infinite, go ahead and find a job you enjoy!

PAYAL CHANANIA