Own Vs Build

Many of the readers may feel that I have got the title wrong. In the world of business and management, 'Buy Vs Build' is a very popular term. It refers to the decision of a company to buy a capability (through the means of Outsourcing) or build a capability in-house. However, this blog and its title has been created from the point of view of individuals, especially fresh college pass-out graduates, many of who often face the dilemma of starting their own business (i.e own a company/work of their own) or working for someone else (i.e. building someone else's business/work).

I thought of jotting down a few points which I sincerely hope would help some of the readers to take a better decision. Below are some of the advantages and disadvantages of working independently viz-a-viz working for some company.

Benefits of being an Entrepreneur:

1.       Control over one’s time: I feel the biggest advantage of being an entrepreneur is that one has complete control over his/her time. An entrepreneur does not have to be follow a fixed schedule everyday. He can take out time for his personal work/issues whenever he feels the need to. An entrepreneur can start his work any time of the day and does not have to necessarily follow the 9-5 schedule. He has lots of flexibility with regards to his work timings.

2.       His own boss: An entrepreneur is his own boss. He is not answerable to anyone until and unless there are partners who can question him. An entrepreneur does not have to suffer from performance anxiety nor does he have to constantly think of impressing his boss with ways apart from his work.

3.       No performance appraisals: People who have worked in any kind of company know very well that everything you do should ideally have a positive impact on your appraisal; else there is not much use of doing that work. An entrepreneur does not do things merely because he will get to put that in his performance appraisal self-input sheet.

4.       Dedication and Creativity: Since an entrepreneur starts his own business with his own will and out of his own zeal to do something and out of his own interest, he is more than 100% dedicated to his work i.e. he owns his work. He does not have to be pulled to his work; rather he is always involved with it. This leads to creativity as well. When you do something out of your own interest and not out of compulsion, you will tend to be more creative.

Risks involved with being an Entrepreneur:

1.       No fixed salary/surety of money: This is probably the biggest risk involved with being an entrepreneur. An entrepreneur does not have the security of receiving a pay check at the end of every month or fortnight. He always has to ‘EARN’ his salary. He cannot take off for a long period and still expect to be paid.

2.       No insurance or sick leaves or privilege leaves:  An entrepreneur does not get paid when he is not working. Hence, he cannot take a long sick leave and still get a pay check at the end of the month, without any pay cut. He does not get to enjoy paid or privilege leaves either. Hence, he cannot go off on a vacation for a very long time without any stress of continuing the business at home.

Moreover, almost all the companies today insure their employees for a huge amount. They take care of the medical bills of their employees as well. And some companies pay for the medical check-up or medical processes of the employees’ parents and wife and children as well. Such kind of medical and life insurances do not exist for entrepreneurs until and unless they buy the insurance products from the market, which are most of the times very expensive and also such insurances usually do not cover parents who are quite old and even if the cover parents, they will not cover parents’ pre-existing medical conditions.

3.       No office life/work life: Company sponsored luncheons or dinners are the norm in the current corporate culture. Going out with colleagues on weekends for corporate events like team building exercises, sports activities, etc is again the norm nowadays. An entrepreneur does not get a chance to do such things, most of the times. He does not have a good office life to enjoy. He does not get to meet a bunch of colleagues every day. This may lead to a lack of social life. An entrepreneur may end up doing only work and no play.

All sorts of comments, suggestions or feedback are warmly welcome.

Government's Involvement in Business

I feel that a certain level of involvement of government in every business is very important. And as a business grows and expands its customer base, involvement of government becomes that much more essential in order to protect the interests of the customers of the business/company. However, it is very difficult to quantify or measure this involvement of governments.

We have seen during the economic recession of 2007-08 (as per some analysts and economists, this recession has not yet got over. Hence, as per them, I must write recession of 2007 till date), companies like Lehman brothers lost money and their business and in the process made several of their customers poorer. The economic recession of 2007-08 hit the financial institutions of most of the developed and developing countries like South Africa, China, Brazil, etc. However, the effects of the recession were very limited in the case of financial institutions of India, a fast developing economy of the world. Financial analysts and economists say that this was due to the adequate involvement of the Indian government in the functioning of banks and other financial institutions of the country. The regulations and policies which the government of India has outlined for its financial enterprises helped them wave through the period of recession.

The irony is that the same companies which do not want any kind of governmental involvement or interference, as they would like to call it, ask the government to get involved in their business when they see bankruptcy looking into their face. Hence, Lehman Brothers and gigantic companies like General Motors, General Electric and American Express wanted the US government to get involved and bail them out of the mess which they created in the absence of any governmental regulations. In India, Kingfisher Airlines, an airline company owned by Vijay Mallya, a business tycoon who owns a Formula One racing team and the United Spirits Ltd, the largest spirits company in the world by volume, is also facing the prospect of going bankrupt and hence wants the Indian government to bail it out using public money.

Governmental involvement is necessary since a government runs by public money, money collected through exorbitant taxes. And since, in most of the businesses that we are talking about here, public money is involved in some way or the other, I feel it is very justified that the government, which is a representative of the public by virtue of thriving on public money, is involved to make sure that the business does not cross lines of ethics, accountability and responsibility towards public or even the environment.

This takes us to a very important aspect of business which was hitherto not given much due by businesses across the world. Most of the times, in order to make money, businesses do not heed their responsibility towards the environment. Cases of dumping toxic materials into water bodies and contaminating the environment with toxic waste or gases abound across the world. In India, one such incident happened in 1984 when an act of irresponsibility by Union Carbide took lives of thousands and thousands of local people in the adjoining areas and impaired generations of people in various ways. Nowadays, there have been instances of e-waste being dumped by multinational companies near the shores of third world countries. Such acts lead to deterioration of health of huge masses of people, as the e-waste gets into the ecological system. In order to avoid such instances, governments definitely need to draft policies and regulations and they need to make sure that these policies are being followed diligently. Some kind of honest auditing by the government is absolutely essential.

Hence, I feel government involvement is absolutely required.

Characteristics and Features of a Successful Company

As per me, to be successful, every company needs to have some external characteristics as well as some crucial internal characteristics. The external characteristics here are those which are easily visible to the outside world. And by internal characteristics I mean those characteristics or features of a company that only the people working in the back ground can see. In all probability, as far as I can see, these people who work in the background are the employees of the company.

External characteristics:

a)      Service to customers: Before moving to the US in 2012, I stayed for 12 years (2000 - 2012) in Bangalore, a city in southern part of India. I call Bangalore my home. This city is host to thousands of restaurants. Every Friday, newspapers carry review of a new restaurant that opened the previous week. However, not all these restaurants run successfully for a long period of time. Initially, they put lots of emphasis on customer service and quality and taste of food. However, once they start making money, they lose the plot and subsequently even their customers, who want to get the same, if not better, quality of food and service every time they come to the restaurant.

Restaurants belong to the service industry and hence customer service is of paramount importance to them. However, I have observed that every company, big or small, can sustain itself only if it is able to give a service of supreme quality.

Airtel is currently the no.1 data and communication service provider in India. It is the third largest telecommunications company in the world. I have always been a huge fan of Airtel only because of their superior customer service. And because of this, Airtel has always been able to command higher calling rates as compared to its competitors.  However, in recent years, its customer service has seen deterioration. The customer service agents are not up to mark and most of the times do not deliver their promises. The time duration to resolve an issue is quite long. This made me leave Airtel and take connection from one of its competitors. Not only me, but even my friends are complaining about the declining customer service of Airtel on their Facebook pages. In today’s time, when Facebook and twitter identify the individuality of a person, an incident of bad customer service spreads like wild fire and moulds people’s perception of a company or a company’s external characteristic. Hence, as per me, customer service is the no.1 characteristic of a company, from the point of view of finding a success mantra.

A good customer service is highly essential to not only find and acquire customers but also to retain the existing customers and find new customers.

b)   Quality and Time: To be successful, it is very, very important that a company manufactures quality products that meets the need of its target customers and deliver the products in time. And the company will have to do so very consistently. Not only do companies need to shorten their lead times but they also need to deliver the products within a short time window. In today’s busy world, making your customer wait for a four hours window would be enough reason for him/her to look for the services/products of a competitor.

Internal characteristics:

a)       Keeping employees happy: Be it a small coffee shop or a major IT company, the top management needs to understand that the company cannot grow or become successful as they want it to until all the employees of the company feel that they belong here and the company belongs to them too. To achieve this, a company has to give equal importance to each and every employee, no matter what his designation or level is. A company cannot grow if its employees are not happy with their compensation or with their work or if they are facing personal issues. A successful company will definitely have a system in place to address even the personal issues of its employees.

b)     Finding the right customer base: In order to be able to serve its customers effectively and efficiently, as pointed out above, a company must have a great analysis/analytics team which can effectively identify the right customers that they would need to target to sell their products/services to. A restaurant specializing in Italian food items, but residing in a predominantly English speaking region, cannot afford to have waiters/managers speaking only Italian. If you do not identify or recognize your customer base correctly and do not act accordingly, you will not be able to give good service to your customers. No wonder terms like 'Big Data', 'Data Scientist', etc have become so popular. Consulting companies are offering to help their clients find out the right customers for them and focus their marketing efforts towards those 'right customers', by making use of the tons and tons of (BIG) data that their clients are sitting on.