Archive for December 21st, 2006

Cost of adding new Employee for a startup

For people getting into a business general way of calculating cost is cost of establishing infrastructure + employee salary and other day to day cost. They dont take to tender in other important aspects example addition of employees mean capability to process more business transactions. Which bring in other cost to business. Recently in discussion with another collegue let to working out metrics for calculating per employee/set addition cost to organization per month.

Now lets try to list down important functions for an organization

– Sales & marketing

– Technology

– HR

– Admin

– Accounts

Now lets analyze impact of addition of new employee to each function

Sales & Marketing – increase in cost to acquire more businesss to set off cost of hiring additional employee

Technology – cost of providing IT & Communication infrastructure like phone for making/recieving calls

HR – talk about microsoft advertisement on running people ready business. This is not only the payroll or salary but cost spent on training employee. Time given to settle down in organization and opportunity vs risk. Cost over 18 months to retain the employee with skill and careerpath vs other companies in segment.

Admin – Cost of having another employee may mean providing additional resources like space, lunch, transporation for employee, receptionist to manage if visitors make visit to staff

Accounts – Cost of processing additional business transactions in terms of account recievables collections and other account payables recieved.

Once all these above factors have been factored in only then can we really calculate the cost of addition of a new employee into organization.

More Information for starting up in india : Startup India 

Travelport , Cox and Kings, Thomas Cook, Franchisee Model is it for you?

If you have got 300-500 sqft retail space and passion to be a travel manager. Then why not start your own travel agency. Till date the world of travel business is considered very shady with various commission structure in place creating large value chain with multiple hands before actual goods reach to customers. With launch of online sites things have changed and travel industry is transforming.

But with people like Reliance Retail starting up travel desks is it suitable for you to get into value chain with travel port or Cox & King Franchisee kind of model.  Though it will help you  get into with leveraging established brand name. Things you should decide before joining in

# Pressence or availability of footfall in area where your operations will be. The players are banking on your pressence to be in retail mall or market where 70% of your business to derieve out of walk-in customers.

#You should look at existing competition in and around the area. If even if you have 2 existing travel agents in area still it would not be a bad idea. As first examine travel agents location. Most of the travel agents i have seen are based on 1st or  2nd floor of business complexes. This often states a statement for me they are banking on 70% phone based sales and 30% walk in customers.

#The area you are opening your business has potential for air travel or not. If very low income group people are around than its not the best of the idea as trust me non of the travel agents are banking on selling hotel rooms.

# You are looking at working capital of 50K per month. With just 2 employees.

Travel is one of the industry which is not going to die and evolve according to people s requirement. You are looking at starting a business which in indian terms can be passed on from generation to generation or sold after 3-5 years of working with good return on investment.

How to transform Family business into Corporate Entity

Though the subject is pretty vague its important for new educated generations joining businesses established by earlier generations in family. Often business is used by families to generate employment for all individuals wishing to work. This lead to delegation of task to individuals which may not be their specialization but created due to their pressence in business.

Lot of new generations when join the business for them the role is to takeover the inherited career path of their father keeping intact the business process and machinery in place. Though this is changing in big business houses. Small and Medium enterprises are still following the traditional approach. Any business is again dependent on three pillar of engagement

– Vendors or Suppliers

– Customers

– Employees

Most of the new entrants are taught how to deal with the 3 to keep established business process moving. Some are better entreprenuer than previous generations hence may optimize the process to function better. Or some may even start additional processes to support the existing processes.

The idea is if their exist an established business process with 3 level of engagements. Why cant we bring in proffesional business managers to run the process. whereas freeing the holding or business owner to take a step back and review overall business functioning in an investment proposition way. Just like people give advice to any startup please keep an admin guy the reason is if you are busy paying bills and running after payment collection than your actual skills are going to waste.

So if we take example of Anil Ambani how successfully he has turned around a family business into a corporate entity. By creating a board of skilled business managers he has created a frontline whereas his skills are easily divided for the utermost group and strategic requirements. The business managers keep the existing strategy created in execution and provide feedback back to him for improvement of strategy based on ground reality

Hence argument for new entrants is to map the business process if you can keep it running than so can a business manager. This way you will find time to become a better entreprenuer by purusing other business interest helping in investment and great wealth creation dream.

More Information for starting up in india : Startup India

Travelistic – New way for Indian Travel agents to promote their services

Travelistic is not reinventing the wheel. We have previously covered services by like of geobeats on similar line on this blog. But important thing which i noticed and made me write a post on the site was. Once you click on india as a destination on map. It shows you option to view 3 videos available on india. Out of the 3 videos posted 2 are advertisements clips created by a travel agent using the service to promote his site and get people to contact them if they wish to travel to india.

This is an interesting way which not lot of travel agents have thought to explore. If travel agents start creating content on the internet. They can surely take advantage of people recognizing them. Espically if they start creating travelougues which will take away business from lonely planet. These sites are banking on peoples liking to watch travel videos done by fellow travellers rather than just reading some text thrown at them.

Contact Details Call Me :+91-9910444460
December 2006
« Nov   Jan »