Wednesday, March 28, 2012

Why is cyber security important for SMEs?

Being the owner of a SME can often leave you with a lot of things to be managed. And if your enterprise is benefiting from utilizing the advantages of the world wide net, then you would also be facing a consequent threat to through online scamsters and cyber hackers.

Targeting smaller companies

Cyber attackers are now expanding into a new segment moving further from large IT enterprises to the more gullible Small & Medium Enterprises (SMEs), which are often found to be less conversant with the nuances of cyber crime. What’s more worrying is that these companies are targeted on a regular basis. A lack of information about such crimes and reduced proficiency are one of the major reasons for these crimes occurring in large numbers.
 
How to tackle cyber crimes
A lack of cyber knowledge is the biggest flaw suffered by the enterprises which are often duped by basic phishing attacks. Imparting information is necessary especially among staff. Another crucial step which could help you is to recruit trained staff which has the technical knowledge to handle similar situations. A lack of awareness is the key factor and hence, employees need to be regularly updated about such occurrences and asked to maintain safety against such threats.
SMEs have to understand this threat clearly and believe that their company could also be threatened by such an event. Many agencies believe because they are a very small enterprise, they are not under threat – a notion, falsified by the rise in cyber attacks over the years.

Another important factor could be the adoption of various technologies which are self-sufficient in tackling a cyber threat. Equipping your systems against viruses, spyware and other malicious codes is the most important step as the cyber attacks rely on the chinks in the system. You also need to take backup copies of the important business data from time-to-time to be protected in case of a severe attack to the system.

The office systems need to be secured and unauthorized persons should not be allowed to operate the systems. Presently, most of the offices operate a Wi-Fi network which needs to be secured so that illegal hacking cannot be executed on the systems. Each employee needs to be given their own separate accounts and care should be taken that they do not access data or information from your main frame systems.

Strengthen network security
Another key fact is to focus on network security courses. They are another important step in training SMEs about defensive systems to maintain security under such circumstances of an attack. Such courses inform oneself about the standard behaviour of a cyber attacker and also train them in the latest & best methods in defending the effects of such an attack. You should necessarily conduct an assessment of your present security status against such attacks and understand the fields in which they require an upgrade. Even though the systems may prove to be a bit on the higher side while setting up, their presence is an assurance on the long run.

Monday, March 26, 2012

Expert Speak: Mr. GK Pramod

Vision Statement For Your Enterprise

What is vision statement?
Vision means the long term goals of the business organization.

Let us ask the following questions to microlevel entrepreneur Charan Singh and Sunanda Pai to gauge the understanding of microlevel entrepreneurs regarding their vision statements.

Expert: “Dear Charan Singh and Sunanda Pai, can you tell me what is the long term objective of your business organization?”
Charan Singh: “Sir, I want to make more money”.
Expert: “Charan, I know every businessman is interested in making money, but my question is “What is the long term objective of your organization?”
Charan Singh: “Sir, please give me an example of vision statement so that I could understand it in a better way.”
Expert: “Ok. I think you know Amul (Amul is a milk product producing company located at Gujarat in India). Amul is a famous brand in the international market. Please note that Amul also started its business on a very small scale.”
“Amul’s vision is to provide more and more satisfaction to the farmers, their customers, employees and distributors.”
Source: www.amul.com
 
Cane-o- la which serves natural fresh sugarcane juice has the following vision
“To evolve as one of the best producer of quality sugarcane which is organically grown, extract juice scientifically and serve a totally natural, healthy and hygienic DESI refreshment in the world and continue to retain the position through constant education analysis, development and implementation as required by social, scientific, economic and humanitarian perceptions.”
Source: www.cane-o-la.com
 
Expert: Is it clear?”
Sunanda Pai: “Yes Sir, it is clear.”
Expert: “Now I want both of you to make a vision statement of your organization. I will give some inputs to you. Look at the self SWOT analysis and organization SWOT analysis and take the inputs from that to make the vision statement.”

Both of them agreed to do so and requested some more time to formulate their vision statements.

After one hour both of them came with their set of vision statements. Charan Singh (Fertilizer business) made the following vision statements for his organization and along with the expert; Charan Singh did the analysis of their points.

Vision Statements (VS) for Charan Singh’s organization along with expert’s analysis:

VS-1: To sell good fertilizer to customer.
Expert Analysis: This may not be the long term vision statement.

VS-2: To provide the best quality fertilizer, seeds, agro-equipments and pesticides for customer. 
Expert Analysis: This may not be the long term vision statement. 
VS-3: To be the one stop solution for farmers. 
Expert Analysis: This is more suitable.

After the discussion, Charan Singh and expert decided the long term objective of Charan Singh’s organization. The Vision statement for Charan Singh’s organization is “To be the one stop solution for farmers”
 
Sunanda Pai also came up with the following Vision statements for her organization and along with the expert; Sunanda Pai did the analysis of their points.
 
Vision Statements (VS) for Sunanda Pai’s organization along with expert's analysis:

VS-1: To create adventurous attitude to our customers.
Expert Analysis: Creating the adventurous attitude for the customers would be a difficult task. So this was rejected.

VS-2: To give the best experience of adventure sports to our customers.Expert Analysis: Sunanda Pai’s organization can always provide the best experience of adventure sports to their customers irrespective of very high investments. If Sunanda Pai can sustain the business for another 3 to 4 years, then definitely her organization can become the leader. This Vision statement is more practical.

VS-3: To be the global leader in the adventure business.Expert Analysis: For a Microlevel Entrepreneur to become a global leader, Sunanda Pai has to invest more money in her organization. This was practically difficult. Hence, this Vision statement was also rejected.

VS-4: To do business of Rs.50 Lac in the next 3 years.
VS-5: To open branches all over India.
Expert Analysis: The expert senses that points 4 and 5 will not make up a Vision statement because they are not long term objectives of Sunanda Pai’s organization (doing Rs.50 Lac in next one year, opening branches all over India are considered to be short term goals.) So, points 4 & 5 were rejected.

Based on this analysis, the expert and Sunanda Pai decided that the vision statement for Sunanda Pai’s adventure sport business is “To provide the best experience in adventure sports to our customers”
 
Importance of Vision statement
  • Vision provides a long term goal of the organization.
  • This would help the microlevel entrepreneur to setup a proper direction for his business.
Methodology for making Vision statement 

Step-1: Address all the microlevel entrepreneurs and explain to them what is a vision statement and also, how to make a vision statement?
Step-2: Ask the microlevel entrepreneur to look into personal and organizational SWOT analysis, and come up with a few vision statements.
Step-3: Growth Strategists/CEOs can sit face-to-face with the microlevel entrepreneur, analyse the vision statement, and arrive at a common vision statement for the microlevel entrepreneur.
 
Author’s Key Points:
  • Vision of the organization is very important to achieve the long term objectives of the organization.
  • The microlevel entrepreneur and growth strategists/CEOs need to have open minded discussion in making vision statement.
  • Vision should be the nucleus of the organization.

The blog has been authored by Mr. GK Pramod, Co-founder, The Second Gear - MBA for Non MBA's Mentoring Module Concept.
To contact the author, e-mail at gk@tothesecondgear.com
 
Kindly leave your comments and queries.

Thursday, March 22, 2012

The BSE SME Exchange is here

The month of March 2012 witnessed a remarkable moment for the Small & Medium Enterprises (SMEs) with the launch of an exclusive Stock Exchange, supported by the Bombay Stock Exchange (BSE). The much discussed project was initiated by the BSE and NSE to offer an alternative stage for SMEs to raise capital for their growth and progress. The BSE SME exchange shares a common platform and infrastructure with the BSE whereas the NSE launched its version ‘Emerge’ with an online version.

More freedom for SMEs
The SME Exchange marks a new beginning for all small and medium-sized businesses in India which were introduced to this concept in the past one year. It is believed that Indian SMEs lack information regarding equity capital, stock market and funding options besides banks. Their dependence on banks and private lenders can now be easily replaced by this new initiative. The SME Exchange is expected to provide equity financing which can lower the debt burden of the listed companies, resulting in lower financing expenditures and a healthier balance sheet. This can help SMEs in developing their business from expansion to acquisition. Another important contributing factor is the visibility of the company which would be boosted by such an exchange and offer them access to the capital market. It also prepares the SMEs to grow and break into the bigger exchanges. Start-up issues related to many SMEs can also be solved by the presence of an exchange.

The Exchange and its operation
Various exchanges such as AIM (London), TSXV (Canada), GEM (Hong Kong), KOSDAQ (Korea) and NASDAQ (USA) were observed and studied to adapt their salient features and best practices. The SME Exchange would involve a minimum of 50 investors and Rs 50 lac post-initial public offer (IPO) paid-up capital. Listing would be compulsory for companies which have Rs 50 lac to Rs 10 crores and companies which have a paid-up capital between Rs 10 crores and Rs 25 crores have an option to list either on the SME Exchange or the main exchange.

Welcomed with open arms
The Exchange has received an encouraging support from various segments of the industry including manufacturing, textiles, IT, agro-based enterprises, and construction, among others. Even merchant bankers have expressed their interest in the initiative. Focus is on encouraging investments from small industrial towns and cities such as Dehradun, Jamshedpur and Haridwar, for raising capital from the SME Exchange. Tier-II and Tier-III cities are expected to be a big market for the SME Exchange.

New beginnings
The listing of BCB Finance marked the start of the BSE SME Exchange. Six SMEs have been already approved to enter the capital market and seven more are expected to follow suit. The target is to include about 10 by the end of the fiscal year and then extend up to 100 in the coming 18 months. An estimate puts the number of SMEs at a whopping 30 million, out of which about one million have a potential to be listed on the SME Exchange.

Tuesday, March 20, 2012

FICCI and Facebook collaborate to help Indian SMEs


The Federation of Indian Chambers of Commerce & Industry (FICCI) and Facebook partner together to help the Indian small and medium enterprises (SMEs) to harness the capability of Internet and Social Media.

Mr Rajiv Kumar, FICCI's Secretary General, said, “FICCI is delighted to be the anchor partner for Facebook in India to run its global SMB Boost program. The SME sector is an area of critical focus for FICCI considering its impact to innovation and growth. In addition to working with Facebook to provide this Boost to our members, FICCI and Facebook will also integrate training sessions on online marketing through social networks in its tradeshows and Conferences for SMEs.”

Moreover, India currently got almost 6400-industrial clusters, out of which almost 6000 are low tech. The poor technology adoption continues to stay as a significant cause for the poor operational and marketing competitiveness in the MSME sector.

Jointly, Facebook and FICCI hope to make technology as the consistent growth factor for boosting the international competitiveness of the Indian SME sector via this partnership.

Monday, March 19, 2012

Budget Potpourri for SMEs

The year 2012 has witnessed a lot of political upheavals and financial uprisings are also expected in the year ahead. The Indian finance minister Pranab Mukherjee in his recent budget speech has offered a variety of moves to boost the small businesses sector.

The FM has mentioned that the government would source about 20 per cent of their purchases from the micro and small enterprises sector. This is expected to encourage the growth of this sector. The government has hiked the service tax rates from 10 to 12 per cent which may contribute to an overall hike in prices of various commodities. Encouraging the field of agriculture, it has provided duty relief to it. Similar attempt has been extended to other troubled sectors including infrastructure, railways, roads, civil aviation, health, nutrition and environment. Also, the agricultural credit has been promoted to Rs 5,75,000 crores.

Service tax would be based on a negative list with all services being taxed except for a list of 17 items. Some sectors have also been exempted from the taxation. A common tax code is planned which will combine the Central Excise and Service Tax.

Providing more sops for SMEs, the turnover limit for mandatory tax audit has been raised to Rs 1 crore from the previous Rs 6o lac. This would encourage growth among the SMEs which can utilise the necessary relief.

With regards to special SME industries, tax rebates are extended to sectors such as steel, textiles, branded readymade garments, labour-intensive sectors producing items of mass usage, low-cost medical devices and semi-mechanised units producing matches. Similarly, energy saving devices have been encouraged along with plant and equipment needed for solar thermal projects. The budget announcement also brought a special smile to MSMEs working in the handloom, power loom and leather enterprises who received a special waiver. The FM has also proposed weighted deduction for expenses related to skill development which will assist the MSMEs in investing more on skill development supporting quality production.

Government is planning a series of measures keeping in mind the need for infrastructural development and achieving a high rate of growth. Thus, resource raising would be facilitated in the coming financial year for SMEs. The government would be investing about Rs 5, 000 crores in setting up on an India Opportunities Venture Fund along with SIDBI to offer easy equity to MSMEs. This is in addition to setting up of Bombay Stock Exchange (BSE) & National Stock Exchange (NSE) SME exchanges. There would be an exemption on capital gains tax for property sales which are focused towards investments in SMEs. This can greatly solve the issue of funding for SMEs which are starting out or the ones which are planning to expand their business.

Also, the government is planning to come out with the Goods & Sales Tax (GST) in August 2012 which is expected to address the issue of multiple taxes faced by the Indian MSMEs. The MSME industry is eager to know about this implementation which will accelerate the growth of SMEs in a big way. 

Thursday, March 15, 2012

Delayed GST - major cause of worry for MSMEs, says IndiaMART CEO Dinesh Agarwal

With the ongoing pre-budget phase of Union Budget 2012-13, the most fertile minds of Indian Micro, Small and Medium Enterprises (MSMEs) are already discussing desired outcomes for next fiscal and bringing forth their recommendations.

Underlining his recommendations for the Budget, Mr. Dinesh Agarwal, Founder and CEO, IndiaMART.com, shares, "The MSME sector, having contributed tremendously to the Indian economy, has always lacked requisite support from all quarters. The time is ripe to support and equip them to establish their strong foothold in domestic and international markets.

Many believe that credit crunch is the biggest worry for MSMEs. However, they overlook the fact that higher and multiple taxes, and compliance with multiple departments are the key challenges for them due to their small set ups and thin management. We request the hon'ble Finance Minister to simplify and unify taxation for MSMEs in this year’s Union Budget. Also, consolidation of multiple departments will help address issue of compliance. It will help MSMEs rise above pertinent issues of conforming to several norms and lengthy, time-consuming paper-work.

Also, the delay in GST implementation has marred hopes of many MSMEs. They fear that now it may get rolled out in a much complicated form, not in its original shape. To tackle this, a pragmatic approach towards faster implementation of GST is required.”

Mr. Makrand Appalwar, CMD, Emmbi Polyarns Limited, Mumbai, also finds faster GST implementation as the most important requirement today and urges government to kick start it at the earliest.

Mr. Agarwal adds, “Essential infrastructural necessities such as land, power, connectivity, et al may seem to be very basic, but in reality they are extremely crucial for MSMEs’ growth. For this, more industrial zones with reasonable land prices must be announced while continuous power supply must be made available to factories, manufacturing set ups of MSMEs.” Mr. Dinesh Kotian, Partner, Ace Heat Tech, says, "Every enterprise aims to grow bigger and so do SMEs. Expensive industrial land comes as a major hindrance along with high interest rates in company's expansion plans. Steps should be taken to offer subsidized land and interest rates to SMEs. Also, a substantial number of SMEs have their setups in outskirts of cities. Unfortunately, basic infrastructural requirements like road connectivity, power supply, etc. are not in good condition in such areas. Government should pay attention here as well." Adding to this, Mr. Appalwar says, "Development of port infrastructure is very vital as the efficiency of exports depends majorly on it. We have a single port operational here in Mumbai and if any fault happens at the back end, entire operations suffer."

On the other hand, Mr. Agarwal praises government’s efforts for bringing effective policies that have helped build ‘communication infrastructure’ in country in the last 15years. He states, “What is now required is better and low-cost broadband services across the country, especially in tier-II and tier-III cities. This would allow MSMEs to utilize enormous business opportunities present online.

Strong steps are required from our government to free MSMEs from the credit crunch worry too. Execution of priority sector lending policies for MSMEs demands rigorous approach. Also, Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) needs to widen its ambit and cover more MSMEs which can avail collateral free financing. This will help entrepreneurs to overcome financial hurdles while setting up their projects or scaling up.

We also look forward to extension of facilities (such as Zero Duty Export Promotion Capital Goods (EPCG), Status Holder Incentives, etc.) for exporters under Foreign Trade Policy till March, 2014 instead of the current time line i.e. March 31, 2012. This will encourage MSMEs to achieve higher export figures.

We hope to see a budget that addresses key requirements of MSMEs in terms of basic infrastructure, simplification of taxation, easy access to funds, among others.”

Wednesday, March 14, 2012

Your Company Deserves to Have a Logo

A logo represents a symbol which is used to create awareness about an entity. It is employed by a wide variety of businesses, enterprises to symbolise their agency, product or even mark certain achievements in its history. However small you believe your enterprise is, there is always a tomorrow and you’re going to need a logo sooner or later.
 
Why create a logo
Small & Medium Enterprises (SMEs) can benefit from the presence of brand logo which would reflect the face of the company. It also enhances potential customers and marks the crucial first impression for the business in front of potential partners and business houses. It narrates the kind of people or the type of company which it is recognised as. Often, logos are designed on the basis of the name or function of a particular enterprise. Designed using graphical codes and symbols, they are made attractive and eye catching. Often, brand recognition and marketing is closely related to the presence of a beautiful logo. The better the logo, the more people will recognise a company; the more the recognition, the better goodwill for the agency.

Elements of a Logo
A logo can be distinctively divided into about three distinct elements, namely pictogram which represents a symbol or icon related to the company, the wordmark which mentions the name of the company and a tagline or baseline which mentions a brief description of the company or product. For example, the brand Nike has a pen stroke representing a check for pictogram with ‘Just Do It’ as the tagline. Considering Nike represents a sportswear brand, the logo reflects its relation to the field of sports.

SMEs can opt for typographic logo such as Kellogg’s or IBM which represent the company logo written in designer text format. Other firms go for figurative logo such as Apple or Shell which have a figure representing their brand. While there are companies such as Adidas or Reebok which have a combination of strokes representing their brands which can be termed as an abstract approach to logo design. 

 Making a logo that stands out
While designing a logo, care has to be taken to keep the design as simple as possible. Too many complicated graphics may turn the design into an eye sour and it may also become a ridicule for the company. Clarity of representation along with that of thought is a must for a successful logo design. The colours to be adapted for the design need to be bright and vibrant reflecting the right blend of brightness and contrast. Bold colours in a messy combination can ruin the design also.

Before designing, the agency also needs to observe trends in the industry and look at logos of competitors. Logos which appear similar could lead to losses for both companies. The logos should essentially reflect the company and hence a presence/mark of the company needs to be a part of the logo. Placement of the logo is also vital and SMEs should emphasize the symbol in all their correspondences and associate it with their various initiatives.

A wide variety of graphic designers and web experts are now churning out logos for upcoming SMEs. Advertising agencies also specialize in logo design although they would charge an exorbitant sum for the same.

Let the logo communicate your company's ethos, values and vision. Let it stand for your company and establish an identity in the market.