Category Archives: Business Advice

Time to Tune-up Your Business

spark plug

time to tune up

New year is a good time to take stock of your business. Like your car, business needs periodic tune-ups to make it run smoothly.

Car needs oil change to reduce friction and wear and tear on the engine, new spark plugs for for it to accelerate smoothly, and replacing worn out parts  so that it will not break down on you and leave you stranded. Your business deserves the same care.

 

Here are some quick thoughts on tuning up your business this year:

Streamline Your Processes and Systems (Oil Change)

Every business has systems and processes – in how you handle new and existing customers, how you handle your products and services, manage your people, etc. In a young, growing, organization, these constantly change. Dig deeper into your  systems, talk to your people who use these systems and see if you can change some of the steps or processes to make these more efficient. Identify a few flaws in your system and fix some of the easier ones right away. This will help your company run smoothly.

For example, in our company, to keep track of our inquiries and status of each inquiry, we have switched to a master spreadsheet which tracks new inquiries and their progress. This master spreadsheet as a google doc, accessible to all of the relevant staff members – so everyone sees the same copy, and can make edits. This now allows us to see the progress on each project and makes us more efficient.

Accelerate Your Growth (Change Your Spark Plugs)

When you look at increasing value of your business, nothing beats the bottom line – revenues and profits. Always think of how you can push the business. This could be offering more products or services, improving or upgrading your products or services, gaining more customers by better sales and marketing or a combination of all of these. Or it could be acquiring another company to gain new products or market share.

For example, in our company we are implementing a few changes this year. A simple thing is just making the whole process more efficient – from the time we get the listing to the time we put it to market and the way we approach prospects and follow up with them. And trying to Another thing we have already started doing is offering our customers additional products and services by expanding our marketplace. We have already invested in software that will allow us to offer directory and classified services as well as way to sell their own products or services. Over a period of time, we see this as an important extension of our marketplace.

Make Your Business Sturdier (Replace Worn out Parts)

Just like you don’t want to be stranded somewhere because the car won’t start due to an old battery or broken fan-belt, you certainly do not want to be to have your business suffer due to breakdown in your critical systems or equipment.  Time to examine your critical systems and see if  you need to invest in new equipment, software or hardware and how to ensure that your business will not suffer down-time.

One of the important steps that we have undertaken is to put all of our important documents and data in the cloud. We use ShareFile , Dropox, Mailchimp and Evernote software so that our whole team has access to the important files from anywhere in the world. We also use cloud-based email systems (Google appliance) and use software as a service whenever possible (for example for accounting and tax, ) so that we always have access to these services. We are also going to invest in a smart scanner such as Fujitsu that can digitize and file all your documents and has an ability to take different sizes of papers and scan them very fast.

You can think of what your business needs and upgrade or replace the critical systems that you cannot afford to be without.

Vacation – Prescription for Getting Unstuck

view from room_jamaica_2014xmas

Magnificent Jamaica – Ocho RIos Jewel’s Dunn River Resort

 

Are you feeling stuck in your business or career? If you feel that your life is a never-ending ride in a Ferris Wheel, looking at the same scenery, then vacation maybe your perfect prescription. Even if you are happy and moving ahead in your work, a good vacation may help you reach the next level.

Think you are too busy to take time off? Think again. If our President of the USA can find some time to take off for couple of vacations in a year, surely you can too. It is just how you look at it. Think of vacation as not running away from work. But think of it as time for a tune-up and for recharging your batteries. You will come back with a fresh dose of enthusiasm, and ideas that will energize you.

And vacation does not have to be expensive. If you cannot afford an expensive trip, you can go to a soothing place nearby or even have a ‘staycation’. You may stay at home but do something different. If you can afford it, however, then perhaps go to a different country, experience a different culture. You will learn something new from that culture and gain a broader perspective. About a week or so maybe enough for you to get re-energized.
I truly feel that in order to develop the big ideas, you have to step out from your conventional settings and get away from the daily routine. This is why many companies have their meeting in retreats.

We have a tradition now of taking a family vacation in December during Christmas Break. It allows us to connect together as a family and talk to our twin sons (who are now in college) without distractions from their friends and our work and do things together as a family. It allows me to reflect on the year, see what excites me and my colleagues, and what new initiatives and projects we should be doing in the coming year, and what we can learn from our past mistakes.

More Importantly, it allows me time to read a lot of different books and learn from other people’s experiences.

This Christmas vacation, we spent a few days in Jamaica. Spending the time by the Ocean and enjoying company of my family and the hospitality of the resort and the Jamaican people was invigorating.

But I also spent quite a bit of time reading a number of books which were both inspirational and provided practical tips on how I can improve myself and my business.

I am happy with the progress we have achieved last year in our business, excited about new possibilities in the coming year and can hardly wait for implementing our new ideas this coming year. I wish all of you the very best for 2015 and urge all of you to make vacations and time off as important tools in your arsenal on how to take your business or career to the next level.

Build or Buy – That is the Question!

carpenter toosWhen you are looking to get into the laboratory business – should you go out and try and buy a lab or should you build it from scratch? Well it depends.

It depends a lot on the type of lab (whether it is in highly regulated industry, such as a clinical lab and where someone else, such as insurance companies decide on what you can charge), whether you can find the type of lab that you are looking for in your preferred geographic area, and last but not the least, your own personality, skill sets and knowledge.

Case for Buying a Lab

More buyers seem to prefer going this route as it seems like a safer route to take. Particularly, if you are not experienced in this industry. For a healthy laboratory, you avoid the steep learning curve, you get a business that is generating a positive cash flow from day one. You inherit a working system and a trained staff. You also are more likely to get a loan from the bank to fund your dreams. You can bring your own skills and capabilities to grow the company. As they say, it is much easier to make the second million than the first million.

And in some industries, it may be perhaps the only preferred choice. For clinical labs in certain states such as NY, it takes 12-18 months or longer to get CLIA-accreditation. and in certain states, small independent labs have a hard time getting accepted by the insurance companies. It would make sense than to buy an existing lab with CLIA-accreditation and existing insurance contracts if such  a lab was available.

But expect to pay a price for this – the labs are typically (but not always), valued by a multiple of EBITDA. EBITDA is a metric defined as Earnings before Interest, Taxes, Depreciation and Amortization. We’ll discuss lab valuation in an upcoming post, but expect to pay about 3-5x of EBITDA for a healthy lab. So if an EBITDA for a lab is say $300K, expect to pay on an average about $1.2 million.  Can you afford it? Is it worth the price? Are you better off building on your own? Exception to this maybe if you find a good lab which is doing poorly but you see great potential in it and are confident that you can turn it around. Such “turn-around” labs can sometimes be had at a bargain.

 Case for Building Your Lab

If you (or someone in your team) is great at sales and marketing, have rich contacts in your industry, and are confident that you can bring the business to your new lab, or you are buying a lab for internal research, perhaps you should build your own lab (as long as regulatory hurdles are not too high). The advantages include cost savings (you could save as much as 50-75% over buying a healthy lab), you can have it at a location you prefer, equip it as you want it, and build your own culture in your business. And if you are unsure about how to go about setting one up, there are companies and consultants who can help you set it up.

 Summary 

Buy a lab if:

a. You are looking for a “turn-key” lab with ready cash-flow and which may perhaps need only a few tweaks

b. Regulatory and insurance constraints makes this a much more practical solution

c. You are flexible as to the exact location

d. You are looking to grow your market share via acquisitions

 Build a lab if: 

a. You can bring in business or have captive internal business

b. Want to work on a shoestring budget without taking in a lot of debt

c. Want to have it on your terms – building your own culture, your preferred location, and choosing your own equipment

d. You enjoy creating business from scratch

e. You can survive for some time without an income or salary

Live Like There is no Tomorrow – Lessons of 9/11

 

twin tower lights

two light beams where twin towers were

It is a somber day today – 10th anniversary of 9/11 and my eyes are tearing up as I listen to family members reciting the names of loved ones they lost that fateful day and giving brief tributes to them. They lost fathers and sons and grandsons, grand-daughters, daughters and mothers, uncles and aunts, brothers and sisters, friends and colleagues.

I still remember that day vividly. I was on my way to work in Brooklyn and as our subway train A passed by the World Trade Center stop just after 8:45 am on its way to Brooklyn, me and my fellow passengers were blissfully ignorant that at around the same time, a plane had just hit the North Tower. I was still day-dreaming about the Sunday evening two days ago, where our family and our relatives had all gotten together to celebrate my wife’s birthday at one of our favorite vegeterian Chinese restaurants in Brooklyn Heights. Afterwards, we had spent a leisurely Sunday evening, strolling by the promenade on the waterfront there, enjoying the mimes, watching a shooting going on for a film, and mostly soaking in the breath-taking views of the Manhattan skyline against the setting sun, with the two WTC towers defining the NY skyline. Little did we realize that this is the last time that we will be able to see these towers from this spot.

Life seemed perfect then!

As our train came to our Brooklyn MetroTech station, I sanpped out of my day-dream, and hurriedly made my way to our building. I was surprised to see a crowd of people staring at a bank of TV monitors that were in the lobby. They were showing smoke coming out of one of the WTC towers, with the report that a small plane had crashed into it. I made my way to the office on 11th floor where we had a clear view of the WTC towers and NY skyline. We were alternating between watching the TV and looking at the WTC towers when some of my colleagues came running after they saw a second plane plow through the second tower.

Suddenly everything changed.

And as we watched the events unfold throught the day, everybody seemed shell-shocked. The Brooklyn-bridge was chock-full of people walking towards Brooklyn from Manhattan with a dazed look on their faces. Late in the evening, after train services resumed and I could take the train back to NJ, I remember how quiet the train-ride was. We were blankly staring outside – as our train passed by the area from where we should have been seeing the WTC buildings, we only saw lot of smoldering smoke. There was an eerie silence in the train as we were absorbing the enormity of what had happened. We were all crying silently inside, thinking of friends or relatives we might never see.

Luckily, we were spared from loss amongst our immediate family, friends or relatives. But you always knew someone who lost someone dear, and although you did not know them, you felt a heavy heart and got teary eyed as you heard or read about their stories. For the next month or two, during commuting to work, I would read NY Times’s special feature, Portrait of Grief, where they had briefly chronicled short biographies of the victims (see http://www.nytimes.com/interactive/us/sept-11-reckoning/portraits-of-grief.html). This series, beautifully chronicled, gave you much better understanding of the victims and their families. It provided me with a way to grieve, knowing a littlle bit more about the background and lives of some of these people. They had so much life, so much talent, so much to give to the society, so much love for their family and community.

 Lessons From Survivors

The stories of survivors was also gripping. Recently NPR radio had a show, talking to some of the survivors about the experience. And it was just as moving and inspiring.
And so today, on the 10th anniversary of 9/11 as we pause for a few minutes to remember those who perished, and salute the sacrifices made and the heroism shown by our first responders and many other heroes of the day, let us make a few pledges:

  • Let us make sure that we urge Congress to give full health benefits to our first responders, many of whom have contracted cancers which are not covered currently by health insurances. Our first responders do not have to fight to get the health benefits.
  • Let us salute the sacrifices made by our troops fighting for our freedom in Afghanistan and Iraq, and if we have businesses where we are hiring, let us see if we can help returning troops a chance to make a decent living.
  • Let us also learn the lesson from survivors. One of the messages resonating through this is that life is precious. It is a gift. You do not know whether you will have tomorrow. So make the most of the present. Sieze the Moment. Live it to the fullest as if there may not be tomorrow.  Give it your best – in your work, towards for your family and friends, and to your employees and co-workers
  • Let us also work together to make America strong again. It is still the country where most people want to come to – a melting pot of cultures and religions, tolerant to contrasting view and ideas. But we cannot rely just on Government to turn around the economy. We all have to do our part. In JFK’s words – “Ask not what the country can do for you but what you can do for the country”. If you are an employer, put emphasis more on hiring people and expanding business rather than firing people and cutting cost. 
  • Let us manufacture / outsource services in the US when we can, buy American when we can, and have an optimistic attitude that tomorrow will be better. Beleive in that, take some chances, and hire for tomorrow’s growth. If everyone starts believing that tomorrow will be better, it will be better.

God Bless America.

Thank you and so long till later!

Yatin Thakore