Tag: Business growth guide

As part of the top management of a smaller business, you may often find yourself in the unenviable position of having to decide on funds allocation. Since resources are limited and opportunities to allocate funds towards growth are usually numerous, it is important to ensure that you consider all aspects carefully.

One of the ways you can ensure that the limited resources of your business have been used to the maximum benefit is by undertaking a cost-benefit analysis.

What is Cost-Benefit Analysis?

A cost-benefit analysis, as the name suggests, looks at each project from the costs involved and the benefits that you get from it. Doing this enables businesses to approach any major cost with a systematic approach to determine which options to embrace and which to ignore. People in charge of projects along with the finance analyst team will look at the benefits of a particular cost.

Additionally, some consultants or analysts create models to put a monetary value on intangible things like the advantages and disadvantages of relocating to a designated destination. Cost-benefit analysis helps companies prioritize their capital outlay as per the benefits they will get from a particular investment.

Understanding The Meaning of Cost-Benefit Analysis

Prudent managers are prepared with a cost-benefit analysis to assess all the costs and profits that a company might produce when they pitch for funds towards starting a new project or building a new facility. Depending on the results of the analysis, it will be decided whether the idea is financially viable or whether the company should move forward with a new venture.

The opportunity cost is often considered in the cost-benefit analysis as a part of the decision-making process. Opportunity costs are benefits that may have been realized if a different alternative was chosen. The opportunity cost is, in other words, the value of the opportunity that is lost or forgone as a result of a choice or decision.

Project managers can analyze the advantages of many action plans, rather than just the one currently being considered in the cost-benefit analysis, by taking opportunity costs into account. The cost-benefit analysis helps to make better decisions since it takes into account all available options and also potential missed opportunities.

The results of the entire costs and benefits should be quantitatively evaluated to determine whether the benefits outweigh the costs. If so, continuing the project would be a wise decision. If not, the company should re-evaluate the project to see if it can be modified to raise benefits or lower costs to make the project profitable. Otherwise, the company should probably not take up the project.

Cost Benefit Analysis Example

To understand how cost-benefit analysis can help you make the right decision, let’s look at an example.

Example:

A company is considering building a new factory in a certain location. The company would need to invest INR 1 crore in the construction of the factory and an additional INR 20 lacs per year to operate it. The factory is expected to generate INR 50 lacs in revenue each year.

In this example, the benefits of the factory are the revenue generated, while the costs are the initial investment and the ongoing operational costs. By comparing the benefits and costs, the company can determine whether the factory is a worthwhile investment.

Costs:

• Initial investment: INR 1 crore
• Ongoing operational costs: INR 20 lacs/year

Benefits:

• Revenue generated: INR 50 lacs/year

Net Benefit = Benefits – Costs

Net Benefit = INR 50 lacs/year – (INR 1 crore + INR 20 lacs/year) = – INR 70 Lacs

If the company wants to recover its complete initial setup cost in the first year itself, then this project is not viable. However, if the company is looking at a long-term return, then the project shows profits from the fourth year of operation.

Keeping its long-term plans in mind and the above cost-benefit analysis, the company can make its final decision.

Process of Cost-Benefit Analysis

There are several cost-benefit analysis techniques available and you should pick the one that suits your situation. However, most cost-benefit processes often include some form of the next five steps.

Determine the Project Scope

The first step in a cost-benefit analysis should start with a complete understanding of the project circumstances, determining your goals, and developing a framework to shape your scope. Decide whether to expand to gain market share or whether to upgrade a company’s website are two examples of possible cost-benefit analysis goals.

The project’s initial planning phase includes determining the project’s timetable, resources needed, restrictions, necessary staff, and evaluation methods. At this step, a business should determine whether it has the necessary tools to conduct the analysis. A business might discover, for instance, that it lacks the technical personnel necessary to conduct an adequate study.

During the project scope creation phase, key stakeholders should be identified, informed, and given the chance to express their opinions. Depending on the findings, it might be a good idea to include people who will be most affected by the analysis’ conclusion (for example, if it calls for redesigning a company’s website, IT may need to hire numerous additional staff and should be consulted).

Calculate the Costs

It’s time to start looking at numbers now that the framework is established. The cost of the project is determined in the second step of a cost-benefit analysis. The following may be included in costs.

• Direct costs include labor used directly in production, inventory, raw materials, and production prices.
• Examples of indirect costs include rent, utilities, managerial overhead costs, and electricity.
• The decision’s intangible costs, such as how it will affect clients, staff members, or turnaround times.
• Opportunity costs, such as the difference between developing a facility and buying one, or alternative investments.
• The price of prospective risks such as those posed by regulations, rivalry, and environmental effects.

Measure, Analyze, and Implement

The cost-benefit analysis analyst must frequently summarize their findings before presenting them to management. This involves succinctly outlining the costs, advantages, net impact, and how the results finally support the analysis’s initial goal.

In general, if a cost-benefit analysis is favorable, the project has more advantages than disadvantages. A business needs to be aware of its restricted resources because they could lead to mutually exclusive choices. For instance, a business might only have so much money to invest, so even though upgrading its equipment, website, and warehouse might be profitable from a cost-benefit perspective, it might not have the funds to do so.

Cost-Benefit Analysis Advantages

There are many benefits to conducting a cost-benefit analysis. Using data-driven decision-making, the technique bases any suggested course of action on quantifiable data that has been obtained specifically to address a single issue.

A cost-benefit analysis needs a thorough investigation of all costs. This entails taking unforeseen expenditures into account and comprehending the many categories and traits of spending. As additional research is conducted on the state of outcome for the project, which gives better support for strategic planning attempts, the findings from this level of analysis only become stronger.

Quantifying non-financial measures is also necessary for cost-benefit analysis (e.g., what is the financial advantage of higher employee satisfaction?). This may be challenging to evaluate, but it compels the analyst to think about project elements that are more challenging to quantify. A cost-benefit analysis’ ultimate output is a straightforward report that facilitates decision-making.

Conclusion

Cost-benefit analysis helps you take on a holistic point of view much like spend management. Spend management focuses not only on the expenses that a business incurs but also includes the collections aspect to help you plan cash flow better.

At EnKash, we offer an AI-enabled spend management platform that helps you plan your business spending better and maximize savings.

In business, where its entity and the owner are same, it is referred to as sole proprietorship. There are various other names for a sole proprietor, such as a sole trader, individual entrepreneur, etc.

Any individual who wants to start a business or company with less or more investment can register for a sole proprietorship. The control, decision-making, and execution will be in the hands of the sole proprietor.

Moreover, the business owners are entitled to apply for business loans which can help with the investment capital for business. Now that we have discussed sole proprietorship meaning, let us further discuss it in detail.

Sole Proprietorship: Key Points

• The owner has full control of the business and bears all the profit and losses alone
• The business finances and the owner’s finances are one and the same thing
• Sole Proprietorship requires minimal documentation hassle-free registration process
• Sole proprietorship is different from One Person Company
• These are easy to establish, which makes the quite popular among small business owners and entrepreneurs
• In Sole Proprietorship, the business is also taxed as an extension of the owner

Features of Sole Proprietorship

Below are the key features of sole proprietorship:

• Complete Ownership: There is no separate existence of a sole proprietor hence all the debts can only be recovered from him
• Easy Process: There is no elaborate or lengthy registration process for establishing proprietorship firms
• Flexibility: The operational strategies are flexible, which makes it easier to understand and operate them
• Undivided Profits: The owner is the only person to accumulate the profits and further invest it in the market and other ventures

Documents Required for Sole Proprietorship

For sole proprietorship registration, the following documents are required to be submitted:

• Aadhar Card
• PAN Card
• Bank Account Number
• Registered Office Address

How to Start Sole Proprietorship in India?

To start a sole proprietorship in India, applicants must first register the business as a sole proprietorship under the Registrar of Firms under the Government of India. This is only possible when the applicant has a current account. Not only this, but the application form is also required to be submitted deposit along with a minimal registration fee with the respective authority or Registrar of Firms.

Frequently Asked Questions

Does an owner require a separate bank account to register a sole proprietorship firm?

No, the owner can also register for a proprietorship firm from the personal bank account.

Are there chances of others investing in a sole proprietorship? 

Yes, other people can make investments in a proprietorship firm. However, they cannot become a partner or member of the firm.

Is it mandatory to have ownership of the office for business operations?

No, even a rented office can be used for the registration of sole proprietorships. However, the landlord’s rental agreement and a NOC must be submitted as proof.

Is GST registration mandatory for sole proprietorship firm registration?

GST registration is mandatory for a sole proprietorship if the annual turnover is more than Rs. 40 lakh; otherwise is an add-on for your registration application.

How much time does it take to start a proprietorship firm?

It takes 15 days approx. for starting a sole proprietorship firm.

When the shares of a company are offered in the capital markets (stock exchanges) for trade, it is known as an Initial Public Offering or IPO. The shares are commonly offered to institutional and retail investors (i.e., individuals).

For an IPO to take place, a private company is transformed into a public company. Every private company wants to achieve this milestone because it helps them raise capital for various business ventures and provides exit paths to investors. Post the company is listed, its shares are listed on the stock exchange for trading in the stock market. Read on to learn more about IPO in detail.

IPO: Key Points

• A company and its existing shareholders offer fresh and existing shares to the public in exchange for capital, and the company then uses this capital for growth
• Once the company is public, it gives them a good shot at building a brand since IPOs are covered by the media, extensively
• The approval for Initial Public Offering, i.e., listing on stock exchanges, is granted by a regulatory authority and in India, it is the Securities and Exchange Board of India (SEBI)
• It is a perfect opportunity for the company to create wealth for the key stakeholders
• Going public has its benefits for the employees who have ESOPs as well they can publicly trade their shares post exercising
• Fixed price for an IPO is determined based on the number of bids at different price points and the valuation of the Company.

What is the Need for IPO?

• The foremost reason companies want to offer their shares via an IPO is easy to access huge capital easily and instantly
• Another important reason companies want to get publicly listed is that it adds credibility to the company in the industry.
• Approval for IPO by SEBI is granted post thoroughly going through various disclosures by the Company on its business, regulatory and litigation risks etc, thus a final approval speaks volumes of company’s credibility.
• It offers an exit route for private investors who wish to sell off their shares at huge profits
• The company gets valuable leverage for negotiating lower interest rates on loans for future needs

Eligibility Criteria for Filing an IPO

• Below mentioned are the most requirements for filing an IPO:
• The company should have at least existed for three years
• Having a PAN no, Demat is of utmost importance for filing an IPO
• The net worth of the company should be positive
• At least 25% of the company must be owned by the public (i.e., not held by promoters or related parties)

How Does the Initial Public Offering Work?

Before an IPO is approved, it undergoes a long process by the regulatory authority to determine eligibility for filing an IPO. The steps involved are as follows:

1. Filing IPO Application with SEBI: To start the Initial Public Offering process, applying with SEBI along with all the relevant details is necessary, such as:
   • Number of shares to be issued
   • The price set (in case it is fixed price IPO)
   • Previous records of the company
   • Proposed use for the funds to be raised, etc.

2. Appointing an Investment Bank: (also called the Left lead): This person is approached on a contract basis and is responsible for managing the sales of the IPO. They guide the company in raising capital and act as intermediaries between the company and its investors. They are also an intermediary between the Company and SEBI. T
3. Filing of Draft Red Herring Prospectus: The company issues Draft Red Herring Prospectus (RHP) with SEBI containing details about the IPO, the company’s business, its capital structure, risks, regulations, and litigation as per the materiality threshold.
4. Roadshows: Before the IPO is open to the public, companies usually create a buzz in the market by advertising the impending IPO across the country via various presentations to help investors better understand the positive aspects of the particular IPO.
5. Deciding the IPO Price: As the next step, the company initiates the IPO price through Fixed Price IPO or Book Binding offering.
6. Launching the IPO: The company launches the IPO after finalizing the size and brand. It is the responsibility of the lead manager to contact all potential investors.
7. Allotment of Shares: As the last step in the IPO process, shares are allotted to the investors on the basis of the bids made. The allotment process is done through a computerized system, which ensures that the shares are fairly priced.

Note: The IPO is open for subscription by eligible investors only for a specified period. The investment bank arranges the issue’s opening on behalf of the company according to SEBI guidelines.

Also, the process of IPO can be complex and time-consuming, and it may take several months or even years for a company to go public successfully.

Frequently Asked Questions

What does the price band mean in IPO?

The Price Band refers to the lower and upper limit of the share price within which the company decides to offer its shares to the public. The investors can bid equal to or between these lower and upper limits.

Can I apply for multiple IPOs from the same name and company?

No, multiple applications are not accepted by SEBI for IPO.

Who are Investment Bank?

Investment Bank is an independent financial institution appointed by the company going public to manage the IPO on its behalf. They are also called Book Running Lead Managers and are registered with SEBI to act as an intermediary between SEBI and the Company.

What is Red Herring Prospectus?

A red herring is a preliminary prospectus filed by a company in connection with the company’s initial public offering (IPO).

If you are a business or individual in today’s world who is financially active, then it is likely that you have heard of IFSC code. The full form of IFSC code is Indian Financial System Code and is the identifier of the bank and the branch.

Getting the IFSC right is critical when it comes to carrying out online transactions.

Role of IFSC in banking

As a business in today’s economy, you need to be able to facilitate quick payments and offer options for people to pay your business online. The first step in that is to have an online banking option which will enable you to transact as required. If you are new to the world of online banking, then it is essential for you to learn about the options you have for money transfer.

If you want to transfer money from your bank account to another bank account, you have to choose the method that you will use. These include, National Electronic Funds Transfer (NEFT), Real-Time Gross Settlements (RTGS), Immediate Payment Service (IMPS), or United Payment Interfaces (UPI).

The next step in the banking transaction is to collect the banking information of the business you are making payment to. This includes the bank name, bank account number, the name of the account holder, and the IFSC code.

Where to find the IFSC code?

In your business dealings, you may come across instances where one of the parties may not have the IFSC code. Here are some quick tips to help you find the IFSC code.

1. IFSC code is clearly given in the chequebook
2. It can also be found in bank passbook
3. You can also look for the IFSC code in your online banking account
4. Do an internet search of the IFSC code by using the bank name and branch
5. Call the bank customer service and seek their help

What does the IFSC code consist of?

Each bank branch in our country has a unique IFSC code. The first four letters of the 11-digit code are alphabets and indicate the name of the bank. These four letters remain the same for all branches of a particular bank. The fifth digit is zero (0), and the last six digits represent the branch of the bank, and in most cases these are numbers.

Getting the IFSC code right is important to ensure that the transaction goes through as intended and the money transfer happens to the right party. Make sure to check the IFSC code before starting the transfer process or while sharing it with other parties to get payments into your account.

Online banking and IFSC code are inextricably linked together and you should be well-versed on the importance of the same. At EnKash, we help businesses like yours take the smart banking route and enable quicker expense payables and collections. Along with our smart spend management solutions, we also offer a collateral-free credit limit to our customers to enable them to manage their business finances better.

You have heard the term, a happy customer is worth his or her weight in gold and this is true. A customer who is happy with your business will spread that intangible but so valuable ‘word-of-mouth’ publicity that will be more effective than any other method of marketing due to its authenticity. As a startup, your resources are limited and you want your business to grow to the maximum possible without spending too much.

Ensuring that your customers are happy with you can help you do that. But you may argue that you have a good quality product or service and it is reasonably priced, then what else is required? Yes, a quality product or service at reasonable prices is essential but it is only a part of what makes the customer happy. What you need to focus on is the customer experience.

What is customer experience?

Customer experience goes beyond customer service and refers to the experience your customer has with all the touchpoints throughout his or her buying journey and even post that. Today, most customers start their buying journey much before they visit your e-commerce or physical store to make the purchase.

Customers start their buying journey by looking at reviews about your product or listening to other customers’ voices on social media. The next step of the journey could be when they get in touch with your customer-facing teams for more information. Your entire nurturing of them through the buying process, the actual buying itself, the delivery of goods or services, and the post-sale support and services are all factors that affect the customer experience.

A seamless, friendly, and business-like experience is something that all customers want at every stage, though the extent of the importance of these factors varies. Investing in a solid CRM could help your business make the experience seamless for your customers.

Five reasons you should not ignore customer experience

Establishes your brand better

Whether you acknowledge it or not, your business brand perception makes a difference to the way customers approach you. Providing a seamless customer experience establishes your brand persona in the minds of your customers. For instance, a jolly and friendly brand persona is appealing to B2C customers, especially for a younger demographic. In the same way, an efficient but friendly persona is more appealing to the B2B customer segment.

Improves customer lifetime value

Selling your product or service to a customer is not a one-time transaction, but rather a lifetime of value from the customer. A happy customer who has had a good customer experience with your business is likely to go for repeat purchases from you and this means you will be improving the lifetime value of your customers without much additional expense.

Reduces cost of marketing efforts

With an excellent customer experience mechanism in place, you can dramatically reduce your marketing costs. People tend to listen to the stories of other people rather than stories from brands. And when you offer a good customer experience to one customer, he or she is likely to share the story online and such stories are invaluable when it comes to establishing your brand. It is one of the most powerful ways to organically market your brand.

Provides you with invaluable insights

The process of providing a good customer experience across all customer touchpoints will ensure that you collect data points. These data points will provide you with invaluable insights when it comes to improving your product or customer service. For instance, your perception that price is the tipping point for purchase decisions may change when you realize that customers give a lot of value to long-term usage of the product or the quality of services.

It helps with market research

As a business, you are always on the lookout for the next level, whether it is in terms of extending your product lines or exploring new markets. When you have data collected from the entire customer experience that your customers are subjected to, this can provide you insights for your future plans as well.

In conclusion, we can agree that customer experience is not something that startups can ignore. If anything, you need to focus on customer experience to be able to deal with the fierce competition in today’s markets. At EnKash, we believe that customer experience is not only connected to the product or service aspect but also to the payments and collections processes. That is why offer a free AI-enabled spend management platform that helps you manage the financial aspects of your business well.

One Person Company also called OPC is a company formed by a single person who is an Indian Citizen and a resident of India as per the Company’s Act 2013. This single person can be the director and the member as well. Previously, to form a Private Company, it was required to have a minimum of 2 directors and 2 members. 

It was mandatory to have at least 3 directors and 7 members to establish a Public Company. One Person Company’s meaning can also be seen as an example of a ‘One Man Army,’ which led to the recognition of a new way of starting businesses in India that ensures flexibility and hassle-free processes.

Now that we have discussed what a One Person Company means let’s dive deeper. Further, this blog will discuss One Person Company in detail, including its features and benefits, eligibility criteria, required documents, and more.

Important Things to Know about One Person Company

• One Person Company is also known as Single Person Company
• An individual, once registered for One Person Company, cannot incorporate the same again
• The nominee to the memorandum of OPC shall not be eligible to become the nominee for another One Person Company
• The director and the shareholder can be the same person in One Person Company
• One Person Company can have maximum 15 directors
• A minor cannot become a member or a nominee of OPC

One Person Company Features and Benefits

Take a look at the One Person Company’s features and benefits: 

• One Person Company can be registered as a private limited company, only
• Funds are easily accessible to OPC
• Fewer compliances as compared to a private company
• Incorporation of One Person Company in India is easy as it requires minimal documentation
• More remuneration is taken home by the owner as compared to other companies
• It is provided the same legal status as that of a private company
• No annual general meetings are required
• All the shares and investments of the OPC are handed down to the nominee in the event of the death of member
• Foreign funding is accepted unlike in the case of sole proprietorship and partnership
• Complete ownership of the company is with the single person

One Person Company Registration Process 

Follow the steps mentioned below for One Person Person Registration process:

Step 1: Apply for the Digital Signature Certificate (DSC)

Step 2: Apply for Director Identification Number (DIN)

Step 3: Now, select and file for Name Approval Application with Ministry of Corporate Affairs (MCA)

Step 4: Applicant must sign the draft of  Memorandum of Association (MOA) and Articles of Association (AOA)

Step 5: Collect and submit all the required documents along with registration fee and stamp duty

Step 6: Filing and approval of application forms with MCA

Step 7: Obtain  a Certificate of Establishment or Incorporation

One Person Company Eligibility Criteria and Documents Required

Take a look at the eligibility criteria and documents required:

• To form One Person Company, an individual must be a resident, as well as a citizen of India
• He/she can be the member and nominee of the company
• Applicant must submit the following documents to form One Person Company in India:
• Application form and owner’s passport size photographs
• Copy of owner’s updated Aadhaar Card and Voter ID card
• In case the property is rented, owner’s PAN Card, Property papers, and ent agreement must be submitted
• Company’s utility bills, NoC from the landlord or any other document required by the Registrar of Firms

Difference Between One Person Company and Sole Proprietorship

Often there’s confusion between One Person Company and Sole Proprietorship in terms of ownership, liability, and more. Below are the two key differences between the two:

Frequently Asked Questions

Here are a few frequently asked questions relating to One Person Company:

Q. Is Goods & Services Tax  (GST) mandatory for One Person Company?

Yes. Similar to other types of companies in India, GST is also mandatory for One Person Company.

Q. What is the minimum age requirement for starting a One Person Company?

The minimum age required for starting One Person Company is 18 years, and the applicant must be an Indian citizen.

Q. How much capital is needed to start One Person Company?

The maximum capital required to start One Person Company is Rs. 1 lakh. However, the applicant does not need to invest that amount in business.

Q. Is it possible to operate more than 1 One Person Company at the same time?

An applicant cannot run more than one One Person company simultaneously.

If you are a startup or small business, having the right growth strategies is going to make all the difference. A growth strategy is often defined as a long-term vision that you have for the direction of your business, taking into consideration current market conditions and forecasting future challenges. The idea is to pick the right growth strategy to ensure the long-term success of your business.

It is a known fact that small businesses and startups have limited resources but face the same (if not more) challenges as their bigger counterparts do. Getting your growth strategy right in the beginning will clarify your mission, vision, and purpose. This also ensures that your business continues to grow even if there is a change in management, given that your direction has been defined. 

The general goals behind any business include a combination of one or more of the below:

• To introduce a new improved version of an existing product or service in the market
• Realize that there is potential for growth for a particular sector where you have the expertise
• Grab a major share of the market and become a player to be reckoned with
• Value addition to a product that already is in high demand
• Release a completely new product because you see the need for it in the  market

While the above are some excellent reasons to start a new business, it is also important to define your growth strategy.

Growth strategies for your business

Existing market penetration

Often seen as a simplistic but effective growth strategy, this involves improving your share in an existing market. In most cases, it would involve reducing prices to increase sales and, therefore, market share. If you think this is a viable strategy, it is essential to streamline your expenses and improve productivity before doing so. While planning this technology, you should be certain that you can improve revenue with volume sales, as you are reducing your profit margin.

Expand to a new product

Many a time, this strategy becomes a necessity due to the way the product is evolving. For instance, the development of cellular technology made devices like a pager redundant. Manufacturers or sellers of pager devices had to move to sell mobile phones instead. 

Move to a new market

If your current market has no potential to yield more sales or profits, then this strategy comes into place. And by new market, it does not necessarily mean new areas or geographies. It could be something as simple as moving from the wholesale market to retail. For example, a food ingredient manufacturer has gone from selling only to hotels and restaurants directly to selling from supermarkets.

Diversify your product portfolio

This is a case where you are already manufacturing or selling one product but decide to move to another product and that too a new market. One of the best examples is when a jeans manufacturer saw the need to expand their product portfolio to shoes and bags as these seem to be in demand in the new market they have entered. 

Acquire other businesses

Many companies use acquisitions and mergers as an effective growth strategy as they can step into a new market or introduce a new product without going through the teething stages. However, mergers and acquisitions require the company to be rich in funds to do this, which would mean knowing the types of venture capital your business would need.

In conclusion, business growth strategies require a solid foundation of streamlined operations to work well. 

At EnKash, we help you streamline your financial operations with smart technology. As Asia’s 1st and smartest spend management platform, EnKash not only enables you to improve collections, payables, and expense management but also manage aspects like bank reconciliation, audits, etc.

We often hear terms like sustainable technology and assume that this concept only applies to large and established businesses but this is not true. As per the definition of Gartner, sustainable technology refers to a framework of sustainable technological solutions that positively impact the environment, social, and governance (ESG) goals.

However, that is not all. Sustainable technology is supposed to help your business become more profitable in the long run and improve its reputation. With sustainable technology, you invest for the long term and ensure that the results are also sustainable over time. And only some things related to sustainable technology have to be expensive or investment-heavy. There are many reasons that startups should invest in digital technology and other forms of technology.

Why invest in sustainable technology?

We all know sustainable energy technology and assessments have become part of the business environment to meet certain norms. But adopting sustainable technology also offers business benefits (apart from the environmental ones) that make it imperative for startups to invest in sustainable technology.

Cloud computing

One of the ways startups can adopt sustainable technology is by opting for cloud computing. This has several benefits, including enhanced security, access to expert services, and improved scalability and flexibility. As a smaller business, you will also see that your costs are reduced, productivity goes up, and team coordination improves.

Online communication modes

As a small business, it is vital that all your employees are able to contact each other without delay. Online communication modes, used internally and externally not only ensure immediate contact but also bring down the use of paper. For instance, if you are able to send and receive invoices online, the process becomes sustainable with a lesser focus on paper records and better productivity from your teams.

Moving to e-commerce

Today most customers prefer to browse online rather than walk to a store to make their purchases. As a startup with limited resources, one of the ways you can adopt sustainable technology is by moving your sales engine online. Today e-commerce solutions are easy to set up and will help your company save on costs like a store, salespeople at the store, and other overheads.

Leverage IoT

Internet of things is a concept that can be applied to many aspects of your business, right from maintaining quality standards in manufacturing, to improving reaction time for any repairs or services. You can apply IoT in your overall business operations and reduce costs, save on resources, and improve overall quality.

Apart from the above-mentioned aspects, you can also

• Lower the carbon footprint of your business by reducing the commute to work
• Use data and analytics to predict outcomes and take corrective action
• Utilize online payments to reduce the use of paper checks
• Encourage the use of recyclable packing materials

At EnKash, we have been contributing toward sustainable technology solutions with our comprehensive spend management platform. As Asia’s 1st and smartest spend management platform, EnKash enables you to amplify revenues, simplify spend management, and fast-track savings at all levels.

As a startup or small or medium-sized business, you will have your fair share of challenges. Often the answer to most of the challenges you face lies in the adoption of the right technology. However, as a smaller business with limited resources, you may have limited information on what a particular technology can do for your business and how much it costs. 

To help you make the best decision in this regard, we have created a series of growth resources that will guide you in the right direction. In this article, we will look at blockchain technology and the advantages of using it.

What is blockchain technology?

Blockchain is a technology that records information in a way that makes it extremely difficult to modify, hack, or access by cheating the system. Blockchain in essence, forms a digital ledger that records transactions, which then are duplicated and spread across a network of systems within the blockchain.  The blockchain database retains blocks of data, linked together like a chain.

With blockchain, you can create and maintain a secure but decentralized record of secret transactions that have taken place. With blockchain, you can be assured of the fidelity of the data and the security. Blockchain makes it impossible to remove or replace data that has been recorded.

If you are a small business that deals with data that needs to be recorded in a manner that is secure and irreplaceable. 

What are the advantages of blockchain?

The use of blockchain technology offers many benefits, which include:

• It helps ensure that the trust between transacting parties is maintained by mitigating security breach concerns
• The use of blockchain allows the sharing of data between entities that do not know each other as the control does not lie with a single entity
• You can leverage blockchain to reduce costs related to the processing of transactions with the reduction of middlemen, lesser dependence on clearing and settlement entities
• With blockchain, another positive aspect is the speed of transactions without compromising on security
• It also helps improve traceability and the visibility of transactions and this is especially useful for quality control purposes
• The unchangeable nature of data within blockchain reduces the possibility of fraud or misuse
• The use of blockchain allows the individual who owns the data unlimited control making it a preferred technology

How does blockchain help startups?

When it comes to smaller businesses or startups, here are some specific uses that blockchain technology can be put to.

A payment option

The first thing that you need to understand is that blockchain technology can be used to make and receive payments like the digital rupee. And given the way, small businesses in tier 2 and tier 3 cities have issues with the adoption of digital payment methods, this could be a way out. It is often felt that blockchain is linked to cryptocurrency, and while it is, it is also going to be used for protecting transactions that will use the digital rupee. 

Secure and affordable cloud storage

Today’s businesses are no longer limited by geographies and therefore, access to data on the move has become the norm rather than the exception. However, many smaller companies hesitate to move their data to the cloud due to cost and security concerns. However, blockchain will provide you relief in both these aspects by ensuring economical and safe cloud storage. 

Smart contracts

With the use of blockchain, any contract that is stored cannot be manipulated or changed. As a result, contracts become self-verifying and self-enforcing, eliminating the need for a third party like an attorney to be involved in the process. 

A way to raise capital

Though a bit unusual, you can use blockchain technology to raise capital with the use of Initial Token Offerings (TKO). The best aspect of TKOs is that they can be exchanged, traded, or transferred pretty much like shares in a company. 

Whether it is easy-to-use technology for your financial needs or a line of credit, EnKash has it all. As Asia’s 1st and smartest spend management platform, we offer end-to-end financial solutions to help up your game.

Most of us today as individuals or corporate entities have done some form of online transaction or another, especially in urban areas. But only a few of us know what happens behind the scenes when we make an online payment through online transfers, UPI, or via cards. 

While we imagine a complex network of entities working on this behind the scenes, we do not know what actually happens. This is where the role of a payment aggregator becomes critical.

What is a payment aggregator? 

A payment aggregator offers payment-related support to merchants or e-commerce sites by accepting payments that customers make. The payment aggregator then collects the funds that customers have remitted and sends them to merchants after a certain period of time.

A payment aggregator allows different types of payments, which include online payments of all sorts, cash, billing counters, and many more options. In effect, payment aggregators let merchants receive amount transfers without having a merchant account with that bank. 

Are payment aggregators and payment gateways the same?

You will come across many instances where the terms payment gateway (PG) and payment aggregator (PA) are used interchangeably. However, an interesting fact to note is that while payment aggregators can also function as payment gateways, the reverse is not true.

To further clarify, payment aggregators (PA) are the front end of the payments function. PA onboards merchants, collects funds from the customer on behalf of merchants and assimilates them into an escrow account. 

Payment gateways (PG) provide the technology infrastructure that enables payment transactions. Unlike the PA, the PG does not handle the funds at all. In some cases, the PA is also the PG and in others, the PA may work with a third-party PG.

The payment aggregation process is as follows:

• When a customer goes to the checkout and payment stage of the transaction, the PG tokenizes the information and does a fraud verification
• The PA’s acquiring bank then validates the customer details and shares with the related card company using a payment processor
• Once the card company confirms the validity of the details, the details are sent to the issuing bank via the payment processor
• The customer’s bank, which is the issuing bank, checks the details and the availability of the balance. Approval or denial is based on the balance amount
• Information about this follows the reverse route via the payment gateway, which informs the merchant about approval or denial, who updates the customer
• At this time, the bank that is getting the funds requests payment via the payment aggregator from the bank sending the funds once approval is confirmed
• The payment aggregator will then settle the amount to the merchant as per the terms of their agreement

Before the PA gets into the transactional mode, which involves the above steps, it aggregates merchants. The process involves the onboarding of merchants by running background checks and ensuring the legitimacy of the business. One completion of this process, merchants are enabled to accept different types of payment modes without an individual merchant account with a bank or financial institution.

What are the benefits of a payment aggregator?

Easy process: The process of going with a payment aggregator as a sub-merchant is easier and shorter than the lengthy process of applying for a merchant account

Quick approvals: It takes a mere few days to get approvals to accept payments under a payment aggregator

Start immediately: Once the application has been processed, the sub-merchant can start getting payments online, like through cards or online transfers

Attractive fee structure: Most payment aggregators offer a simple fee structure that will help the sub-merchant save on costs

Payment aggregators offer a plethora of benefits, especially to small and medium businesses with relatively low transaction volumes. EnKash, Asia’s 1st and smartest spend management platform has been part of this realm helping businesses with smart fintech solutions. EnKash has also received in-principle approval as a payment aggregator from RBI. Visit our site to learn more.

You would have often heard the term ‘digital economy’ is used a lot and often wondered what it means and how it affects your business. In our business ecosystem, there are many businesses that tend to focus only on internal factors and limit their focus on external factors to those that directly affect them. However, learning what the digital economy in India and the rate at which it is growing will have a direct impact on your business as well.

Let’s start by defining what the digital economy is. Digital economy refers to the way we create and adapt different aspects of our lives (both personal and business-related) using information technology. Digital banking is an excellent example of the digital economy as it affects individuals as well as businesses.

As a growing business, you must harness the power and impact of the digital economy and benefit in all aspects.

Impact of the digital economy on businesses

Let’s take a deeper dive into how you can leverage the digital economy into your business. We will look at the obvious factors as well as some hidden digital economy examples.

Communication

One of the most obvious impacts of the digital economy is on the way we communicate personally and professionally. For startup businesses like yours, the need to wait for information and updates is no longer an issue. You can literally carry the means to communicate in the palm of your hand. The speed with which the digital economy has impacted this aspect of business can be seen in the way free tools to communicate have flooded the market.

Supply chain management

Earlier, managing your supply chain was difficult and restricted to those suppliers and vendors you or your people knew about. But today, you have access to suppliers and vendors from across the country if not the world. You have the option to specify universally applicable quality standards and get them with the relevant certification. 

Networking and sales

Another area where you see the impact of digital India on the Indian economy is of networking and sales. Today, you can simply log in to a business-related social media site like LinkedIn and network with people that are important to your business. In the same way, sales efforts have become more focused on the use of CRM and other means.

Globalization

Where a few years ago, one could not even dream of reaching out to global sources for any information or supplies, today you can simply do that. For example, you can source merchandise for a local event from a vendor across the globe. The growth of the digital economy not only enables you to communicate with the vendor but also make payments within seconds.

Immediacy

One of the biggest digital economy examples is the way immediacy has become the norm rather than the exception for all aspects of a business. Whether it is the verification of the credentials of a stakeholder or the submitting of papers for a  loan, the digital economy enables immediacy. And that too without compromising on security or accuracy.

Price and efficiency

Since the whole world is one big marketplace and there are hardly any boundaries when it comes to critical information, this has had a positive impact on pricing and efficiency. You will find that where it used to take months to get something from another country and cost a fortune, it is now a matter of weeks at the most with competitive pricing.

Reputation-building

For a smaller business or a startup like yours, it is vital to have a recognizable presence and reputation in the market to ensure credibility. The digital economy helps you build a reputation as well by creating a digital persona that can leave insights for the relevant audience to pick up and glean insights from.

Digital Banking and finance

In earlier times, access to finance or funding from banks or even carrying out banking transactions was very much limited. Funds or finance sources were restricted to bigger companies and banking required a lot of paperwork and personal visits to the bank. Today, you have fintech leaders like EnKash, Asia’s 1st and smartest spend management platform, not only offering a collateral-free credit limit but also enabling many financial transactions through their portal.

Here’s how you can leverage the digital economy to enhance the growth of your startup:

• Adopt the best and latest technology to amp up your internal and external communication
• Access free marketing and sales tools to offer a seamless and personalized customer experience to your customers
• Adopt free fintech tools like the spend management platform that EnKash offers to improve financial management
• Adapt your procurement practices to get the best rates and quality for your supplies by widening your supply chain
• Ascertain the security and privacy of the way your information is being used internally and externally

These are a few simple steps to start on your digital journey and you will be able to do more with time as your business thrives due to these steps.