The 3 Ways to Source Anything

All business processes have multiple components. These components involve products and services which can either be produced by the business itself (i.e. in-house production), sourced from a few specialized entities (i.e. outsourcing) or can be sourced from a large number of outsiders (i.e. crowd-sourcing). The advantages and disadvantages of each are given below:

In-house Production

-          It generally tends to be cheaper as the margin on those products/services are kept inhouse. Also the business has better control over the process and quality and hence is less dependent on outside entities.

-          The downside is that this option has higher fixed costs and the required skills may be missing in the production. Also this option is operationally challenging.

Outsourcing

-          The biggest advantage of this option is lower fixed costs. This ensures that the business is in a better position to handle business cycles. Also outsourcing to specialized entities tends to ensures better quality of products and services.

-          The downside is that the business becomes dependent on outsiders. As a result, gaps in information flow and  communication can emerge.

Crowd-Sourcing

-          This option is highly scalable and provides the business with large and cheap operational capacity.

-          The biggest drawback in this option is that quality control is a big challenge.

All 3 options can be used by any business. The business must assess its priorities and make a decision accordingly.

Marketing Hack – Fake It Till You Make It

Any startup, especially an online one, can use this hack to build trust and credibility. You can try to look bigger than you actually are. If you act like a big deal, customers will treat you as a big deal.

We did this in Beveragewala as well. We were actually a very small startup doing around 10-15 orders a day when thought about doing this. Some of the things we did were as follows.

Professional Packaging – We started using good quality branded packaging to dispatch the goods. This made the look of the packages very professional and coming from a ‘big’ player.

Customer Care – We bought a toll free number which started with the 1800 series rather than having a regular mobile phone as our customer support helpline. Also a professional recording giving users various options to navigate through gave the entire experience a very professional and big player touch. Along with this, we also created multiple email ids, one each for every possible query.

Stationery – All our printed material like flyers, invoices etc. had our branding on it and were well designed and printed on reasonably good quality paper.

Website Interface – We added a lot of sections to our homepage to make the site look very busy. Also the banners and photographs were changed frequently.

Making your startup look as big as some of your competitors can be done with little investment. However, this tends to make an impact which is quite strong in the minds of your customers.

Learn During Lean Periods

A Lean period can be defined as one where there are reduced work opportunities for a business. This may be due to weak market conditions, some policy issue or general sentiment of customers. What should an entrepreneur do during such a period? Learn.

Look Internally: See if you business is running efficiently and can be improved upon. Since you have a lot of time at hand, use this time to improve systems, processes and efficiency in your operations.

Read: Read up on the latest developments in your Industry and know what’s happening all over the world. Try to identify any opportunities to maneuver your business.

Plan: Plan for when the conditions and sentiment becomes optimistic again. Have a solid plan based on your previous experiences. Start building up resources and systems to be able to capitalize on the better periods ahead.