Success Comes When We Make Innovation As a Habit

When I heard the phrase, fast fish eating slow fish, I thought about the importance of how alert an entrepreneur should be to stay afloat in the era of technology obsolescence and evolving economic dynamics. In fact, the earlier scenario where traditional people like us confronted was big fish eating small fish. In politics as well as in business this has been a common phenomenon. We live in an era where fast fish eats slow fish where entrepreneurs who closely follow the trends and respond to them with agility will survive at the expense of slow decision makers.As new challenges are emerging, there is nothing like 100% sure shot ways to make businesses profitable or careers enriching. But when I observed 90% of the start-ups fail due to lack of innovation, I have decided to pen down my views to cultivate the habit of innovation among students or youth who have high aspirations.Innovation Applicable to Families Also!Leave businesses, if one is not innovative one finds it difficult to lead even family lives also. If the wife is a continuous learner, risk taker, and productive she will overtake her husband in finances as well as intellect. This will lead to the inferiority complex in the mind of husband, lack of respect from children, relatives leading to complications in relationships. To avoid this, start from families the habit of innovation. This will give children the right message.Creating Future?

Changes make many perplexed. Market scenario constantly changes and that is one of the reasons the courses students learn suddenly becomes irrelevant. Youth may wonder, what is in store for them? The answer to this question is uncertainty. Then another question may arise, does this mean we give up? I will suggest no, as management guru Peter Drucker has answered this, “The best way to predict future is to create it.” Now, let us consider how we can predict the future. The answer lies in ideating with the help of relevant research.Identify a MissionDr. Kalam further stated, “To succeed in your mission, you must have single-minded devotion to your goal.” You may be a student or an aspiring entrepreneur intending to launch a start-up. For that first of all, you need to ideate with the help of research.Be Thinkers, Research, Make Clear PresentationIdeating doesn’t come easily. For that one has to think. Let us turn to Dr. Kalam who exhorted, “Have an aim in life, continuously acquire knowledge.”Let us stop job seeking, have career trying instead where you put your heart and soul into knowledge and its applications. To realize your career dream, you need to acquire specialized knowledge in your career stream. Not all, but some may ask, how? Suppose your goal is to be a structural engineer, research on the job description of that position. There you can find specialization like making calculations about loads and stresses.If you have a fair knowledge about the excess load that may cause structural failure, you can show your value proposition to your employer. But do this with a case study approach. Case studies are substitutes for ancient storytelling. Therefore, have an eye on case studies that appear in websites. Develop knowledge, observe structures, ask questions, observe failures, and create your niche knowledge and see whether you can add more value to the processes. This is one case you can find a career.To find a career in any domain, the procedure is same. Specialise in one core area that matches your aptitude.Execute Ideas after ConsiderationAwareness, consideration, and conversion – that is the rule in marketing. Whatever you ideate you need to execute or convert into action. If you have a strategy of learning lessons from failure analysis, you can execute a plan with low risk. Today, the recipients of products and services have high expectations. The only way to survive in the market is by offering goods and services of superior quality. Apply the same approach to education also. The thrust here is there should be a mechanism to regularly connect with the businesses and understand niche requirements and develop custom content to make students employable. There should be a constant emphasis on the expectation of quality of product and services. This will make them prepared to meet uncertainties with ease.

Role of InstitutesFinally, product knowledge or specialization alone will not fetch result. Knowledge of marketing alone will bring the desired results. My point is marketing should not be confined to MBA students. Students should get a crash course in marketing, how or why companies advertise and for whom. Education institutes should inform their students clearly that the purpose of a business is to create a customer.Educational institutes should have a policy to encourage students on career-related content development networking with companies and industry thought leaders. They should invite industry thought leaders to conduct seminars on skill requirements to make students ready for the career. Be it arts, science, engineering, or technology; education institutes can create effective executives for India Inc., along with the steps mentioned above.Let Us Together Foster ExcellenceLet me come back to the key theme – fast fish will consume slow fish. You may be a student or an entrepreneur. But you need to understand time is premium and redeeming the time with specialized knowledge, tailored communication, and efficient execution to become fast fish and be relevant to the markets. Finally, remember the advice of Bharat Ratna Dr. Kalam, “Excellence is a continuous process.” Have a strong determination to be successful by remembering the vision of Dr. Kalam.

Car Finance – What You Should Know About Dealer Finance

Car finance has become big business. A huge number of new and used car buyers in the UK are making their vehicle purchase on finance of some sort. It might be in the form of a bank loan, finance from the dealership, leasing, credit card, the trusty ‘Bank of Mum & Dad’, or myriad other forms of finance, but relatively few people actually buy a car with their own cash anymore.

A generation ago, a private car buyer with, say, £8,000 cash to spend would usually have bought a car up to the value of £8,000. Today, that same £8,000 is more likely to be used as a deposit on a car which could be worth many tens of thousands, followed by up to five years of monthly payments.

With various manufacturers and dealers claiming that anywhere between 40% and 87% of car purchases are today being made on finance of some sort, it is not surprising that there are lots of people jumping on the car finance bandwagon to profit from buyers’ desires to have the newest, flashiest car available within their monthly cashflow limits.

The appeal of financing a car is very straightforward; you can buy a car which costs a lot more than you can afford up-front, but can (hopefully) manage in small monthly chunks of cash over a period of time. The problem with car finance is that many buyers don’t realise that they usually end up paying far more than the face value of the car, and they don’t read the fine print of car finance agreements to understand the implications of what they’re signing up for.

For clarification, this author is neither pro- or anti-finance when buying a car. What you must be wary of, however, are the full implications of financing a car – not just when you buy the car, but over the full term of the finance and even afterwards. The industry is heavily regulated in the UK, but a regulator can’t make you read documents carefully or force you to make prudent car finance decisions.

Financing through the dealership

For many people, financing the car through the dealership where you are buying the car is very convenient. There are also often national offers and programs which can make financing the car through the dealer an attractive option.

This blog will focus on the two main types of car finance offered by car dealers for private car buyers: the Hire Purchase (HP) and the Personal Contract Purchase (PCP), with a brief mention of a third, the Lease Purchase (LP). Leasing contracts will be discussed in another blog coming soon.

What is a Hire Purchase?

An HP is quite like a mortgage on your house; you pay a deposit up-front and then pay the rest off over an agreed period (usually 18-60 months). Once you have made your final payment, the car is officially yours. This is the way that car finance has operated for many years, but is now starting to lose favour against the PCP option below.

There are several benefits to a Hire Purchase. It is simple to understand (deposit plus a number of fixed monthly payments), and the buyer can choose the deposit and the term (number of payments) to suit their needs. You can choose a term of up to five years (60 months), which is longer than most other finance options. You can usually cancel the agreement at any time if your circumstances change without massive penalties (although the amount owing may be more than your car is worth early on in the agreement term). Usually you will end up paying less in total with an HP than a PCP if you plan to keep the car after the finance is paid off.

The main disadvantage of an HP compared to a PCP is higher monthly payments, meaning the value of the car you can usually afford is less.

An HP is usually best for buyers who; plan to keep their cars for a long time (ie – longer than the finance term), have a large deposit, or want a simple car finance plan with no sting in the tail at the end of the agreement.

What is a Personal Contract Purchase?

A PCP is often given other names by manufacturer finance companies (eg – BMW Select, Volkswagen Solutions, Toyota Access, etc.), and is very popular but more complicated than an HP. Most new car finance offers advertised these days are PCPs, and usually a dealer will try and push you towards a PCP over an HP because it is more likely to be better for them.

Like the HP above, you pay a deposit and have monthly payments over a term. However, the monthly payments are lower and/or the term is shorter (usually a max. of 48 months), because you are not paying off the whole car. At the end of the term, there is still a large chunk of the finance unpaid. This is usually called a GMFV (Guaranteed Minimum Future Value). The car finance company guarantees that, within certain conditions, the car will be worth at least as much as the remaining finance owed. This gives you three options:

1) Give the car back. You won’t get any money back, but you won’t have to pay out the remainder. This means that you have effectively been renting the car for the whole time.

2) Pay out the remaining amount owed (the GMFV) and keep the car. Given that this amount could be many thousands of pounds, it is not usually a viable option for most people (which is why they were financing the car in the first place), which usually leads to…

3) Part-exchange the car for a new (or newer) one. The dealer will assess your car’s value and take care of the finance payout. If your car is worth more than the GMFV, you can use the difference (equity) as a deposit on your next car.

The PCP is best suited for people who want a new or near-new car and fully intend to change it at the end of the agreement (or possibly even sooner). For a private buyer, it usually works out cheaper than a lease or contract hire finance product. You are not tied into going back to the same manufacturer or dealership for your next car, as any dealer can pay out the finance for your car and conclude the agreement on your behalf. It is also good for buyers who want a more expensive car with a lower cashflow than is usually possible with an HP.

The disadvantage of a PCP is that it tends to lock you into a cycle of changing your car every few years to avoid a large payout at the end of the agreement (the GMFV). Borrowing money to pay out the GMFV and keep the car usually gives you a monthly payment that is very little cheaper than starting again on a new PCP with a new car, so it nearly always sways the owner into replacing it with another car. For this reason, manufacturers and dealers love PCPs because it keeps you coming back every 3 years rather than keeping your car for 5-10 years!

What is a Lease Purchase?

An LP is a bit of a hybrid between an HP and a PCP. You have a deposit and low monthly payments like a PCP, with a large final payment at the end of the agreement. However, unlike a PCP, this final payment (often called a balloon) is not guaranteed. This means that if your car is worth less than the amount owing and you want to sell/part-exchange it, you would have to pay out any difference (called negative equity) before even thinking about paying a deposit on your next car.

Read the fine print

What is absolutely essential for anyone buying a car on finance is to read the contract and consider it carefully before signing anything. Plenty of people make the mistake of buying a car on finance and then end up being unable to make their monthly payments. Given that your finance period may last for the next five years, it is critical that you carefully consider what may happen in your life over those next five years. Many heavily-financed sports cars have had to be returned, often with serious financial consequences for the owners, because of unexpected pregnancies!

As part of purchasing a car on finance, you should consider and discuss all of the various finance options available and make yourself aware of the pros and cons of different car finance products to ensure you are making informed decisions about your money.