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June 2012 Edition   

Founder's Monthly Message

Rahmat Ushaksaraei

In a year-long business venture and in close affiliation with my European colleagues, we have been successfully representing the North American producers of the bio Wood Pellet in the European market.

Although I am not expecting that everyone to be fully versed with this product, yet for the sake of our discussion and merely as an example, let's just consider that bio wood pellet is a new product, which is to be introduced in an unfamiliar market.

As part of a realistic business objective, among many, some of the issues that a North American producer of wood pellet needs to consider are:

- The product is produced by multiple sources in North America. Therefore, there is intense local competition.
- The product is to be shipped overseas from a Canadian harbour. Therefore, the producer needs to either have well established infrastructure already in place at a close-by harbour or at least have access to one. In any case, logistics is an issue.
- The product is entering a market, which producers from corners of the globe are exporting to as well. Therefore, there is an overseas competition.
- Unless there is a well established local representation in Europe, a North American producer is entering a market, where even the simplest elements of business culture and interaction are different from North America.
- The end-users are fully aware of the global capacity and control the demand in order to control price of the product. Therefore, a North American producer constantly faces challenges in safeguarding the price and the cash flow resulted by it.
- The market instability of the Eurozone may be viewed as a foreseen concern and added risk.

Considering these issues, a North American producer has two following choices:

Choice 1: Pull totally out of such market and merely service the local market with lower profit.

Choice 2: Embark on this venture, embrace the risk and set goal for higher profit.

In more business terms:

Should a North American producer underestimate the market that it enters into, the risk may be so high to a point that it may lose everything.

Otherwise, since the expensive operation with high overhead consumes assets rapidly, remaining local with low profit will eventually lead to a negative cash flow and be the basis for bankruptcy.

Now, what would you do, if you are a North American producer of bio wood pellet?

So, without entering and discussing the complexity of an international business venture and trade, I would certainly hope that the contents of this article will provide you with the basic insights regarding situating your business with the related market in accordance with the existing business potential.

Rahmat Ushaksaraei

t: 416 - 275 - 5543
w: business support initiative

Intelligence and Emotion are the two inseparable building blocks and attributes of every human being. The revolutionary Human Intelligence Management (HIM) and Human Emotion Realization (HER) methodologies unlock the mystery of human beings and introduce innovative solutions, which surpass the traditional and obsolete methodologies that are being practiced still today.

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If one could grant you three business wishes, what would they be?

1- In an ever evolving and competitive market, what are the primary short/long term objectives and their related challenges in your business?
2- Nationally and/or internationally, how would you reach the potential market and establish business alliance, and how would you maintain the business balance and ensure its competitiveness?
3- Considering the Book Value versus Market Value Reality Check, what is the true value of your business in the market?
4- To exit your business in a foreseen or an unforeseen future, transfer it to someone, or simply limit your scope of involvement, when is the right time to start planning, where would you start from, and what are the critical elements that you would be required to consider?

As part of a mandate in supporting small and mid-size businesses, we are pleased to furnish the key decision maker(s) of a business with an opportunity for a fully subsidized, one-on-one, private and confidential business chat. Interested? click here

on-site seminar & training in place of your business

Disregard of the nature of a business, its three building blocks are People, Process and Bi-directional Information flow between People and Process. Also, these building blocks impact the three fundamentals of CSA (Cash/Finance - Sales/Marketing - Administration) within a business.

So, as key decision maker(s) of a business, have you ever wondered that despite covering all business angles why there are cases, which would get out of control?

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Underestimating and Overestimating Market Condition!

Precise estimation of the market condition in direct relation to the potential of a business is the key factor for securing the success of a business.

In other words, regardless of the type, size and the nature of a business activity, the success rate of the business in a new or existing market will exponentially increase, if and only if the interactions between Market Condition Estimation and Business Potential are fully evaluated, understood and respected and taken advantage of.

To explore this issue further, let's first consider the following terms statically and independently:

- Market Condition Estimation
- Business Potential

Market Condition Estimation: It is comprised of set of coherent and pragmatic market analysis and evaluations, which leads to an educated guess and an overall understanding of specific market. This collective understanding is
otherwise known as market intelligence.

Although it may be self explanatory, the result of such evaluation is merely an estimate of an actual market condition. Specifically, the precision of one's findings is absolutely dependent on the tools and elements, which were employed at the time and the degree of their familiarities with such exercise.

As mentioned in previous occasions, since the process of Market Condition Estimation involves People, who use the necessary Processes to obtain and analyze Information, the entire exercise is bound by the fundamentals of the
People-Process-Information™ phenomenon. Pictorially:
People Process Information Market Condition Estimate
A pragmatic and coherent Market Estimate uses inputs from building blocks of People-Process-Information™

Business Potential: It is the combination of all inherent business abilities blossomed to date in a business and the ones, which yet to be discovered. In essence, Business Potential is collectively the list of business building blocks, which may be shaped in any desired form, in order assist a business in reaching its short and long term objectives.

As one may appreciate, business potential is the combination of the collective Intelligence of a business, which is shaped carefully within organizational interactions. This entity uses the set business protocols and processes and relies on information to function properly. Therefore, once again, the Business Potential follows the basic principles of People-Process-Information™ phenomenon and bound by it. Pictorially:
People Process Information Business Potential
Discovered and unknown Business Potentials are bi-products of perceiving the fundamental elements of People-Process-Information™

Since in the real world a business is a dynamic and living entity, to realize the importance of the two principles of Market Condition Estimation and Business Potential, their interactions are needed to be dynamically evaluated.

In doing so, we may start from considering possible scenarios as follows:

- Market Condition Underestimation: This issue is twofold:

1- Firstly, a case, where market condition for accepting a product or service is underestimated by the business. Naturally, the business will be reluctant in venturing into the market.
2- Secondly, in a totally opposite view, the inherent potential market risk may be underestimated by a business leading to rushing with the introduction of a product or service to the market without considering the possible impacts.

- Market Condition Overestimation:
This issue is twofold:

1- Firstly,
a case, where market potential for accepting a product or service is overestimated by the business. Naturally, the business will be too eager in venturing into the market.
2- Secondly, in a totally opposite view, the inherent potential market risk may be overestimated by a business hindering it from investing on introducing a product or service to the market.

- Business Potential Underestimation: A case, where the inherent potential of a business in introducing a product or service to a specific market is underestimated. Naturally, the business will be reluctant in approaching the market and benefiting form its capabilities.

- Business Potential Overestimation:
A case, where the inherent potential of a business in introducing a product or service to a specific market is overestimated. Naturally, the business will be unrealistically overconfident in its capabilities in penetrating and dominating the market.

Of course, the issue become more interesting, where we combine the Market Condition Estimation with Business Potential. In other words, among many possible combinations, merely as two examples:

Market Condition Overestimation & Business Potential Underestimation: if one overestimate the market condition and underestimate the business potential, a great product or service may falsely miss the greatest window of opportunity in being presented to a market.

Market Condition Underestimation & Business Potential Overestimation: In the case of underestimating the market risk and overestimating a business potential, a business may be too aggressive in introducing a product or service to a market, which may not be ready for it. Inevitably, this case will have sever deteriorating impact on the business.

So, to guarantee success and/or at least to prevent failure, dynamically and realistically, it will be imperative for a business to:

- Realistically Estimate Market Condition
- Truly understand its Potentials
- Correlate Realistic Market Condition Estimation with True Business Potential

Although it may seem easier said than actually done, the key element of success in creating this balance is understanding and appreciating the building blocks of each and every business entity; i.e. People, Process and Information.

In other words, at the same time that these building blocks are to be statically understood and appreciated, in reality, their potentials are needed to be fully appreciated by fully grasping the 
People-Process-Information™ phenomenon.

Now, considering the above simplified discussion about Market Condition Estimation and Business Potential Realization:

- How many new products or services have you introduced to the market in the last year?
- What has been the rate of your business success in introducing a product to a new market or maintaining your competitive edge in the current market?
- How realistic is the Market Condition Estimation for your business?
- How would you measure and analyze the market condition currently?
- How realistic is your understanding of the business potential?
- How would you determine the business potential of your business?
- How relevant and realistic is the correlation between your current Market Condition Estimation and the Business potential?
- How would you measure the effectiveness of the system employed by your business in determining the correct Market Condition Estimate?
- How would you evaluate and measure the practicality of the method adapted by your business in realizing the inherent potential of your business?

If in doubt, contact me directly and let's have a business chat!

People-Process-Information methodology has been developed by Rahmat Ushaksaraei - All Rights Reserved.

About the author: Rahmat Ushaksaraei, is an Accredited Associate of the Institute for Independent Business (IIB), the Founder of GeBTL, Global executive Business & Trade Links, the only global top level executives' business platform, Founder of Bio Wood Pellet, representing the North American producers of the wood pellet in the global market, President of the accrete, The Business Excellence Realization , an author, presenter, Professional Engineer (P.Eng.), Project Management Professional (PMP), renowned expert in Concept, Project, Process, Quality and Communication Management,  business executive and leadership coach to large corporations, business mentor and advisor to small and mid-size businesses, pioneer of Diamond Total Management (DTM)business excellence model and Human Intelligence Management (HIM)and Human Emotion Realization (HER)methodologies and architect of the valuator™ and evaluator™ business evaluation tools for small and mid-size businesses. Rahmat Ushaksaraei may be reached at: Rahmat Ushaksaraei

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