There are several tools in the market that people could use to communicate, such as Email, Skype, Whatsapp, Messenger, HipChat, Slack, etc. How do you pick the right communication tool for your organization? And does it even matter which one you choose? One tool which is considered as the latest and greatest among tech startups is Slack: a chat tool designed for companies. We decided to give Slack a shot, and started using it late last year at Capital Float.
There isn’t one clear solution to choosing a chat engine for office communication, but we recommend companies give their communication channels some serious thought. Slack has features which make it distinctive from other popular tools like Skype and Whatsapp – we won’t go into that here, but do read up for more context. We’ve definitely witnessed a positive impact from using Slack.
Here are a few things a great chat tool like Slack can help you do:
1) Get things done faster
Chat enables real-time communication, and hence collaboration. Discussions can happen in real-time, rather than asynchronously over email threads. Scheduling meeting times becomes much simpler. Email communication reduces, freeing up productive time. Slack fits better into workflows: the mobile app enables people to respond on the go and great keyboard shortcuts on desktop app enable rapid usage. This leads to quicker action being taken resulting in faster decision-making.
2) Organize your information
Conversations on Slack become an archive of internal information. You can create a different “channel” for each group or topical discussion. Channels help keep discussions focused. Slack’s search feature makes it easy to find data across the medium, either by channel or by person. Files shared are compiled into a list. You can ‘star’ things for later and you can pin messages in conversations.
3) Enable people to focus on the right things at the right time
Having a separate company chat tool enables people to keep work and personal communication separate. Work related messages won’t get lost, and people will be less tempted to start replying to personal communication. On the flip side, people can choose when it’s important to tune in or out. Notifications can be customized by channel on Slack and also by time of day. People can schedule notifications to turn off in the evenings, but be notified on an urgent basis if needed. Essentially, people can focus on what they’re doing while at work, but also be engaged and plugged-in when they are with family and friends.
4) Have more control over user access
It is important to keep control of who can access company data – even conversations. You can create private channels which limited users can see, and also control what specific users can access (e.g. a consultant could be made a restricted user). With Slack, you can enable Google App login or other single sign-on (SSO) mechanisms, which has a couple of benefits. Firstly, people can add themselves without creating new accounts, and no one has to ‘add’ contacts. Secondly, it ensures your chat user list is synced to your user management. When someone leaves your company you just have to remove them in one place to ensure they no longer have access to company info.
5) Innovate, connect dots in your business, and have fun
Being a cutting-edge tech company, Slack constantly innovates and also enables innovation. Slack has integrated with many applications, enabling you to play around with a myriad of other tools your business may use. Do you use Zendesk? You could create a channel which gets notifications when a ticket is created. How about Google Hangouts? You could spin up a new Hangout link for a channel. Slack also provides API access which can allow you to create workflows even with your internal systems. Slack’s funky interface and other cool in-built features can prove useful (e.g. a bot that can remind you of stuff) or simply give you inspiration.
While we’re excited about Slack, we realize it isn’t a perfect solution. A few things to keep in mind: Slack may not quite work as well for companies with primarily external-facing communication, since it’s built for intra company conversations. Even if Slack does work for your organization, there are still kinks in the machinery with pertinent features missing from the module. Video/ voice calling can be initiated from Slack (e.g. you can create links for Google Hangouts), but this feature isn’t built into the system. And while Slack has a high uptime and reliable message delivery, for companies in India, Slack isn’t quite optimized for our existing infrastructure. When used over a flaky network, Slack can perform inconsistently while Whatsapp functions adequately.
If you do decide to go down the path of trying something like Slack out for your company (which you should!), be prepared to work initially on getting people to use it. Here are a few tactical ideas to help you get your colleagues on board: have a few champions for the product. Go for grassroots growth, not taking a top-down approach. Create shameless plugs via email with simple instructions. Create channels which people really need to be a part of, otherwise they’re missing out. Be patient, and be positive! You’ll soon see desired results!
Sakshi leads the investor facing product at Capital Float. Before that, she did product at KPCB backed Turo, a p2p car rental marketplace in SF. Her experience is in a mix of tech, design thinking, and strategy. She enjoys building delightful solutions to problems in traditional industries. At Stanford, she built her core foundation in CS, design, and economics. Beyond building products, she tries to sing and simultaneously play the piano, runs in Cubbon Park, and rolls out fresh pasta.
Sakshi is the Senior Product Manager at Capital Float.
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E-commerce in India is growing at a rapid pace. It’s a highly competitive space as it gives opportunities to thousands of small sellers as well as big brands. However, to compete with the larger players, several sellers face the challenge of sufficient capital.
Be it in day-to-day operations, meeting sudden demand rise or to build a brand value, capital is all that you need to keep your venture growing. Loans are one of the most convenient financing options available for most online sellers. This is to expand their business and to manage gaps in cash flow. Be it a big brand or a small seller, financial backing is much needed to grow on e-commerce platforms.
Leading e-commerce companies have tie-ups with many financial institutions such as banks and NBFCs. These partnerships help encourage sellers on e-commerce platforms by providing them finance, mainly in the form of working capital.
Many financial institutions are working in collaboration with e-commerce companies. They have rolled out financing schemes for their online merchants and sellers. Lenders collect the database of sellers from the partnered e-commerce company. They then determine the quantum of loan and the interest rate for the potential borrower. Usually, loan amount varies from Rs 1 lakh to 100 lakhs.
Some lenders offer higher loan amounts depending on the pattern of the business. These e-commerce loans are offered to online sellers at a competitive rate with flexible repayment tenures.
Interest rate offered varies from 11% to 15 %, depending on the various factors and business record of the seller. It involves a quick and easy application process and minimum documentation.
E-commerce loans can be applied online through a simple process of form filling. Approvals are instant in most of the cases. Seller should be registered with the respective e-commerce company to avail the financing scheme. Usually, e-commerce loans are unsecured loans, i.e. loans without any collateral.
Lenders focus on many records related to the seller. Here are some of the Influencing factors based on which lenders determine the quantum of e-commerce loan:
1) Cash Flow Management:
When you are selling products online, it’s important to ensure healthy cash flows. Online sales are quite difficult to predict, especially during the festive season and on big sale days. Failure in your marketing strategy can leave you with a lot of inventory that you could not sell. Seasonalities are common in the online selling business. You may end up facing cash flow problems, which ultimately lead to a financial crunch. Effective management of cash flows is a vital element. Lenders take your cash flow forecast statements into consideration while determining the loan limit.
2) Past Record:
Lenders take into consideration the entire business record of the seller since inception of the enterprise. Some of the documents taken into consideration are:
- Business license,
- Incorporation or registration details
- Timely payment of sales tax etc.
The lender will then check your business plan and the performance since inception. They do this to understand the pattern and size of your business. So, be mindful of maintaining a good business record right from the onset.
It’s important for online business owners to keep their records updated. With good records, you may get a preferential rate on credit.
3) Operational History:
Numbers of years in business counts more in getting the e-commerce loan approved. Generally, most of the financial institutions provide e-commerce loan to online sellers with more than a year of operation. The biggest fear for lenders when providing loans to online sellers is the possibility of default. Hence, stability of business is taken into consideration. Your entrepreneurial experience plays a major role in getting a credit facility for your online business.
4) Return on Sales:
The efficiency of your business is measured basis the return on sales. Lenders consider the ratio of profit and sales to determine the credit limit that they can offer. The loan amount is determined by lenders based on your sales records of the last six months.
5) Type of Business:
A lender decides the percentage of finance that they can offer to an online seller. It depends on the type of business. If your business is fast moving and the frequency of buying such products is more, you are likely to get higher loan.
6) Customer Satisfaction and Review:
Earning customer loyalty and trust is key to being successful in online selling. The first impression of a seller needs to be good for customers to consider purchasing from the seller. Positive customer feedback will ultimately lead to more business. This creates more demand in the online marketplace. Customer review and rating defines your service quality. This helps you in building brand loyalty on the e-commerce platform. High customer satisfaction will ultimately boost your sales. This creates competitive advantage for you in the online marketplace. Lenders consider these elements to evaluate the level of your service quality.
With many e-commerce companies collaborating with financiers, availing credit for online businesses is no longer a challenging task. As lenders partner with e-commerce companies to offer customized finance solutions to e-sellers, more opportunities are available for new entrepreneurs to explore the online selling business.
Raising working capital for an online business is now convenient. It has become easy with the financial assistance from e-commerce companies.
With the help of details like:
- Cash flow forecast,
- Number of years of business experience,
- Sales volume
- Customer satisfaction report, etc.
Financial institutions are able to underwrite e-commerce loans for online sellers.
Oct 24, 2018
The Goods and Services Tax or GST goes live on July 1, 2017, but the process of consolidation and enrolment has already begun. Aiming to standardise indirect taxation in the country as far as goods and services are concerned, the GST will have a multi-fold and direct impact on the workings of businesses, whether large corporate houses or SMEs.
A quick overview of GST will help businesses understand its implications play to its advantage.
GST is a standardisation of the indirect taxation regime across the nation, leading to subsuming of many earlier state and central tax regime laws. Now, goods and services will be taxed under four basic slabs—5%, 12%, 18% or 28%—creating a new norm in indirect taxation. Traditionally, indirect taxes have had a very significant impact on businesses, particularly on their working capital. A number of taxes such as VAT, Service Tax, Excise Tax and others have resulted in huge contributions to the government and in effect, a huge expense for businesses. The hidden nature of indirect taxes, often spreading across multiple stages of the product cycle, has been a significant drain on working capital. Typically, the proportion of indirect taxes is significantly more in tax collections in developing countries, as compared to developed countries, where the share of direct taxation is significantly higher.
With the implementation of the GST, tax buckets are set to change, as also the way of doing business, as the cash outflow and timelines are about to be significantly affected. Working capital is the lifeline of a business, one that keeps it up and running. Especially for SMEs, it helps carry on day-to-day operations, which are critical to business continuity and success.
Here are some key GST changes that will directly affect your business and working capital flows.
- Input tax credit changes: As per the existing taxation system, any tax paid on a business expense that is not directly related to taxable sales is not available as credit. For example, any tax paid on advertising expenses will not be available as credit. GST has a new concept called the “Furtherance of Business” under which it allows credit of any kind of input for business to be “used or intended to be used in the course of or for the furtherance of business”. Now, a businessman can claim credit for tax paid on advertising services as well, giving the businessman significant leeway. The positive outcome is that cost of operations will greatly reduce, and net margins will increase, thereby bettering the working capital flow of the business, and perhaps the line of credit in the future.
- Claims due to inverted duty structure: An inverted duty structure is one where inputs are taxed higher than outputs i.e., raw material excise duty is higher (12.5%) than finished goods (6%), leading to a situation where the excess i.e., 6.5% is unused and gets accumulated. Under the current regime, this excess is not refundable. With the introduction of GST, businesses can now claim the unutilized input tax credit accumulated due to inverted duty structure. This, coupled with a speedy claims process, is a boon to boost the working capital of businesses.
- Timeliness of input tax credit: Currently, the input credit that a businessman avails is not captured in real-time, or in other words, in line with the current tax liability of the supplier. With GST, the input tax credit amount will depend on the compliance level of the supplier, making it compulsory for the supplier to declare the outward supplies along with the tax payment. In a way, you might be responsible for your supplier’s failure to furnish valid returns. This may mean a dip in your cash flows since the input credit tax that you have claimed will be reversed and you will be expected to pay interest too, apart from losing out on the credit. GST will thus mandate businesses to manage their vendors very effectively. Review your current vendors and continuously monitor compliance levels to avoid this concern.
- Advance tax payments: Under the GST regime, tax needs to be paid on advance receipt dates. This is a major change, since so far this was applicable to only service tax under the current system. Now, if an advance is received against supply at a later date, the tax is liable to be paid on the date of advance receipt. The matter becomes worrisome since even though the business pays tax in advance, it cannot be claimed under the bucket of input tax credit immediately. It can be availed only once the goods or services are received.
- Taxation of stock transfers: The current VAT rules do not treat stock transfers as “goods” or “services”. However, with the GST, this changes—stock transfers are included under the category of goods/services and are taxable. This change will directly impact companies’ cash flows because the tax is to be paid on the date of stock transfer, whereas input tax credit can be availed of on the date of stock liquidation. How the working capital holds up in the interim period can be a crucial element to maintaining the working capital levels of the company
- The impact of location in offsetting credit: The prevailing Service Tax regime allows for centralised, pan-India registration of business. As a result, there are no restrictions on availing input tax credit across locations. However, under GST, different state entities need to be registered separately. These will be under varying jurisdictions depending on whether they come under the Central GST Bill, Integrated GST Bill or the Union Territory GST Bill. There are certain restrictions to offset a Central GST tax with an Integrated GST tax and so on. This may create difficulties in offsetting tax input credits across locations. For example, you may not be able to offset tax liabilities of one state branch with another state branch. Your liquidity may not be useful, even though it is available, creating an undesirable working capital situation.
- It is clear that businesses will need to exert more caution as they transition to GST. A detailed scrutiny of current tax commitments and the impact of the four bills depending on operational locations must be done at the outset to ensure healthy levels of working capital. It is also recommended to explore opportunities for availing working capital finance, or options for a line of credit by looking for the latest financing products such as those offered by Capital Float. Our customised, innovative loan offerings include term finance and online seller finance among others to ease working capital woes that SMEs routinely face. Click here for more.
Oct 24, 2018
Lack of adequate funds is one of the main reasons why enterprising individuals with innovative business ideas often struggle in materialising their projects. Even after a venture takes off and begins to grow, it will need extra funds at some point in its growth journey to enhance its operations and pay its suppliers. A business loan in India has been typically procured from banks, but over the past decade, though the number of small and medium enterprises (SMEs) has risen sharply, most of the SMEs who had applied for business loans remain unfinanced at large.
The gap between this demand and supply for loans is gradually being closed by new age FinTech lenders. By providing quick loans without collateral, FinTech companies are helping entrepreneurs in harnessing the full potential of their business ideas. However, the competition in this field continues to be huge, and applications for business finance are still approved based on creditworthiness.
If you are grooming your entrepreneurial venture for more success and plan to apply for business loans online, here are some tips to improve your chances of approval:
1) Create a neat business plan – You must have chalked out a business plan before foraying into a field of your interest, but if there are no formal documents in its support, it is important to prepare them. A formal business plan must include the objective of the project, the way it plans to earn revenue, the development strategy and the marketing methodology. It should also have copies of financial statements and the data on cash flow projections.
If you do not have an official business plan, you may be asked to demonstrate a solid record of revenue generation with at least one year in business. To get the application for an unsecured loan approved, it is important to prove that you are capable of repaying the loan amount without default.
2) Include a documented plan on the intended use of the loan – When you need a loan for business, you must also be able to tell the lender about its exact purpose. Be it a bank or a FinTech company, the lending institution will determine the credibility of your application on the basis of the reason for which you need the loan. While all organisations have their own unique requirements, the most common grounds for loans are business expansion, raw material or inventory purchase, administrative expenses and capital investments. You can also borrow from a digital lender to refinance or pay off old debts.
3) Know what kind of loan will suit your needs – Even after you describe the purpose of your loan, you may be faced with multiple loan categories that you can apply for. It is good to know the details of each – in terms of interest, tenure, payback plans and documents necessary to procure them. Banks and digital lenders often categorise their loan products for the ease of disbursement and management. While some credit products help in quick invoice financing, others may be more beneficial to buy inventory. Consult the lender to borrow profitably.
4) Double-check your cash flow projections – When a business does not have a high credit rating or a strong history of generating revenue, it typically gets saddled with a high interest rate on unsecured loan. It is therefore important to assess your cash flow projections. You must have a good knowledge of your ability to pay back and ensure that you will soon have adequate funds to clear off your debt.
5) Be aware of the risks that lenders assess – Lending institutions in both public and private sector evaluate loan applicants on a scale of risk. If a business is considered a ‘risky borrower’, there is a high chance that its loan may not be approved. The traits that make a business look risky are as follows:
– Very small owner’s equity
– Poor credit history or defaults in payment of previous loans
– Poor revenue earnings
– Very short period in the industry
– Weak accounting system
– Questionable management
6) Leverage your personal creditworthiness – Usually a business is a different entity from its owners. Even a sole proprietorship is a separate legal entity for accounting purposes. However, when it comes to getting a business loan without collateral, even a clean personal credit history can help you in obtaining the amount you seek. The strategy is to make payments on any outstanding personal debt and credit card bills as much as you can afford. This will give your lender more faith in your business and assure them that you are not burdening yourself with unpaid debts. You can personally guarantee for your business loans by proving your ability to repay them.
7) Research extensively for lenders – If you were denied a loan for business by a bank or a traditional lending agency, do not consider it the end of your search for funds. A FinTech company offering unsecured business loans evaluates your creditworthiness using parameters different from those used by banks. If you can successfully prove your expertise in business, FinTech lenders will provide adequate financing for your immediate working capital needs. So, think beyond the conventional platforms and apply for finance online using those documents that demonstrate your ability to pay back in time. Digital lenders also grant short-term loans, the amount being disbursed in a few minutes post the approval of the loan application.
The online lending industry has shown that getting a business loan need not be a frustrating process for SMEs anymore. FinTech companies are willing to grant loans and the application process can be effortless. All you need to do is start preparing early (in lieu of the competition from other similar applicants) and collate the minimum essential documents in support of your application.
At Capital Float, the basic premise is that all applications for getting a business loan will be evaluated with speed, efficiency and favour. The products for business loan in India are custom-fit for SMEs and include Term Finance, Online Seller Finance, Pay Later Finance, Merchant Cash Finance, Supply Chain Finance and Taxi Finance.
Oct 24, 2018