What are the resources you need to gather for your business?

What are the types of resources you need to round up for your venture?

You are an entrepreneur managing a start-up or an organisation to navigate it in the direction of sustained profitability and growth. To accomplish the mission of your organization – you will require various physical, financial, human, informational, and other types of resources. Resource Mobilization in a broader sense will mean garnering various types of supports from friends, family, stakeholders in business, your own employees, support infrastructure as also identifying, locating, and procuring certain scarce resources that are essential for your business. Resources can include many things including but not limited to money alone. 

The Basic need: Physical Resources

Physical resources may include land, buildings, plant, machinery & equipments, your workspace, working telephone lines, information systems, furniture items, and other material inventories. Mobilizing physical resources may involve lot of funds and therefore you must exercise caution before committing funds for this section. Many new entrepreneurs are known to have initiated their business ventures from their home, a cart or a stall, garage or a very small place initially.

True Value Creators: Human Resources

Human resources are the most important category of resources because all other resources are managed by people alone! Recruiting, selecting, and appointing competent manpower for your organization is therefore an extremely important resource mobilization activity. As an entrepreneur, you have to meticulously work to create an effective organizational structure. You must create a top layer of strategic managers, a middle management layer of tactical managers, and finally a lower management layer of operational executives, supervisors, and frontline workers. Apart from this, you also must identify a suitable professionals who can work as advisors and experts (like chartered accountants, legal experts, and other functional consultants) for your business.

Staying Updated: Informational Resources

Mobilizing and managing necessary information is also very important for any modern business enterprise. It may include knowledge and information related to technical know-how, manufacturing processes, plant layouts, design inputs and details relating to technology transfer and absorption.  Various Standard Operating Procedures (SOPs), Service Level Agreements (SLAs) and several standardized formats for a host of organizational functions may also fall in this category.

The Inescapable: Financial Resources

Funding is the most important aspect for any start-up or business. An entrepreneur can raise funds from his/her parents, spouse, other family members, relatives, friends, and associates including his/her major suppliers and other stakeholders in business. These are the persons who can directly contribute to the equity share capital of the firm/company and/or provide unsecured loans (quasi equity) to help the entrepreneur in his/her efforts to build the required level of equity. 

Having raised necessary equity, the entrepreneur can always approach a development financial institution (DFI) or some bank or term lending institution for raising necessary term loan for financing the fixed assets. 

For supporting the normal day to day operations of business, the entrepreneur can always approach any commercial bank and negotiate a suitable cash credit limit (working capital) for financing of the current assets.

As an entrepreneur – you can also approach several other resources to meet your funding needs – such sources include private investors, private equity firms, venture capital funding, angel investors, and grants and subsidies from the Government. You can always get details about these sources of funding from the internet and other places. It is however important that you review your specific circumstances before you decide on any of these options. 

There are differrent methods to acquire financial resources

Venture funding is not suitable for all entrepreneurs. Venture capitalists are looking for high technology proposals with high-growth potential in sectors like information technology, communications, and biotechnology. Venture capitalists take an equity position in the company to help it carry out a promising but higher risk project. This involves giving up some ownership or equity in your business to an external party.

Angels are high net worth individuals or senior executives who invest directly in small firms owned by others. They are often specialists in their own field who not only contribute their experience and network of contacts but also their technical and/or management knowledge. In turn for risking their money, they reserve the right to supervise the company’s management practices. In concrete terms, this often involves a seat on the board of directors and an assurance of transparency. Angels tend to keep a low profile.

You may also take benefit of various grants and subsidies provided to entrepreneurs by the Government. The Government announces such grants and subsidies to start-ups and businesses from time to time. The purpose of these grants and subsidies is to help you meet expenses towards research and development, marketing, salaries, equipment, and productivity improvement. A grant is a sum of money conditionally given to your business that you do not have to repay. However, you are bound legally to use it under the terms of the grant, or otherwise you may be asked to repay it. 

The Replenishment: Educational Resources

The greatest thing that an entrepreneur can do when establishing a new business is to gain as much educa­tion as possible. By understanding his/her competition and gaining an in-depth knowledge of his/her industry, he/she will be better pre­pared to make smarter decisions regarding the direction of his/her firm. Educational resources can be found through professional trade associations, local chambers of commerce, and other professional forums.

Connecting with Stakeholders: Relational Resources

These consist of aspects like customer relationships, supplier relationships, trademarks and trade names, which have value only by virtue of customer relationships, licenses, and franchises. The value of the relationships a business maintains with its customers and suppliers is also referred as goodwill, but often poorly booked in corporate accounts, because of accounting rules. HIPOs, as they are called, high potential employees are the ones who have exceptional potential, ability, and aspiration for successive leadership positions.

Not only customers, but supplier relations are also important.

How does one begin to accomplish this?

As a smart entrepreneur – you must work out a comprehensive plan/strategy for resources mobilization. You must ensure that all necessary inputs for operations are available at the workplace as and when you require these. 

Apart from the major plant, machinery and equipment items, other inputs like raw materials, packaging materials, maintenance materials, various tools and measuring instruments and a host of informational inputs like drawings, blueprints, standard operating procedures, and others will be necessary. 

All such inputs must be procured in right quantity, right quality, at the right place, and at right time. It is also necessary that we make right use of acquired resources thus ensuring optimum utilization of the same.

Proper supplier data base should be created, and suppliers should be evaluated based on pre-determined criteria (decided based on the consensus reached in a multi-disciplinary meeting of executives). This will ensure that we procure our production inputs from reputed, resourceful, and tested suppliers with whom we have established relationships. 

Notwithstanding the fact that we are dealing with known suppliers, we must obtain competitive bids from interested suppliers and base our purchase decision on a pre-determined decision matrix. This will make sure that we are not paying unreasonable prices to the selected suppliers. 

We should also do hard negotiation with suppliers to get reasonable (and at times favourable) terms on obtaining suitable warrantees, guarantees, free spares, after sales service, and/or several other facilities which may be specific to our case.

Before I sign off — things you must remember!

  • Resource mobilization efforts should align with your organizational mission, objectives, and strategic plan. 
  • Resource mobilization is also about the needs of your (prospective) funder, and your clients.
  • Resource mobilization is often wrongly considered as fundraising. In fact, fundraising is a component of the resource mobilization.
  • Your strategic plan is the anchor of your resource mobilization strategy – in which your organization’s programs, structure and systems, as well as financials are reviewed, and new business opportunities are identified.
  • Successful resource mobilization requires a lot of work and takes a lot of time.
  • If your organization needs additional revenue one year from now, start today!
  • Your organizational performance today impacts your ability to generate resources tomorrow.
  • You must establish and maintain organizational credibility and reputation.

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