Doing Business In Asia: Don’t Reinvent The Wheel, Model What Works

One successful business attracting the admiration of people in Southeast Asia, if not the whole of Asia, may be Air Asia, the no-frills budget airlines revolutionsing air travel for millions in this region. Founder and former accountant Tony Fernandes went on a trip to the UK, came across the concept of budget airlines, and considered it, he says, a “no brainer”.

And so he started Air Asia, by providing a seat on a plane for any person at minimal prices, and basing the company in Malaysia, between China and India and Indonesia (3 of the 4 most populous nations on this planet.

As the slogan of his budget airlines puts it, “Now Everyone Can Fly”. More importantly for the entrepeneurs’ perspective, by always selling enough tickets to his planes and acquiring his first plane for a dollar from Malaysian Airlines, he says Air Asia has made money from day one.

Air Asia may serve as a template for anyone wishing to do business in this region. A number of lessons can be drawn from this.

In particular, Air Asia is one of many examples one may notice that simply re-models the product or service of another company in the likes of the UK or the US, and brings it to the Asian region where such a business has yet to be provided. Air Asia brought in no-frills aviation personnel with the relevant experience from Europe, and let them provide the expertise and details for effecting what is a proven formula somewhere else.

As some may put it, don’t reinvent the wheel.

That is not to say quite a bit of adaption needs to be done in the local market. Tony himself has said he had to go all the way to the Prime Minister of Malaysia of the day to lobby for liberalisation of aviation routes away from the national carrier, Malaysia Airlines. The right destinations still had to be chosen and Air Asia had to concede control of its Indonesia and Thailand subsidiaries to Indonesian and Thai nationals respectively to obtain landing rights in these countries and to comply with local laws. Not the kind of issues prevalent in Europe perhaps.

But besides admiring Air Asia as vibrant business that is not only making money but is changing the way people lead their lives in this region, the lesson to learn regarding doing business in this region may simply be this: don’t reinvent the wheel, just use what works. A degree of adaptation may be required to make the business work in its local environment, but essentially someone has made most of the mistakes for you somewhere else, and human needs and wants worldwide are all the same.

Air Asia may win your admiration, but it could even teach one a lesson or two about making your business work.

The Business Of Factoring & How It Works

Factoring, also known as accounts receivable factoring, is a business term used to describe a method in which companies sell their outstanding receivable invoices in order to gain immediate cash for their business. When a company sells a product or service, an invoice is created stating the amount due and the number of days in which the invoice must be paid. This invoice instantly becomes a part of accounts receivable, which is money that is owed to a business. After the invoice is generated, it must be sent to the customer and the business must wait for the specified amount of time before that invoice is paid. Often times, for reasons of misfortune or lack of attention, a debt may go unpaid and extend past the due date. This presents a problem for the business, which is awaiting payment, in that it interferes with the cash flow when a debt is not collected. This is especially true of new, or struggling, businesses.

The process of factoring works when an institution purchases the invoice for an amount that is somewhat less than the face value of the debt. This amount can be anywhere between 70-90%. The factoring company then proceeds to collect the full amount due for the invoice, which is then delivered to the original business less a factoring fee.

If a business offers credit terms as part of their sales, factoring is one way of eliminating cash flow problems. Many businesses who use factoring receive their money, from the sale of their invoices, within 24 to 48 hours. This unique approach also offers a company with the ability to extend competitive credit terms to their best customers and not have to worry about waiting for the credit payments. By offering attractive credit terms, more customers will be drawn to a business. Most businesses compete in pricing, but a company is much more appealing if they offer financing options direct to their buyers. Many consumers do not have the funds to pay for items upfront, especially if a business markets more expensive sales, but a customer may be able to agree on delayed payments. Therefore, a business offering such a deal would sell more inventory than a company who requires total payment upfront.

It’s important to realize that factoring is not a loan or a debt. In addition, unlike bank loans, collateral is not required. It’s simply the sale of invoices, on which people owe money, to another business for a slightly smaller percentage than the total due. The original business gets immediate cash and, for a fee, the factoring company collects the face value of the debt.

Many businesses, who extend credit, opt for factoring in order to avoid the hassle of trying to collect money. In addition, it costs more to have a billing department who is responsible for creating invoices every month. By factoring, a business eliminates their need for a billing department and saves money on the hassle of attempting to collect debts.

The cash generated from factoring will allow a business to purchase new equipment, pay existing debts, increase marketing efforts, improve planning, process new credit approvals, improve customer relations and save money on accounting procedures.

Business Card Design That Works

There are a lot of business cards being circulated by countless businesses nowadays, but the truth is most people only keep a few. The main reason is that the business card does nothing to make the people who have them want to know more about the business. There are cards that utilize loud designs that make the contact information hardly noticeable. There are letter heads which are printed in unreadable fonts and sizes, or a paper material that is way too scented or way too glossy.

Business cards have the ability to speak so much about a business. This is the reason why the design of a business card is as essential as the distribution of the cards to a greater number of people. There are many business card printing companies that are able to come up with professionally designed cards best suited to your company or business. Whether online or offline, these printing and design experts can be of great help in determining which design, color, or lay out will give your business the best possible exposure it can generate.

Although there are businesses, especially small or start-up businesses who would rather print their own business cards to save on costs, choosing a professional business card lay-out designer and printing company is a wiser option. There are in fact many ways to optimize a business card. The products or services can be enumerated on the face of the card for the clients to have a clearer grasp of what the business can offer. Unfortunately there are cards that fail to include other services which may add to the profitability of the business by increasing sales.

Furthermore, in business cards, the business logo and business name must be printed legibly on them. It is not wise to fill your card with so much information and other designs, and barely leaving enough space for your company name and logo. A business card is not a company resume, and as much as information on the company is essential, there is no sense in overdoing it.

Finally, the other side of the business card can be utilized for a number of purposes. The location map of the business may be printed, or a particular product best seller or service can be highlighted. Or the card can have a folded design so as to have more space for additional information. Business cards can do so much for any business, when optimized for exposure and sales purposes.