Week 5 Discussion Comments:

W5D1:

Melinda raised an important issue. Do you want to leverage your business? She suggested investigating some financing options that would bring in cash sooner to allow a more agressive software installation plan. This may be higher risk but prepares the business for more rapid growth by building the long term infrastructure sooner. The rest of us (myself included) seemed to work on the assumption of internal financing. The excuse in my case is that I am happy working as a one-man consulting firm without the need to manage others.

Kathy was reluctant to make an upfront investment in hardware and infrastructure. Badeya also plans to be self-financing by using profits from the early clients to make investments.

If I were starting a business, I would use cloud computing as much as possible and have increased monthly costs in order to avoid upfront investment. However, my business would not grow rapidly and would probably not become big and very profitable and would not meet the requirements of the case that we were given.

W5D2:

An industry focus as suggested by Kathy can be very helpful. I am involved with a company developing sofware in the supply chain management area for hospitals. Each potential client wants to hear about hospital experience and does not care about experience in other industries.

Badeya and Mihir plan to focus on technical fields. In that case, I would develop an expertise in Business Intelligence and focus on being efficient and creative at extracting data and delivering creative business reports from existing SAP systems. I would want to do this better and faster than my competitors.Even in this case, industry knowledge is useful. For example in retailing the ratio of parking spaces to store square feet might be important. And, if I had industry skills, I would know what ratios would be important to my clients in each industry. It is important to focus on what you enjoy when starting a new business. In my case, I would want to focus on something involving databases and algorithms (not User Interface, Photoshop, and Graphics).

Since your firm is starting out small, your first client may cause you to focus on an industry. While working with the first client, you will naturally acquire skills in the client's industry. A second job in that industry could be easier to sell because you can point to industry experience.