How Does Economics helps me as an individual

I am a passionate traveller, and love photography! At this moment, there are two things in my mind; to buy a bike or to a purchase a telephoto lens. But what stops me from doing as I wish, is my low account balance that can accommodate only one of the either.

Having exhausted my resources of  two year work saving, into buying a laptop, to funding my education at NID, it is now a growing concern for me to wonder how I can facilitate my demands, given the limited resources at hand.

Questions abrupt in my mind, debating my purchasing power. The risk taker in me encourages me to take loan from my parents to buy a bike, and repay as an when I start earning. But significant petrol consumption, burdened with rising petrol prices, to polluting the environment are some factors that hinder this decision. On the other hand, the economist in me, argues, is there a need for a bike when my travelling is only limited to weekends? is it a economically viable decision to invest in a machine costing Rs. 55,000 + petrol expenses when my usage shall only be limited, or when I have other modes of cheaper transports available, or the fact that I usually travel with friends of bigger groups. Hence, I don’t own a bike yet!

On the other hand, depreciating account balance is another factor troubling me these days, and I am trying to find alternatives to fund my education. Since photography is another passion, investing in a good telephoto lens can possibly make sense. I can sell some of the images that I click and earn some money. This may in turn be favourable decision and can be called as an asset to me. Buying a lens can also be termed as my ” opportunity cost“.

What helped me make this decision is purely economics. The fact that regular production of lens makes it fairly affordable, spread distribution makes it easily available & my consumptionis met at a system level.

Having worked for two years, my foremost concern would be taxes and how were they deducted. How could I maximize on my savings on my salary. Understanding different taxing structures at different organizations is another learning. Since I aspire to be an entrepreneur I have to be highly sensitive towards economic policies that can benefit my business.


HOW DOES ECONOMICS HELP ME AS AN ENTREPRENEUR?

As said by Schumpeter ,entrepreneurs undertake business ventures and economic activity involving new combinations of factors of production which raise the level of productivity resulting in better utilization of resources.

As a budding entrepreneur , one must foremost understand the product/service that he/she is offering to the market. He/she should have a clear idea as to WHO is his/her ” target” customers. Which strata of income do they fall in? what are their needs & demands? who is providing for their needs?

It is very important to judge the economic profitability before entering in a venture. this can happen by understanding the law of demand and supply.

I would like to illustrate an example of one of the top 10 India’s entrepreneur, Mr. Tulsi R Tanti. He is the Chairman of “Suzlon Energy”, producer & supplier of wind turbines & other complete end-to-end wind power solution. Mr Tanti, after completing his mechanical engineering joined his family business of cold storage, and within a span of 2 yrs made profit of 22%, by cutting power consumption.  he found the prospects stunted due to infrastructural bottlenecks. The biggest of them all was the cost and unavailability of power.Tanti, understood that in coming future, there would be tremendous demand for power & would become extremely expensive as the supply was depleting in huge amounts every yr. he started investing in a more sustainable for of energy- Wind! He began in 1995 with 20 employees, serving to 8 states in India and has now reached to 15,000 employees and in providing solutions to 21 countries with headquarters in Pune, India. He took inspiration from other entrepreneur giants like ‘reliance’, for their think big & execute fast strategy! Tata, as they always contribute to society & country’s economy and Infosys as they have created opportunity for India’s youth & shared wealth among them.Hence today, Suzlon is ranked world’s 3rd best wind energy company & has won many awards on sustainability!

For a design entrepreneur, like me, other than knowing about segment positioning of the product/service, it is imperative that I should be aware of pricing it accordingly!

Understanding the economic conditions of the country, as well as following free market prevalent in our economy, I have to be sensitive to the price my competitor is providing.

But unfortunately, price of design is still debatable. How do you rate good design from bad design? How to measure intellectual cost or the cost of handicraft? yet there is a considerable difference in the price tag of a designer product and a locally available product. here adding marginal costs, like my cost of education in a reputed institution for 2 yrs can come to account, technology cost, marketing costs, brand identity, etc comes into account. Being a start-up, I have to create a long term budget of how I plan to distribute my economic resources and more importantly how I can reap benefits from production costs.
Since I plan to venture into a business relating to craft & sustainability, I need to be aware about government policies.
the government provides grants & subsidies to new start ups, encouraging entrepreneurship. As an entrepreneur, I should make the most of these benefits.

In near future, I see myself heading a design firm, with employees working for me. In order to keep ourselves updated with the world as well as have team spirit within the firm, to strive for better goals; I have to oversee political administration.

I have to maintain cordial relations while dealing with bureaucracies, managing human relations within firms, managing customer supplier relationships, financial & production management.

in order to keep ahead of times, I will have to invest in technology, acquiring and overseeing assembly of factory, upgrading product & product quality & introduction of new production techniques & products.

And lastly, since I will bring in new products/ services to the economy, it is my responsibility to facilitate perception of market opportunities & marketing the product and responding to competition.

 
 "entrepreneurial talents must come from within suited to our culture & environment."


					
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s