Business Management

Managing Business Development

Effective management is the key to the establishment and growth of the business. The key to successful management is to examine the marketplace environment and create employment and profit opportunities that provide the potential growth and financial viability of the business. Despite the importance of management, this area is often misunderstood and poorly implemented, primarily because people focus on the output rather than the process of management.

Business managers sometimes become absorbed in improving product quality, sometimes ignoring their role vis-a-vis personnel. The focus is on reducing costs and increasing output, while ignoring the long-term benefits of motivating personnel. This short-sighted view tends to increase profits in the short term, but can create a dysfunctional long-term business environment.

In large businesses, planning is essential for developing a firm's potential. However, many small businesses do not recognize the need for long-range plans. Nevertheless, the need for planning is as important in a small business as it is in a large one.

There is a need to manage both the External Environment and the Internal Environment. This article deals with some of the key Internal Environment issues.

1.     Ensure open communications

Effective communications play an integral role in managing and operating any successful business. With open communications changes and their effects on the organization are quickly shared. Your firm then has the time and skills needed to respond to changes and take advantage of evolving opportunities

2.     Balance schedules, stress, and personnel

Without organization and good management, the compressed time schedules associated with modern business can cause stress and make extraordinary demands on people. An effective management structure can reduce stress and channel the productive capacity of employees into business growth and profits.

3.     Define duties and responsibilities

An organization is characterized by the nature and determination of employees' duties and responsibilities. While many organizations use different methods for determining these, it is essential that they be clearly defined. The core of any organization is its people and their functions. Duties, tasks and responsibilities often evolve in an ad hoc manner. A typical firm starts with a few people, with often one person performing most duties. As the firm grows, others are hired to fill specific roles often on a functional basis. Roles that were handled by consultants and specialists outside the firm now are handled internally. As new needs emerge, new roles are developed.

4.     Control conflict

Another key to successful management lies in controlling conflict. Conflict cannot be eliminated from either the business or the interpersonal activities of the enterprise. A measure of the organization's success is the degree to which conflict can be exposed and the energies associated with it, channelled to develop the firm.

5.     Establish authority

The central element of organizational management is authority. Through authority your firm develops the structure necessary to achieve its objectives. The authority that once was conferred by either owning a small business or having a position in the bureaucracy of a larger firm has been replaced by technical competence. Once the owner-manager controlled the entire business, but suppliers, customers, unions and the government have severely limited the ability of the business owner-manager to take independent action. A primary component of authority is the exercise of control within the organization. A thorough system of controls ensures the firm's operation and provides a mechanism for imposing authority.

Successful management is founded on the mastery of a myriad of details. While management schools teach the importance of focusing attention on major issues affecting the business, practical managers realize the major issues are the variety of small aspects that form the business. In an increasingly structured society, inattention to even one minor detail can result in significant disruption of the business or even its failure.

Business Planning

Succession Planning

Succession Planning is actually about putting in place a strategic business plan for your business which allows you outline your business and personal goals and relates directly to your ability as a business owner to extract the maximum amount of value from your business when you exit, to provide for your retirement planning needs.

Planning for the day you leave your business is a valuable investment. Whether you decide to sell up, retire or have to get out of business due to health reasons, it’s important that you spend the time with your family and/or your business partners and plan what you are going to do. A succession or exit plan can help you outline what will happen and who will take over your business when you leave.

A good succession plan enables a smooth transition with less likelihood of disruption to operations. By planning your exit well in advance you can maximise the value of your business and enable it to meet future needs.

Is there a legal document that dictates the terms of the succession? If so, what are the terms? Are there any contracts that need to be modified in the event of the succession, e.g. partnership contract? Are there any new contracts that need to be drawn up?

If you are in a partnership do you have a buy-sell agreement in place? What are the terms? Will the remaining partner(s) buy your partnership share or will it be open to external partners/family members? Does this arrangement apply to all partners in the organisation?

Make sure your succession plan is attainable - set a realistic timetable and measurable milestones along the way and stick to them. As time passes your circumstances may change and having your succession plan up to date will ensure you are always ready in the event you need to leave earlier than anticipated.

Business Management

Make Better Business Decisions

Making a decision is one of the most powerful acts for inspiring confidence in leaders and managers. Yet many bosses are sometimes squeamish about it. Some decide not to decide, while others simply procrastinate. Either way, it's typically a cop-out -- and doesn't exactly encourage inspiration in the ranks.

It can help to learn how to make better decisions. You'll be viewed as a better leader and get better results overall. Here are five tips for making quicker, more calculated decisions:

1.     1. Stop seeking perfection. Many great leaders would prefer a project or report be delivered only 80% complete a few hours early than 100% complete five minutes late. Moral of the story: Don't wait for everything to be perfect. Instead of seeking the impossible, efficient decision makers tend to leap without all the answers.

2.     Create a constructive environment. For successful decision making, make sure you establish an objective, involve stakeholders, hear others opinions, and ask the right questions.

3.     Generate Good Alternatives. This step is still critical to making an effective decision. The more good options you consider the more comprehensive your final decision will be. When you generate alternatives, you force yourself to dig deeper, and look at the problem from different angles. If you use the mindset ‘there must be other solutions out there,' you're more likely to make the best decision possible.

4.     Don't problem solve, decide. A decision can solve a problem, but not every problem can be solved by making a decision. Instead, decision making often relies more on intuition than analysis. Deciding between vendors, for instance, requires examining historical data, references and prices. But the tipping point often rests with your gut. Which feels like the right choice?

 

5.     Communicate Your Decision, and Move to Action! Once you've made your decision, it's important to explain it to those affected by it, and involved in implementing it. Talk about why you chose the alternative you did. The more information you provide about risks and projected benefits, the more likely people are to support the decision.

An organized and systematic decision-making process usually leads to better decisions. Without a well-defined process, you risk making decisions that are based on insufficient information and analysis. Many variables affect the final impact of your decision.

Business Management

Managing Conflict

Conflict in the workplace can have a negative effect on the day-to-day working of your business, or result in a large scale strike or other employment dispute. It can also affect the general health and wellbeing of your employees. Here are a few ideas illustrating how you can manage relationships in your business and minimize conflict between individuals, teams, and larger groups of employees.

1. Signs of conflict

Conflict can arise at work for a number of reasons. For instance, two employees may have a personality clash, an employee may have a grievance against their manager, or a manager feels an employee is underperforming

Conflict can have a negative impact on your employees and this may be demonstrated by:

·        a lack of motivation - fewer people volunteer to take on new tasks or providing input at team meetings

·        unpleasant behaviour - people start to make derogatory remarks towards each other and there are fewer social events organized

·        falling productivity - people are not cooperating with each other

·        increased sick leave and absence of staff 

By spotting signs of conflict early, you have a better chance of: identifying causes, resolving the conflict.

2. Causes of conflict

Every employee has needs and certain expectations at work, and conflict could arise when people feel that these are not being met or are being ignored.

Conflict could be the result of:

·        poor management communication

·        unfair treatment

·        unclear job roles

·        inadequate training

·        poor work environment

·        lack of equal opportunities

·        bullying and harassment

3. Preventing conflict

To minimize and prevent conflict in the workplace, you should try to learn as much as you can about why conflicts occur and develop processes to address them. Common action points that employers should consider are:

·        developing a strategy for managing conflict with managers, employees and your representatives

·        having sound policies and procedures in place

·        explaining plans for change and making employees feel involved

·        listening to and consulting with employees on decision-making

·        rewarding fairly with pay or bonus schemes

·        ensuring work safety

·        ensuring that managers are properly trained 

4. Managing conflict

When a conflict arises you should try to take a calm approach and not react in a challenging way. You should also not ignore the problem and hope that it will go away.

The best way to handle conflict is to face it and have a planned approach. If you have policies or procedures in place, you can use these to determine how you approach the issue or to give your employee an idea of how you will approach addressing the problem. It may help to have an employee representative and/or a senior manager available who can help when employees find it difficult to confront their managers or when you are not able to speak to each employee individually.

Networking

Networking tips

1.     Set goals when attending networking meetings. Are you attending to learn? Make contacts? Or strictly making business connections.

2.     Volunteer. This provides you with greater visibility and you give back to groups that help you. Act as a resource for others to enhance your role.

3.     Clearly articulate your needs. Some people cannot answer a simple question like “How can I help you”?

4.     Ask open-ended questions. In networking group conversations ask questions like who, what, where, how rather than questions that can be answered yes or no. This suggests you are interested in what people have to say.

5.     Follow-up. If you receive referrals follow-up quickly. The way you respond is a reflection on the person providing the referral.

6.     Call new contacts. If you meet someone of interest make a follow-up call to indicate your pleasure in meeting the person and try to set a date to exchange further ideas.

Networking can be a core tactic for both independent professionals and small business owners. Customers are more easily attained this way than through more costly and time consuming cold calling.

 

Business valuation

Business valuation tips

Here are a few tips courtesy of my friend Bill Sivell of VR Windsor

1.     What about that big customer?

Many companies have a single customer or a few large customers that dominate their overall sales. After all, nobody wants to turn down business!  But when it comes time to sell the company, this becomes a huge problem.  Most buyers won’t look at a business whose revenues could drop dramatically after closing from the possible loss of those customers.  Some how, some way, business owners have to find a way to diversify their customer base before they ever decide to sell their business.

2. Timing is everything!

Many business owners seem unable to let go of their company and wait too long. Some lose their entrepreneurial drive and the business starts sliding. Or the market starts to change and the company loses value. To get the maximum price, owners need to do some serious planning to prepare selling the business at its peak.

3.  Special Relationships with Customers

 Special relationships that business owners have developed with customers can be a real issue when selling the business.  A new owner may have a problem continuing that relationship and this could jeopardize the sale of the business.  It is recommended that business owners begin delegating any special relationships with customers to other company employees as soon as possible.

Please visit Bill's web site at www.VRWindsor.com   for additional tips on placing a value on your business.

Business Leadership

Effective Business Leadership

Effective business leadership demands a captain of the ship, not just someone who's standing by the helm. Leadership is active, not passive.

Cool-headed, farseeing, visionary, courageous - whichever adjectives you choose, leadership is a winning combination of personal traits and the ability to think and act as a leader, a person who directs the activities of others for the good of all.

But you can't be a leader just by saying you are. Business leadership, like leadership of any kind, needs to be worked at. Transform yourself into the kind of leader your small business needs with these keys to business leadership.

1.     Vision - Vision is essential to good leadership. Vision provides direction and without direction, there’s not much point to all that planning; your small business will still flail about. Create a Vision Statement for your business. Because it embodies your dreams and your passions, a vision statement will also serve as a leadership vision. Plan where you want your business to be in five years and how you are going to take it there.

2.     Planning - The core of business leadership is being proactive rather than reactive. Sure, leaders are good in crises - but that doesn't mean they sit around letting crises develop. Leadership involves identifying potential problems and solving them before they reach crisis proportions. Good leaders analyze and plan and adapt their plans to new circumstances and opportunities.

3.     Communication - Plans, strategies and results should never be left on paper, collecting dust. “If you are making money, your employees should know about it and be rewarded. This will motivate them and your company will continue to grow. The success of the company isn’t yours alone, it belongs to your team. On the other hand, if the company is facing problems, your employees will be a valuable source of ideas on how to improve things.

4.     Staffing - Businesses are as successful as the people working in it. Great leaders who created successful companies have one thing in common: they surround themselves with talented, courageous, loyal people. Once you have recruited them, invest in their development through training, coaching and fair compensation.

Learning to be a leader isn't easy because it takes a conscious commitment and consistent effort to develop one's business leadership skills. But on the positive side, anyone who is willing to make the effort can become a good leader.

Start-up issues

Small Business Start-up Problems

There are many issues facing small business in the initial launch and successful management of these problems can be critical to the continuing profitability and growth of the business.

1.     Most start-up small businesses cannot afford debt. Money is often scarce and initial costs high. This is common even if there is no debt; debt can add the burden of interest and principle payments. Revenues are usually slower to develop as owners often overestimate their ability to attract customers form existing business.

Borrow little or nothing. Borrowing increases the level of risk and potential loss if the business fails.

2.     Your knowledge base to be successful must be broad. Don’t be misled by friends and associates who have never owned a business. Without a large staff of professional advisors running a business requires knowledge on a lot of topics. Knowledge of advertising and marketing, knowledge of finance and taxes, knowledge of production and operating costs, knowledge of employment laws and government regulations, knowledge of product supply and customer demands.

All businesses face these issues and the ones that survive are operated by owners with the knowledge to understand problems and anticipate potential solutions. The inexperienced often flounder and fail.

 

3.     Advertising by financial and some government agencies directed towards small business tend to create an impression that getting loans or loan guarantees is readily available for those seeking the support. The reality is that neither is true.

Government grants, loans, or loan guarantees are difficult to get approved. Many businesses will not apply, many cannot meet the criteria for approval, and among those who apply few will receive support.

  

4.     Many wishing to start a business do not understand the numbers.

Although many businesses do have a good business plan, all the written prose merely expresses in words the essence of the plan which is the numbers. One does not have to be an accountant to run a business but you must know the numbers. Cash flow, ratios, costs, pricing are essentials that any owner must know and understand completely to operate successfully.

 

5.     Every successful business person must sell.

Owners cannot take the position that they want to own the business but don’t like to sell. Nothing happens in business if a sale does not occur. When a customer is ready to pay for the product or service offered a sale has to take place and that transaction will not take place without some selling effort from the company. Without some effort on the part of the ownership it is unlikely the business will be successful for long.

Procrastinating

Are you guilty of Procrastinating?

Think the time you spend answering e-mail, composing IMs, and trolling Twitter doesn’t have an impact? Think again. Procrastinating in making business decisions generates enormous costs from time wasted and decisions delayed.

There are several approaches that may be considered to eliminate this waste.

1.     Don’t delay. Any time you put something off the problem usually gets bigger leading to more stress and possibly more procrastination.

2.     Reduce the issue to small tasks and work in short bursts to complete each portion. This focused activity for short periods allows you to get the feel for accomplishment. It gets you started.

3.     Learn to prioritize. You may never get caught up with everything you need to do. To be an effective leader you have to prioritize and decide what’s important and manage your time effectively.

4.     Turn off distractions. If necessary turn off email, stop answering the phone; give 100% attention to the task at hand.

5.     Create a daily plan. At the end of each day spend 3-5 minutes setting up the next day’s schedule. It may save an hour the next day while you try to determine where to start your work activity.

6.     Be accountable. Make yourself accountable to someone for what you want to accomplish. This could be an associate, friend, or business mentor. 

A task can more easily be tackled if you visualize it completed. Remember the “Law of Expanded Time”. Work will fill the time available to complete it. By making less time available to complete a task, you will spend less time completing it.

JUST DO IT.

Business expansion

Business expansion

The do’s and don'ts of business expansion

At one time or another, every business goes through a growth spurt and, whether it’s a multi-national corporation or an entrepreneurial enterprise, expansion is a tough process to navigate.

The real danger for any expanding business is that it does so too quickly or in an uncontrolled way. When this happens, cash flow and customer satisfaction are usually the first casualties and, in extreme circumstances, these can result in the demise of a once flourishing business. The trick is therefore to manage the growth process so you reap the benefits in the medium- and long-term.

Plan your expansion

It may seem obvious that any entrepreneur going through an expansion phase should do so with a game-plan, but many businesses expand in reaction to circumstances and don’t draw up a solid plan. Without this roadmap, it’s easy to get lost along the way, making changes to your business that are either too costly or not well thought out.

Don’t over-expand

While planned expansion can take a business to a whole new level, over-expansion is one of the biggest dangers of a growth phase. It’s easy to get carried away in the heat of the moment and to expand beyond the needs and the financial capacity of the business.

As a rule of thumb, plan capacity based on a five-year projection of demand and allow an additional 10% of capacity over and above that for periods of heavy demand or for partial down-time in any part of your business. More than this could be very risky and leave a business with overheads it can’t cope with.



Get professional financial advice

Whatever the nature of your expansion, there are financial implications for the business and it’s always best to seek professional advice. If you need to build or purchase your own premises, for instance, it’s important to speak to a financial institution that has experience in this area.

For plant and equipment, you may need to consider a flexible financing option, either a loan or a combination of a loan and an equity investment. Again, an institution with experience in the field and in your own industry is essential.

Develop a Project Management Schedule for the expansion

Again, this may sound self-evident, but many businesses expand without treating the expansion like a project – one of the most significant it will ever undertake.

When drawing up a project management schedule:

• Identify key deliverables
• Attach dates to these deliverables
• Identify key responsibilities
• Set up a regular review schedule
• Identify procedures for managing non-delivery on any part of the project
• Build in appropriate timing and financial contingencies

Managing the process is as important as planning it and it’s important to commit to this in a formal way, building in the appropriate checks and balances.

Keep your customers informed

Expansion of any kind can cause disruptions in your day-to-day operations and it’s important that your customers know what to expect. Before commencing an expansion, tell them what you’re planning and what the expected completion date is. If possible, tell them what disruptions to expect and how you’re intending to deal with them.

Announce the completion of your expansion

Once the expansion phase is complete, it’s important to let both existing and potential customers know about it. Tell them about the increased capacity of the business and the additional products and services you can offer. Develop a special marketing drive to announce the occasion and send out media releases, especially to the local and regional press.

Celebrate this moment in your business – it’s one of the best marketing opportunities you could ask for.