Business Growth

Business Growth In Slow Economies

It can be difficult to grow a business anytime but properly managed small businesses can thrive in even poor economies. Here are steps to consider when facing challenging markets:

1.     Manage costs: To stay ahead of the curve businesses have to cut costs with the precision of a surgeon. Cut too little and the company’s survival may not be assured; cut too much and the business may jeopardize the quality service offered to customers. It is important when household spending is reduced to offer special inducements that get people to part with their cash.

2.     Broaden the customer base: The business is at risk if too much dependence is placed on a few customers who may have financial difficulties. Spread the risk and reliance by having as large a base of stable customers as possible. At the same time give important customers special attention, nurture relationships that will build loyalty.

3.     Refine Marketing: Refine key selling points and use new internet based marketing to attract a new generation of customers. Take full advantage of free social networking; Twitter and Facebook may offer new free ways to advertise. Combine this with other direct marketing approached to reach customers.

4.     Manage assets and profits: many businesses focus on sales, expenses, and margins and often ignore assets, particularly cash flow. Profits and hence net worth can be increased through cash flow management. Prudent management of needs with both short and long term sourcing of funds with a plan developed in conjunction with a banker can be a strong tactic to ensure growth.

5.     Maintain flexibility: businesses must stay alert and respond quickly to market changes. Pay attention to market feedback and analyse facts. Adapt new systems and use current technologies to facilitate response.

Finding the optimum balance between sales and expenditure will guarantee growth in austere times and enable business to thrive when the going gets good. After all, the only certainty is change.

Business Compensation

Creative compensation options

Developing compensation strategy is straightforward but it is sometimes important to be creative when rewarding long-term effective employees. At times established ceilings may prevent providing salary increases to reward high level achievement.

Here are a few options that might be used to continue to motivate these high achievers:

1.    1. Paid time off: extra days off for personal projects, add time to years of service, or just hours away from work to help children in school or to volunteer in community service.

2.     2.Professional development: this is an individual reward that reinforces the company’s interest in the personal growth of an employee.

3.    3. Recognition: Try to publically recognize achievement; treat the employee to lunch or have a department party to recognize the employee.

4.    4.  Provide technology: buy the employee a new laptop computer or cell phone. Perhaps add a second phone for a spouse since they often play a significant role in the success of an employee.

5.     5. Bonus: pay a specific bonus or incentive that relates to achievement for a specific project or completion of a set of objectives.

6.    6.  Stock: An important method for rewarding high achieving long term employees is to offer stock options that allow for participation in the overall success and profitability of the company.

In addition, the company can provide enhanced benefit programs, increased retirement benefits, extra perks such as use of company vehicles, club memberships, flex hours or the ability at times to work from a home office.

The organization is going to reap the benefits of rewarding highly effective employees and in addition there is a likelihood of the business retaining key employees or attracting key new employees if it has a reputation of strong, competitive and creative compensation planning.

Business Planning

STRATEGIC PLANNING

Let’s review a few key factors on Strategic Planning that help small business owners determine the value of this process.

1. WHAT IS IT? 

-         A planning tool for management to formulate high-level business strategy.

-        Strategic Planning provides the foundation for the development of a more detailed Business Plan.

-        Strategic Planning is top down: Strategic – Tactical – Operational.

2. WHY DO STRATEGIC PLANNING? 

-        To define the precise mission of the firm.

-        To measure the competitive environment.

-        To prioritize external opportunities and assess potential threats.

-        To help manage growth.

-        To focus on key objectives.

-        To satisfy succession planning needs.

-        To focus on internal strengths and overcome weaknesses.

-        To formulate strategy to maintain a competitive position.

3. WHEN TO DO STRATEGIC PLANNING

-        When the business needs to establish guidelines for a new or updating of a Business Plan.

-        When a review is needed to maximize resource utilization.

-        When the business needs to prioritize growth options.

4.    What are the goals for Strategic Planning

-        Quantify objectives for the business.

-        Establish indicators of achievement.

-        Develop an implementation plan.

-        Assign responsibilities and accountability.

-        Identify resource requirement for plan achievement – financial, personnel, equipment, facility, products.

    

Business Management

Keys to success

Let’s look at some key factors that contribute to business success. The role management plays is critical and management must focus on and achieve the goals and objectives set for the business. This is accomplished with a number of key management functions.

1.     Planning:

The key to your success is having a business plan in place. Whether you're about to launch a start-up or you've been in business for years, your business' direction is guided by your business plan. To begin the planning process, you'll need to do some critical analysis; business planning is about realistically forecasting where your business is going.

2.     Organizing:

Organizational design is the way in which you set up your company (employees, information and technologies) to best meet your business objectives. How you structure your business has a major impact on how well it functions. There is no single best organizational design for all small businesses. Each business structure is as unique as the organization it represents.

3.     Leadership:

A leader is someone who has a vision, a drive, and a commitment to achieve beyond that vision. The leader must then also have the skillset to enlist the support of others in the organization to achieve the stated goals.

4.     Controlling:

Many small businesses lack proper control systems because they are focused on production or service issues. 

Having a control system allows you to monitor measure and adjust your organisation’s performance, whether it is sales, production capabilities, or general efficiencies. In other words, the purpose of business control is to identify unfavourable business performance so appropriate actions can be undertaken.

5.     Communicating:

Communication is essence of management. The basic functions of management as shown, planning, organizing, leading, controlling cannot be performed well without effective communication. Business communication involves constant flow of information and receipt of feedback. This is essential for the growth and success of the organization.

In the end, management will determine the success or failure of a business. Success surely cannot be attained without decent management skills.