Monday, March 31, 2014

Strive for Balance in Your Management Style

Managers facilitate team member’s success and ensure they have the tools to be productive. To maximize effectiveness it may be necessary to review your management style to have a balanced approach with staff.
Here are a few comments that may help you review your style and perhaps attain a more balanced approach in your business.

Use authority without alienation
If you use a heavy hand employees may resent it; a weak approach may allow employees to take advantage. A middle of the road approach may generate the respect needed.

Establish attainable goals
Goals for staff should balance the ambitions you strive to attain for the organization with realism of capabilities. If goals are set too high and are not achieved frustration sets in. If the bar is too low you are not doing enough to optimize performance.

Balance is needed up and down the ladder
Managers have to balance the needs of their own bosses with the needs of employees. It is unproductive to lean too hard on employees to satisfy senior management and equally ineffective to ignore management needs and listening only to employee’s needs. Satisfying the different agendas and achieving the desired balance is the real challenge.

Balance work and personal life
Balancing work and personal needs may be the most important equilibrium of all. Work without rest or recreation can allow fatigue to set in which limits productivity. Everyone should have the down time needed to recharge energy resources to improve overall productivity at work.

I hope these comments provide insight that helps keep the managerial ship from sailing too easily off course.

Thanks, please let me hear your thoughts:

Monday, March 24, 2014

Need to Maximize Cash flow?

In these times of a tight economy and when growth is difficult to sustain it is important to stay on top of the company’s finances and to preserve cash.
Here are ways to maximize cash availability in the business.

1. Track cash flow monthly.
Use a budget to track anticipated cash inflows and outflows so you can assess your situation and react to problems such as the loss of a key sale. This frequent monitoring allows you to delay discretionary payments if necessary.

2. Monitor financial statements.
Review statements monthly and look for issues. Closely review key indicators of the business’ health including a variance in expected gross margin and inventory turnover.

3. Work with customers and suppliers.
You can increase cash flow by offering discounts to early paying good customers and preserving cash by having suppliers help by extending payment terms.

4. Chase the slow payers.
Owners need to be diligent pursuing overdue accounts. If you do not insist on collections you are financing someone else’s business for them.

5. Protect working capital.
If cash is tight don’t pay for long term investments in equipment. It is better to use debt to finance these projects. Debt can be used to re-finance fixed assets to free up capital.

6. Cut waste.
Make every effort to improve productivity, eliminate inefficient equipment and other sources of waste. Engage staff to get involved in developing solutions.

These suggestions may help improve that most vital business tool – cash flow. Agree?

Monday, March 17, 2014

Thinking About Starting a Small Business?

It is common for individuals to leave a structured business organization to set up their own enterprise. Motivations vary from personal or family issues, desire to be independent from direct supervision and sometimes a belief that economic independence is readily achievable.
Achieving success as an entrepreneur in a small business has many challenges and here are a few:

Perhaps the largest issue facing small business and particularly start-ups is finding the cash needed for working capital and funding growth. Banks prefer a minimum of two years of success to approve operating lines and private financers may not accept the risk often associated with new small businesses. This issue needs to be well thought out and planned so whatever the nature of the business it can survive those initial years of operation.

Breaking through the noise and creating demand for your product or service at the start means competing against larger, better financed companies. It is difficult to compete without compromising pricing so new businesses may have to be more strategic and establish more benefits or value in their sales proposition.

Creating awareness
As a new business the first order of business is creating awareness of your company in the marketplace. Since funding may be limited it is critical to maximize the efficiency of marketing dollars and to create a message that quickly attracts those first customers required to start cash flow into the business.

As a small business it is often difficult to attract top talent. First it is difficult, unless well financed, to afford the most qualified employees and potential candidates may be reluctant to join a small company unless it has a track record of success that can ensure a stable environment for the employee.

These are a few of the issues small business face but they can be overcome by being creative and agile in responding to marketplace opportunities.

Let me know what you think:

Sunday, March 9, 2014

Strategic planning vs Strategic thinking

Conventional thinking suggests all businesses should develop strategic plans and business plans to help direct the business and facilitate successful growth.
Strategic planning sometimes impedes strategic thinking and dims real vision. The most successful strategies are visions not plan details.

One option to formal planning is for companies to adapt Strategic Thinking. Fast growing companies need to take advantage of challenges and opportunities and turn their size into an advantage.

Plan informally on the go. All big ideas don’t have to come from formal strategy planning offsite. Quick huddles with key team members to examine key issues are effective.

Challenge. Brainstorm to ask “why not” when faced with the inevitable “that won’t work”. Test whether initial negative positions are really valid.

Make small bets. Large companies with major investments at stake may do exhaustive analysis before acting. Smaller companies can develop and test new potential strategies by making smaller bets by discussing an idea with a customer before the item is built, seeking out a potential supplier that is trustworthy, or discussing the idea with another person with expertise in the area.

These are some options available for strategic planning; the important issue is to make the process fit your organization. Be sure to take some action, sitting on the sidelines while competition takes the business should not be an option.

Let me hear your thoughts.

Monday, March 3, 2014

Improve Business Growth

There is always interest among owners in taking their business to a higher level. It is more than the tired cliché of “work smarter and harder”. As an owner, your ability to think clearly, analyze, and make good decisions are keys to your profitability. Many factors are involved in attaining growth and here are a few thoughts to consider:

1. The Product Must Satisfy a Need
The first principle to consider in selecting any new product or service is to determine if it fills a genuine, existing need that customers have right now. A new product or service must solve a problem of some kind for the customer or make the life or work of the customer better in a cost-effective way.

2. Boost R&D
Times are not going to remain down indefinitely. When the next “up” wave comes around, you want to be ready with new solutions for the market. This is when weaker companies scale back on R&D and smarter companies invest in their future.

3. Cash Flow Is Essential
Especially with a small business, you must hold onto your cash as a drowning man would hold on to a life preserver. Cash is the lifeblood of the business. Cash flow is a critical measure and determining factor of business success. Successful entrepreneurs install careful financial controls and monitor them daily. The basic rule for entrepreneurial success is this: only spend money to earn money. The basic rule for running your business is "If it is not revenue, it is expense!"

4. Maximize Your Marketing
Perhaps one of the most important principles for business growth is strong momentum in sales. This requires an emphasis on marketing that permeates the entire organization. Everybody must think about selling and satisfying customers all day long.
What's the purpose of a business? Some people say that it's to "make a profit." But this isn't correct. The true purpose of a business is to "create and keep a customer." Profits are the result of creating and keeping a sufficient number of customers in a cost-effective way. All emphasis has to be on creating and keeping those customers.

5. Engage your employees and listen. Your employees can be a goldmine of ideas. They know your customers, your market, and your operations. Actively encourage them to come up with ideas to improve revenue generating operations, product innovation, cost cutting measures, etc., and listen to them. You’d be surprised at the level of ideas you’ll generate simply by asking. This also gives your employees a great sense of inclusion.

Please let me know if these thoughts provide some insight into growth opportunities. What do you think?