Sunday, November 23, 2014

Business Management

Key Management Skills for Success

To run a successful business you need a diverse range of business management skills. Here are some of the keys areas of successful management.

1. Time Management:
Having time management skills is simply having the ability to recognize and solve time management problems. It is as the old adage says, to never put off for later what can be done right now. You can develop this personal management skill by keeping a calendar and beginning to schedule everything including scheduling free time.

2. Financial Management:
The keys to successful financial management revolve around the ability to create wealth for the business, generate cash, and provide an adequate return on investment for owners of the business.

3. Communication Skills:
Business is all about people regardless of your industry and you will encounter a range of people on a daily basis in the operation of your business from customers and suppliers to employees and business associates. With great communication skills comes the power to influence and encourage others and yourself.

4. Leadership:
A true leader inculcates feelings of confidence, admiration in the followers and a sense of commitment towards the business. A leader influences others to follow him. Leaders need to be flexible, adaptable to change and encourage these qualities in the team members too. Being innovative is important for business growth. Innovation is a skill in itself. Leaders need to be open to new ideas, they need to innovate, bring in positive change as and when needed and progress.

5. Foresight:
This is important in business management. You need to be able to sense trouble ahead of time. You need to be prepared for it and plan accordingly. You need to think ahead of time to be ahead in the industry. An excellent example of a manager and business developer with foresight was Steve Jobs. You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new, he said. He believed in anticipating customer needs in advance to be able to give them products they would start wanting.

Management is about taking the right decisions at the right time and getting them implemented by the right people. Effective business management requires you to have a variety of basic skills. The skills outlined here certainly are not all inclusive. Perhaps, the most important thing you need to have is common sense.

Sunday, November 16, 2014

Business Management

Ways to preserve cash

Conserving cash can create benefits in economic conditions facing business today. When business is in a slow growth pattern, cash is very important and if you don’t have cash when you need it the most operations can be constrained and the business may fail.

Preserving cash may not be easy for those businesses that have been used to having the money to spend at any time. However, when some belt-tightening is necessary, some practical cash preservation methods may be prudent.
Here are a few tips:
Spend wisely. Make sure that purchases are made for need to have not nice to have items. Items should have a focus on producing revenue where possible.
Ensure new employee hiring is necessary. Employee salaries are a significant cash drain so efforts to maximize productivity from current employees should be a first step.
Lease equipment. Leasing vs buying can be an important option since equipment purchasing can be a serious cash drain.
Plan ahead. Make sure you forecast financial activity. A plan outlining expected revenues and expenditures is vital to understanding cash needs. You certainly want no surprises on cash flow activity.
Renegotiate leases. Rent is often a sizeable fixed cost that can be negotiated. Speak with your landlord; there may be an opportunity to downsize or even temporarily obtain rent reductions. Landlords often prefer to accept lower income than losing tenants.
Go to the clouds. If your business is large enough to have in-house servers you are aware of the maintenance costs. If business is increasing this may be a cost effective way to create additional capacity without buying expensive new servers.

Business owners should share their cash flow objectives with other key managers to ensure every opportunity to maximize cash savings is realized.

I hope these thoughts are of value as you manage this key resource. Remember: banks don’t usually give you a second chance to run out of money.

Sunday, November 9, 2014

Business Management

Business Principles to follow for Success

Business owners don’t often think about basic operating principles but here are a few thought starters to ponder on what fundamentals might help drive the business successfully.

1. Measure risk
In early stages you can have an appetite for greater risk as there is lots of time to recover if you misstep. As the business and ownership matures perhaps a more prudent approach to risk taking is appropriate.

2. Maintain control
Take a hands-on approach to accounting and record keeping and take ownership of results. Gaining control of information allows you to end any dubious activities promptly.

3. Communicate, Communicate, Communicate
Whether it is with investors, customers, co-workers, or business partners, you have to over communicate.
Listen carefully, communicate regularly, and try to be clear and concise.

4. Be Respectful
Treat others with the utmost of respect. Regardless of differences, positions, titles, ages, or other types of distinctions, always treat others with professional respect and courtesy. Value every individual for their unique skills and contributions.

5. Build a network
The activity of building a network of contacts within the industry and the local business community will be invaluable in the long term. Attending networking events and community activities can expand awareness of the business and expose potential future consumers to your products or services.

There are many other principles that could be added to the list; these should provide some input to how you operate your business.

Monday, November 3, 2014

Business Management

Why Businesses fail

There are many reasons businesses fail and these have been well documented. This blog will serve as a reminder to some of the more common issues and I hope create additional focus by owners to avoid the same failure.

1. Weak Management
New business owners frequently lack relevant business and management expertise in areas such as finance, selling, production, and managing employees. Unless they recognize what they don't do well, and seek help, business owners may soon face issues of a failing business.

2. Insufficient Capital
A common fatal mistake for many failed businesses is having insufficient operating funds. Business owners underestimate how much money is needed and they are forced to close before they even have had a fair chance to succeed. They also may have an unrealistic expectation of incoming revenues from sales.

3. No long-term plan 
Often there is a focus on short-term profits. It is obvious that there must be profits but this should not be at the expense of building a long term value in the business and understanding the potential of long term customer relations. Building value requires hard work and planning based on good current information and a realistic forecast of the future.

4. Uncontrolled growth
Seem surprising? Too much growth? Over expansion can be fatal if the business does not have the resources to cope with growth including appropriate financing, personnel and capacity to meet demand. Sometimes less is more.

5. Poor Information
The business cannot be managed if owners do not know what is going on. Without accurate financial information the business is flying blind. Don’t expect the accounting firm who does tax filing to keep track of day to day business; that must be handled within the company by the CEO or top finance person.

6. Inefficient operations
Paying too much for rent, labor, and materials weakens the bottom line. The leanest companies are at an advantage and usually are more flexible and adaptable to market change. Not having the tenacity or awareness to negotiate terms that are reflective of today’s economy may leave a company uncompetitive.

The marketplace is rarely forgiving and owners need to eliminate missteps that certainly are avoidable with a little insight into business management.