Sunday, April 22, 2018

Business Management

Challenges Facing Small Business


There are many problems that are encountered by business owners throughout the course of managing their business. All entrepreneurs must be prepared for solving problems that come their way. However, creating a startup is not an easy task.
New entrepreneurs are usually not prepared for the problems coming their way. The first thing to do is to understand that problems are an everyday part of every business and then face each problem with determination and a proper solution.

Here are some common faced problems in new businesses and their solutions.

1. Financing
Money is known to be one of the major causes of problems that can lead business to failure. For a new business, the biggest mistake is expecting instant profit. Young and eager entrepreneurs start up a business with little money, assuming they will earn big and then invest that money again in their business. It is significant to understand that you cannot get an instant profit at the start of your business. Before starting a business, ensure that you have enough money to sustain you at least up to two years. Start slowly and patiently.

2. Lack of Skills/Knowledge
This is one of the top mistakes made by entrepreneurs. It is important that you have ample knowledge about the industry you are entering, your competitors, your target market, current trends, as well as financial know-how. You must possess the skills needed to start up a new business. If you are not prepared, educate yourself. Do proper research, ask other business owners, read relevant books and websites. You may end up with a huge loss if you start your business without having the required knowledge and skills.

3. Lack of Planning/Direction
This problem prevails when owners do not develop a thorough and detailed business plan. Many entrepreneurs are so excited about setting up their business that they fail to prepare a proper business plan. It helps in focusing on the goal and mission of the business. It determines the financial structure, market research and analysis of the competition. A business plan is the roadmap to follow.

4. Innovation
Unfortunately, there are many new startup companies that stick to the age old book of rules. They don’t try to create an innovative culture. People get accustomed to the work culture and they don’t think outside the box. Owners often stay away from change and resist whatever changes that could improve operations. The best thing to do is to be open to innovation. When bringing a change, ensure that all your employees are prepared for it. Discuss it with them, tell them how important it is to be innovative, and how beneficial it will be.

5. Attracting New Customers
For a new business, it is difficult to attract prospects and retain customers. With a small marketing budget, new entrepreneurs are unable to reach out to a wider audience. Potential customers are usually hesitant to using a new supplier. They prefer going for companies that have experience and a large customer following. However, the good news is big companies charge more. There are many clients and customers who are looking for companies that provide cheaper, but good quality service. Providing excellent service to them will ensure that they remain your customers and even recommend you to others.

These are just a few issues but I hope the outline helps owners recognize some key pitfalls to avoid. Let me know what you think. gerry@polarisgroupmc.com



Monday, April 9, 2018

Business Management

Business Failure or Failure of Leadership?





Why do businesses fail? If you strip away all the excuses, rationalizations, and other justifications and drill down you may find the major reason for failure is poor leadership.
Here are a few reasons businesses fail and how leadership failure is key.





1. Lack of Vision
It is the role of the CEO to clearly define and communicate the corporate vision. If there is no vision, a flawed vision, or a poorly communicated vision, the responsibility falls squarely in the lap of executive leadership.

2. Poor Branding
A poor brand generally means leadership has failed. Brands fall into decline for only one reason – leaders have abdicated their responsibility. They have allowed their brand equity to erode, and failed to deliver on the brand promise. Leaders who don’t steward their brand as one of the greatest corporate assets deserve the fate that awaits them.

3. Flawed Strategy
A flawed strategy simply reveals weak leadership. While there are exceptions to every rule, companies tend to succeed by design and fail by default. Show me a company with a flawed strategy and I’ll show you an inept leader.

4. Lack of Capital
Sometimes well capitalized ventures fail miserably, and severely under-capitalized ventures eventually grow. Raising, deploying, and managing capital is ultimately the responsibility of leadership. The amount of capital required to run a business is based upon how the business is operated. If leadership operates the business without consideration for capital constraints, or irrespective of capital formation issues, then the blame should fall squarely on the shoulders of leadership.

5. Isolation from Advice
Nobody has cornered the market on knowledge and wisdom. If leadership doesn’t seek out the best quality advice available to them, they will likely not make the best decisions. All CEOs and entrepreneurs need top quality professional advisers. When a leader has a “miss” or a blind-spot, he or she is simply showing the arrogance of operating within the limitations of their own thinking and poor results may follow.

6. Failure to Act
Failure to anticipate or react to competition, technology, or marketplace changes can lead a business into the danger zone. Staying innovative and aware is a key responsibility of the business leadership.


There are many other reasons for business failure and I hope this stimulates thoughts that may prevent your business from failing. Let me know your thoughts.
gerry@polarisgroupmc.com

Sunday, March 25, 2018

Business Management

Time Management – Tips that May Help

Time is one of the resources business managers have that is scarce, cannot be replaced once spent, and it cannot be borrowed or purchased. Here are a few tips to help manage it.

1. Time management myth
This is the first thing you have to understand about time management. No matter how organized we are, there are always only 24 hours in a day.
Time doesn't change. All we can actually manage is ourselves and what we do with the time that we have.

2. Calls and email. 
Try not answering the phone every time it rings or reading an email just because it shows up. Few issues in business require an instant answer and you will be more efficient if you schedule time to return calls and email inquiries.

3. Prioritize ruthlessly.
You should start each day with a session prioritizing the tasks for that day and setting your performance benchmark.
If you have 20 tasks for a given day, how many of them do you truly need to accomplish?

4. Delegate and/or outsource.
Delegation is one of the hardest things to learn how to do for many business owners, but no matter how small your business is, there's no need for you to be a one-person show—you need to let other people carry some of the load.

5. Downtime. 
Casual time over lunch can be useful for strengthening relations with employees, customers and suppliers. Use that time judiciously.

Remember that it is difficult to get everything done and best results are achieved from those priority activities that are the focus of the business and future growth.
Thanks for allowing me to share your time with these tips.
Gerry@polarisgroupmc.com

Sunday, March 11, 2018

Challenges of a Growing Business


Growing businesses face a range of challenges. As a business grows, different problems and opportunities demand different solutions - what worked a year ago might now be not the best approach. All too often, avoidable mistakes turn what could have been a great business into an also-ran.

Effective leadership will help you make the most of the opportunities, creating sustainable growth for the future.

Here are a few highlights of risks and mistakes that are common to growing businesses:

1. Keeping Up
Market research isn't something you do as a one-off when you launch your business. Business conditions change continually, so your market research should be continuous as well. Otherwise you run the risk of making business decisions based on out-of-date information, which can lead to business failure.

2. Planning Ahead
The plan that made sense for you a year ago isn't necessarily right for you now. Market conditions continually change, so you need to revisit and update your business plan regularly

3. Cash Flow management
Good cash flow control is important for any business. For a growing business, it's crucial. Cash constraints can be the biggest factor limiting growth and overtrading can be fatal. Making the best use of your finances should be a key element in business planning and assessing new opportunities. With limited resources, you may need to pass up promising opportunities if pursuing them would mean starving your core business of essential funding.

4. Problem Solving
New businesses often run in perpetual crisis mode. Every day brings new challenges that urgently need resolving and management spends most of their time troubleshooting. As your business grows, this approach simply doesn't work. While a short-term crisis is always urgent, it may not matter nearly as much as other things you could be doing.

5. The Right Systems
All businesses produce and rely on large volumes of information - financial records, interactions with customers, employee details, regulatory requirements and so on. It's too much to keep track of - let alone use effectively - without the right systems. Responsibilities and tasks can be delegated as your business grows, but without solid management information systems you cannot manage effectively.

I hope this helps as you face the daily challenges of growing your business. Please let me know what you think.  Gerry@polarisgroupmc.com






Sunday, February 25, 2018

Business Management

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
However there may be instances where strategic planning may be inappropriate for some small companies.



Here are some reasons that may be the case and alternative action these companies may take.

1.  Time. There may be conditions that exist that do not allow management to take the time to invest in days of planning.

2.  Cost. The company may not have the financing to support engaging professional help and more important may not be able to take key executives like sales managers away from the jobs as it could impact revenue generation.

3. Change. Smaller companies could be in an environment where change is needed frequently and long term strategies are inappropriate.

The option in this environment 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.

1. 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.

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

3. 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.
Gerry@polarisgroupmc.com

Sunday, February 11, 2018

Business Management

Challenges Facing Small Business



There are many problems that are encountered by business owners throughout the course of managing their business. All entrepreneurs must be prepared for solving problems that come their way.
Here are some common  problems faces in businesses today.






1. Cash:
Finding it and managing it. There is never enough. Fast growing companies can outgrow available resources. Underperformers can’t acquire cash.
Leasing vs purchasing can lesson stress while commercial loans, credit cards and overdrafts are expensive. Care is needed to protect the business’ overall credit rating.

2. Lack of Planning
Many business owners don’t know how to plan. Lack of a plan can aggravate cash problems by wasting cash chasing tempting diversions; it is wasteful to throw money at problems hoping for a quick fix. Equally important is updating your plan according to changing economic and business conditions to ensure long term success.

3. Information Overload
The only thing constant is change! Change is continuous. New facts and data keeps emerging and replacing old beliefs and trends. This information overload sometimes makes it gets difficult to find effective solutions.

4. Lack of Execution
This may be the largest issue facing small business. This lack can be in a number of forms including: Poor execution of strategy, failure of new product development, owners spend only minimal time on strategy and are too much involved working in the business instead of on the business.

I hope this summary provides additional clarity and ideas on addressing daily business challenges. Please let me know your thoughts. gerry@poalrisgroupmc.com

Sunday, January 28, 2018

Business Management

Important Yardsticks for your Business



Good financial management is essential to allow business owners to make proper decisions through the year as business conditions change. Periodic quarterly or annual reviews are not adequate.
Performance should be reviewed monthly against goals established for the year.



Key indicators to review include:

1. Revenue Growth: 
are sales increasing year over year and meeting targets?

2. Profitability: 
is the business making adequate profit compared to goals. Are profit margins improving?

3. Liquidity: 
are short term obligations covered? What cash and easily converted assets are available for current operations?

4. Cash Flow: 
are you generating sufficient cash to operate? Is bank financing required to help fund growth?

Sometimes businesses can measure their performance against competition within the industry. That may help highlight areas where improvement may be needed.

It is important to not only make money in a business but it should be professional is its management approach and managing financials is an important step to achieving both goals.

These were just a few considerations. Please let me hear your thoughts.

Sunday, January 14, 2018

Exiting the Business




Determining when and how to exit a business can present issues often more challenging than starting the business.  Here are a few thought starters for owners looking for a way to exit their business.







1. Vision
 Is the business operated from strong principles of strategy with a clear vision? Can that vision be expressed and understood by those who manage the business or potential buyers? If you the owner cannot clearly state the purpose or reasons that you exist don’t expect new owners to invent it for you.
2. Return
How will you get the maximum return if you plan to sell? In cases where management/ownership is dominated by a single individual there is a risk that customers will not have confidence in new ownership unless the current owner can provide an effective transition plan that ensures continuity of the business operations. Current owners may need to plan for extensive transitional training.
3. Why Exit?
Factors that may support your decision to leave can grow out of many conditions. The most common are age or health related. A long career leading to a desire for more personal time; reap the rewards of your career. Age may not be the prime driver but longevity at the job could be creating burn out. It may be time to move on.
4. Sell from Strength
Look for opportunities to exit from positions of strength. A well trained and competent management group may provide the opportunity to offer a management buyout.  Managers may be able to pool resources to fund the buyout, you as owner may offer to finance all or part of the buyout or there may be an option to use company assets to finance the loans needed for the buyout. It also provides good opportunities for maintaining stability in the organization.
5. Know the Market
Finally, the marketplace may facilitate determining the right time to exit. Poor economic conditions or competitive activity can have a huge impact on if or when you should exit. Positive conditions too might bring a competitor to the door with a buyout offer.


So the options are many but not always easy to sort through. Timing is critical, business life changes, choose wisely.

I hope these suggestions help with any consideration involving exiting the business. Please let me know your thoughts. gerry@polarisgroupmc.com