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.

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.