Business And Financial Wisdom You Can Put To Work
Starting Your Business
Business owners face two learning curves.
One is learning all they can about their customer and customer so they can create an attractive value proposition and learning how to deliver that consistently well.
The more fundamental learning curve involves becoming a skilled business owner. A related TeamStart startup article, "Why Businesses Succeed Or Fail", makes it clear that the most important factor in business success is having a solid grasp of a core set of business skills and capabilities. Solid means both breadth and depth.
Business owners must lead. They provide the vision and strategy and manage the business. Essentially, the business owner uses knowledge, information and experience to organize and mobilize resources. Others are responsible for carrying out plans.
The framework within which to manage is to set clear goals, have a clear understanding of issues and alternatives, perform a proper and adequate analysis in developing appropriate solutions, and implement plans using appropriate and sufficient resources.
But all this is only a neat and tidy theoretical framework. It says very little about what is really required to successfully run a business.
Actually running a business requires certain skills and tools which can be learned and developed through a combination of reading, formal training and experience. Important skills include the following:
Communication skills
Planning and organizational skills
Supervisory, leadership and arbitration skills
Marketing skills
Administrative capabilities
Financial and analytical skills
Management tools are essentially bodies of knowledge which, when applied to problems provide a framework for solutions. These bodies of knowledge are again the result of education and experience. These tools include:
Time management
Networking
Delegation, motivation, and monitoring
Monitoring strategic information and balances
Problem analysis and problem solving
Decision making models and frameworks
Developing and educating personnel
As tools, they should be applied in the proper circumstances and in the proper manner with the objective of making best use of your time.
For example, it is necessary to monitor the collection of accounts receivable, but instead of looking at all receivables, you may find that a report on customers who are 90 days overdue, along with collection efforts to date is a more efficient use of your time.
A planning framework, such as the following, can also be very useful.
What is the question, objective, desired result.
How can this be achieved
Who and what must be involved to achieve this
What support\resources\financing required
Physical\financial\personnel impacts\constraints
Constraints to further opportunities\alternatives
What\how should you communicate expectations
Why\when\how to take what particular steps
Why\when do you need to know\do\have\what
Ongoing support\monitoring\costs
In summary, management tools are based on knowledge and information more so than on computers, calculators and other equipment. Understanding how, where and when to use them is probably the most important factor in successfully running a complex business.
Most of these tools can be learned from books, seminars and from networks but because every business and person running a business is different, actually applying them to your own situation and learning from the experience is the best teacher.
So learn all you can about these tools by reading relevant books, attending seminars and from discussions with your networks. Apply them to your own organization and employees. You will be rewarded by increased efficiency, and knowledge about your own business which in turn supports the planning and decision making process.
© 2016 John B Voorpostel CPA, CA, CMB
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