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Business management: Issues to address
Before you set out to run a business, there are issues that you need to research and decide on. Going through these may take you some time but it can save you a lot of pain in the future. The business planning stage helps you decide if your business has any real chance at success.
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Financial resilience, sustainability and transformation have never been more important in business. If you are seeking to transform your organization robustly, manage your finances professionally. The more successfully you manage your money, the higher your odds are for profitability. Manage your money in such a manner that helps you accomplish your organizational goals and objectives.
Business finance is basically the money you need to establish and run your business, which includes modernizing or diversifying operations and expansion. Primarily, business financial management is more than keeping an accurate set of books and balancing your business checking account.
You must manage your finances so you don’t overspend as well as to remain prepared for all expenses. Your financial management responsibilities affect all aspects of your business. A company that sells well but has poor financial management can fail.
Generally, financial management is one of the most important responsibilities of owners and business managers. You must consider the potential consequences of their management decisions on profits, cash flow and on the financial condition of the company. The activities of every aspect of a business have an impact on the company’s financial performance and must be evaluated and controlled wisely. The objectives involved in financial management are:
- Maintaining enough supply of funds for the organization.
- Ensuring shareholders of the organization to get good returns on their investment.
- Optimum and efficient utilization of funds.
- Creating real and safe investment opportunities to invest in.
- Calculating the capital required – the financial manager has to calculate the amount of funds the organization requires. This depends upon the policies of the firm with regards to expected expenses and profits. The amount required has to be estimated in such a way that the earning capability of the organization increases.
- Formation of capital structure – once the amount of capital the firm requires has been estimated, a capital structure needs to be formed. This involves debt equity analysis in the short-term and the long-term. This depends upon the amount of the capital the firm owns, and the amount that needs to be raised via external sources.
- Investing the capital – every organization or firm needs to invest money in order to raise more capital and gain regular returns. Hence, the financial manager needs to invest the organization’s funds in safe and profitable ventures.
- Allocation of profits – once the organization has earned a good amount of net profit, it is the financial manager’s duty to efficiently allocate it. This could involve keeping a part of the net profit for contingency, innovation, or expansion purposes, while another part of the profit can be used to provide dividends to the shareholders.
- Effective management of money – effective management of money is key in business. Money is required for various purposes in the firm such as payment of salaries and bills, maintaining stock, meeting liabilities, and the purchase of any materials or equipment.
- Financial control – not only does the financial manager have to plan, organize, and obtain funds, but he also has to control and analyze the firm’s finances in the short-term and the long-term. This can be done using financial tools such as financial forecasting, ratio analysis, risk management, and profit and cost control.
Reasons why financial management is important
Business cycles of growth, boom, recession, depression and renewal caused by changes in the economy and other external factors are a reality. And no matter how well it is doing, the business is bound to bear the consequences and has to be prepared to tackle these cycles. The financial plans must be foolproof and should include plans for when the business takes a hit due economic downturn.
In the long-term, capital is crucial for purchasing assets like machinery, land, equipment, etc. to expand the production scale. Scaling up production will create assets, help the business grow and penetrate existing markets. The business must have sufficient capital budget to do so and cannot depend on short-term finances for this. They must have savings and should be able to raise and infuse capital investment through debt or equity financing. Below are reasons why financial management is important:
1. For financial planning
Financial management’s core importance is in facilitating financial planning, which decides each financial necessity associated with business concerns. Typically, it is important to manage your business funds so that you don’t overspend. Ultimately, the credit for business success mostly depends on the financial planning of a company.
2. Safeguarding / protecting funds
The importance of financial management includes protecting finance towards achieving business goals. One has to measure the areas where funds are required and allocate it well in all the areas for the smooth functioning of a business. Overspending on one project impacts other business operations as they may lack financing. Thus, it is crucial to safeguard funds and invest wisely.
3. For proper allocation of funds
Financial management in an organization helps to allocate funds appropriately. When making proper use of allocated finance to assets, it enhances the operational proficiency for the business concern. Whenever the finance specialist makes use of the funds appropriately and allocates them wisely, they reduce business expense and increase capital estimated for your company.
4. To improve investment opportunities
If you are good at managing your finances and saving, then you increase your chances of getting opportunities to greener investments. Investment opportunities will assist you in creating wealth so that you can enjoy your retirement period. There are various investment opportunities you can explore like investing in stocks, gold, mutual funds, property and lands. However, you should study about investing in detail to know the risks and returns of investment. Depending upon your risk ability, you can then choose the appropriate investment options.
5. For improved financial decisions
The importance of financial management points to financial decisions. Once a financial choice according to the business concern or goal has made, it cannot be rewound. If you spend money recklessly you won’t be able to regain it. Any wrong decision that you make in business has fatal implications. Financial decisions should be made wisely from money allocated for production, advertising, rents, salaries to human resources.
6. For economic growth and stability
Proper financial planning will ensure your economic growth. In fact, your wealth creation will help you to grow financially. The most important thing in business is financial stability. Again, the only way to ensure your financial stability is through economic growth and the only option to ensure the same is through financial management.
7. For an improved standard of living
Once you have learnt and taken good knowledge on financial management, it will not only provide you financial stability and peace of mind but it will improve your standard of living as well. Your economic growth will transform your life by improving your standard of living.
8. For company valuation
Company valuation is a critical part of any business transaction and will be required for many reasons. Regardless of whether you seek to complete an investment, an Initial Public Offering (IPO) or a Merger & Acquisition (M&A), the valuation forms an integral part of negotiations and can ultimately determine the success of a given transaction. Thus, good financial management can assist in improving your company.
9. For proper tax planning
Your financial planning should also include your tax planning. Failing to plan for your taxes appropriately, will lead you to spend more. Proper and exceptional tax planning will help you towards economic growth. On the contrary, failure to plan may result in your business running out of cash leading in disturbances in terms of your investment decisions.
10. To strengthen your capital reserves
A capital reserve is a resource created by the accumulated capital surplus (not revenue surplus) of an organization, such as by an upward revaluation of its assets to reflect their current market value after appreciation. Sums allocated to a capital reserve are permanently invested and cannot be used to pay dividends. The stronger your business financial management is, the greater and stronger your capital reserve will be.
In conclusion, successful organizations create plans to achieve their objectives. These plans include cash flow projections, sales planning, purchases of fixed assets and projecting inventory levels. An accounting analysis or rather professional business financial management will provide the basis for making forecasts and developing plans to meet those targets.
Human Resource Management plays a strategic role in managing people, the workplace culture and environment. If effective, it can contribute greatly to the overall company direction and the accomplishment of its goals and objectives.
Primarily, this is a faction within an organization concentrated on recruiting, managing and directing people who work in it. Human Resource Management deals with issues related to compensation, performance management, organization development, safety, wellness, benefits, employee motivation, training and others.
Reasons why HR is crucial for your company
1. Budget Control
The HR department develops methods for trimming the costs associated with workforce management, thus curbing excessive spending and helping to save the company money in the long run. These methods may include negotiating better rates for employee benefits such as healthcare insurance.
In addition, the HR department studies and analyzes employment trends, the labor market and salaries based on job functions to ensure the company’s wages are competitive and realistic. Since some small businesses have strict budgets to which they must adhere to, this function of the HR department is particularly helpful.
2. Employee Satisfaction
For better or worse, the HRM has the responsibility of determining whether employees are satisfied, not only with their supervisors but also the job and related duties as well. Since it can be difficult to measure satisfaction as it is an ambiguous measurement at best, HR specialists carefully design employee surveys, oversee focus groups and implement an exit interview strategy to determine how the company can improve in relation to its employees.
In other words, the HR department determines the causes and/or reasons behind employee dissatisfaction for current or previous employees and addresses those issues in the best way possible to boost morale and motivation throughout the company.
3. Training and Development
Human resource specialists conduct assessments for the company’s employees in order to determine the type of training and skills employees must have to properly and efficiently perform their duties. Although it is important to ensure that all employees have the qualifications and skills necessary to meet the demands of a position, new companies or businesses in the expanding stage may especially benefit from identifying training needs for existing employees.
Companies often task this responsibility to the HR department because it is less expensive for these specialists to handle training and development than it is to hire more qualified candidates or additional staff. In addition, this strategy may also improve employee retention thus reducing turnover.
4. Conflict Resolution
In truth, there will be conflicts in the workplace, regardless of how satisfied employees are with their jobs, their managers and their co-workers. Given the diversity of work styles, personalities, levels of experience and backgrounds of employees, it’s a given that arguments and disagreements will happen.
An HR manager or specialist specifically trained to handle relations between employees can identify and resolve these conflicts between a manager and employee or two employees and thus effectively restore positive working relationships throughout the organization. In addition, being able to resolve conflicts may increase employee satisfaction and increase the morale of the workplace.
5. Performance Improvement
Yet another responsibility of the HR department is the development of performance management systems. Without an HR specialist to construct a plan that measures employee performance, employees may end up in jobs that are not suitable for their expertise and skills. Not only will this contribute to employee dissatisfaction, but individuals who consistently fall below the employer’s expectations for performance may sneak by on the payroll, thereby costing the company money on low-performing employees that are not helping the business to succeed.
As a result, an HR specialist is critical in improving company morale and developing methods to ensure high performance standards to resolving conflicts among employees and ensuring a company stays within its budget.
6. Strategic Management
HRM improves the company’s bottom line with its knowledge of how human capital affects organizational success. Leaders with expertise in HR strategic management participate in corporate decision-making that underlies current staffing assessments and projections for future workforce needs based on business demand.
7. Wages and Salaries
HR compensation specialists develop realistic compensation structures that set company wages competitive with other businesses in the area, in the same industry or companies competing for employees with similar skills. They conduct extensive wage and salary surveys to maintain compensation costs in line with the organization’s current financial status and projected revenue.
8. Minimizing Liability Issues
HR employee relations specialists minimize the organization’s exposure and liability related to allegations of unfair employment practices. They identify, investigate and resolve workplace issues that, left unattended, could spiral out of control and embroil the organization in legal matters pertaining to federal and state anti-discrimination and harassment laws.
9. Maintaining Compliance
HR workers ensure that the organization complies with state employment laws. They complete paperwork necessary for documenting that the company’s employees are eligible to work in that company. Again, they monitor compliance with applicable laws for organizations that receive federal or state government contracts, through maintaining applicant flow logs, written affirmative action plans and disparate impact analyses.
For small businesses and large conglomerates alike, the human resources or personnel function can be helpful for much more than simply processing payroll or handling the open enrollment season once a year. Human resources plays an essential role in developing a company’s strategy as well as handling the employee-centered activities of an organization.
10. Improving Corporate Image
Businesses want to be known as the “employer of choice.” Employers of choice are the companies that receive recognition for the way they treat employees. Furthermore, they are the companies for whom people want to work. Becoming an employer of choice means human resources balances recruiting the most qualified applicants, selecting the most suitable candidates and retaining the most talented employees. Hence, the importance of HRM.
Basically, HR recruiters manage the employment process from screening resumes to scheduling interviews to processing new employees. Typically, they determine the most effective methods for recruiting applicants, including assessing which applicant tracking systems are best suited for the organization’s needs. HR professionals work closely with hiring managers to effect good hiring decisions, according to the organization’s workforce needs. They provide guidance to managers who aren’t familiar with HR or standard hiring processes to ensure that the company extends offers to suitable candidates.
11. Analyzing Benefits
Benefits specialists can reduce the company’s costs associated with turnover, attrition and hiring replacement workers. They are important to the organization because they have the skills and expertise necessary to negotiate group benefit packages for employees, within the organization’s budget and consistent with economic conditions. Also, they also are familiar with employee benefits most likely to attract and retain workers. This can reduce the company’s costs associated with turnover, attrition and hiring replacement workers.
In conclusion, HRM ensures the workforce embraces the company’s philosophy and business principles. In business, creating a cohesive work environment is imperative. The first opportunity human resources has to accomplish this is through wise hiring decisions that identifies employees with the promise and requisite capabilities to eventually transition into leadership roles with the company. This is an important function as it guarantees the organization’s stability and future success.
While the brain of any business is the finance department and the body being the product offered, the heart is the marketing department. Customers are the life blood of every business and without them there is no business. Without the proper and exceptional marketing techniques to attract and retain customers, your business will suffer. Not only does marketing build brand awareness but it can also increase sales, grow businesses and engage customers.
Primarily, marketing is the key process of researching, promoting and selling products or services to your target market. In truth, every business wants to maximize their profits, but this can only gained through awareness, persuasion and sales, with sales being the pivotal point in generating revenue and marketing being the added value factor to the product or service that is being sold.
Generally, without marketing, many businesses would fail to exist. You could have the most amazing product or service, but if no one knows it exists or understands the value, you won’t make a single sale. It is important that you use marketing to promote your business, brand and offerings. Good strategic marketing encompasses the following strategic activities:
- Determining the need for a product through consumer research and by observing and quantifying sales patterns of similar goods in the marketplace.
- Modifying existing products or creating new products to match consumer needs and wants.
- Determining how best to reach potential customers to make them aware of your products and to persuade them to buy.
- Creating marketing campaigns based on your determinations of the most effective way of reaching customers.
- Confirming customer relationships via follow-up sales campaigns and loyalty programs.
Reasons why marketing is crucial for business success
1. It informs
On a base level, marketing is useful for customer education. Marketing is the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large. It provides the value of the core product, the usage and additional details that customers usually want to know. This helps with brand awareness as it relates to informative advertising.
Marketing is of vital importance to any business.The heart of every successful business lies in marketing. If you want your business to be successful, the service or the product you are offering must be known so that you will have potential buyers. By raising awareness through marketing, you will build an audience of potential customers who know who you are, know what you can offer, and know exactly where to find you when they are ready to purchase your products or services.
If your business is unknown to the community and you don’t have any kind of communication with your customers you need to use marketing strategies to create awareness for your service or product. So, if you use marketing to promote your company, it will give you a chance to be discovered by many potential customers.
2. It increases sales
By utilizing different ways to promote your product or service, you will be increasing your sales. This can be done through various mediums which include, word of mouth, social media, direct marketing, press, radio, TV, point of sales, promotions, company website and other channels that assist with attracting and persuading persons to purchase the product or service offered.
Through the use of a combination of these mediums, there can be increased sales which positively impacts profitability. When people know your business exists, they are much more likely to become your customers. If your marketing campaigns are doing their job properly, you will start to see an increase in sales shortly after you get started.
Ultimately, once you had advertised your service, product or company and got it on the radar, you increase your chances of making a sale. The very second this becomes reality, there is a chance that new customers will spread the word and tell their family and friends about your amazing services or the products they have discovered.
3. It increases your business legitimacy
Your company’s reputation is one big factor which decides whether your business will be successful or not. Having good marketing techniques helps you build your brand name. When you set high expectations for your company in the public eye, then your company will stand on a firmer ground.
So, when your reputation grows, it will increase your sales and expand your business. To build a good reputation for your company, you have to actively participate in community programs, have effective communication both internally and externally and offer quality services and products to support your marketing and make your efforts worthwhile. It creates trust. People want to buy from a business that has a trustworthy reputation.
In truth, people want to know that they can trust the business they are buying from. It takes time to build the trust and reputation for your business. Once your business can establish this trust with your clients, it creates customer loyalty. If your clients are happy with your products or services, they will talk about your business.
4. It gives your healthy competition
Marketing makes room in the marketplace for a little healthy competition. When you present your prices via marketing, it reaches the potential customers as well as other businesses who are selling in the same industry. With competition, other companies are given an opportunity to exist on the market where they will try to win consumers through competitive pricing.
5. It helps you understand your customer
During the first stages of the product life cycle, everyone has to do market research where market segmentation is done based on psychographics, behavior, geographic or demographics. Once the segments have been identified, the target market is then assessed and the product is positioned accordingly.
6. It builds your brand
Brand reputation is what makes or breaks a brand. In order for your product or services to exist you should aim to have a good reputation on the market through use of effective marketing mediums. When your brand is affiliated with a certain standard you will see increase sales and business expansion.
7. It makes your business grow
Marketing is an important strategy to ensure the growth of your business. While your current customers should always be your main priority, marketing efforts can help you expand this base. Little efforts like social media posts and email campaigns can not only engage existing consumers but spread the word to new potential customers. In essence, marketing secures your business’ future through new and old customer engagement.
8. It sustains your business
According to Forty, marketing is more like food than it it medicine. Essentially, marketing is meant to sustain a company’s presence nor a remedy of lack of engagement. In this sense, marketing is something that businesses need to create and manage every day to maintain a healthy relationship with their consumers. Marketing is important because it allows you to maintain a long-lasting and ever-present relationship with your audience. It is not a one-time fix, it is an ongoing strategy that helps businesses flourish.
In conclusion, marketing is the most effective way to communicate your value proposition to your customers. In order to buy into a product, your audience needs to have a solid understanding of what it does and how it works. Prove to your customers why your product is the best and why they choose you over your competitors. The sales you make are directly proportional to your business success.
Every business move that you make is a game of probabilities. Your goal is to come up with a strategy that allows you to maximize those probabilities in your favor and for long-term advantages and profits. The truth is, customers are the lifeblood of every business and without sales your business will struggle to survive.
Primarily, a sale is an exchange of money for goods, services or other property. The most common motivations for starting a business is making money and entrepreneurship affords you the opportunity for practically unlimited income. However, the effect that making a sale has on a business’s financial condition depends on the type of sales transaction made. Below are types of sales:
a) Cash sale – cash sales are sales in which the payment obligation of the buyer is settled at once. Cash sales are considered to include the following forms of payment:
- Credit card
- Money order
b) Credit – a credit sale is a sale in which the full amount will be made in one payment sometime in the future or in smaller regular payments over a period of time. The buyer is the owner of the property or goods being sold from the time the arrangement is made. Under a credit sale agreement, you buy the goods at the cash price. You usually have to pay interest but some suppliers offer interest free credit. Repayment is made by installments until you have paid the whole amount.
c) Advance payment – this is a type of payment made ahead of its normal schedule such as paying for a good or service before you actually receive it. Advance payments are sometimes required by sellers as protection against nonpayment, or to cover the seller’s out-of-pocket costs for supplying the service or product.
Ways to increase your business sales
1. Create a unique value proposition
Value proposition is an innovation, service or feature intended to make a company or product attractive to customers. It is a clear statement that explains how your product solves customers’ problems or improves their situation, delivers specific benefits and tells the ideal customer why they should buy from you and not from the competition. It is a promise of value to be delivered, communicated or acknowledged.
In this modern world’s ultra-competitive marketplace, a critical factor in determining the success of a company is how good of a job it does at identifying, expressing and communicating a unique value proposition to potential customers. A company’s unique value proposition is a primary marketing tool. People don’t buy products, they buy the results that product will give.
Value proposition entails the questions: What problems do you want to solve with your product? What value do you want to deliver to customers and which customer needs do you want to satisfy? Value proposition is not mainly about the business idea or product but it’s about solving a problem and satisfying customer needs. Consider whether the help you provide:
- Reduces risk
- Lowers costs
- Increases convenience or usability
- Improves performance
- Increases enjoyment or fulfills a basic need
- Fulfills a social need (brand, status, approval)
- Satisfies an emotional need
2. Clearly identify your target customer
A customer is an individual or business that purchases goods or services produced by another business. Attracting customers is the primary goal for any business because it is the customer who creates the need for goods and services. It is therefore important to identify the individuals who will buy your products. Knowing your targeted customers means knowing who you are creating value for.
The truth is, a business cannot be for everyone because the reality is that a product cannot appeal to everyone. Customers are heterogeneous, they are not the same, and hence a business should consider the age, gender, lifestyle, technological literacy and class of its intended audience. You have to know:
- Who they are.
- What they buy.
- Why they buy.
- What they prefer.
- How much they earn.
- When they buy.
- How much they buy.
3. Create a product with demand
Creating a product with demand entails the creation of a solution that people do not only want, but truly need. It also entails providing the right offer to the right people. The two most common problems associated with this for new companies are that;
- Their offer doesn’t provide the right solution
- Their offer doesn’t appeal to the right people
Understanding your customer needs will help you to develop products and services that meet their needs. Also, ensuring that your services are exceptional encourages customer loyalty and those customers are most likely to refer other people to you.
Reaching the right kind of people for your service or product is very important while being able to market yourself properly is a mandatory skill. Being able to point out the core needs of your customers is a great way of getting competitive advantage over your competitors in your business niche.
4. Advertise your offer
Advertising is a marketing tactic involving paying for space in media outlets to promote a product or service. It is a distribution channel is a way a company can bring its products or services to the market. Advertising is an audio or visual marketing communication that employs an openly sponsored, non-personal message to promote or sell a product, service or idea.
Advertising is a key element in building a successful business because they help you expand your reach and grow your revenue. It is a way or method used to raise awareness about your product or service. A correct advertising channel is key for the success of your product as it is a communication channel.
Advantages of advertising
- Increased brand awareness
- More inbound traffic
- Improved search engine rankings (if it’s social media advertising)
- Higher conversion rates
- Better consumer satisfaction
- Improved brand loyalty
- Thought leadership
5. Pick the right price
Pricing is fundamental to a business’s success; it’s also difficult to establish in a way that guarantees profitability. Companies must constantly review pricing to maximize profit levels while keeping development strategies in check. Even if the right formula seems like it’s nailed down, circumstances beyond the company’s control can throw a wrench in the plan.
Following that, do market research on your competitors to determine the right price. If you have a high-priced product, be prepared to over-deliver quality to your customers. Price can be determined by “perceived value” of your product. If you can make your product seem superior to your competitors, you can charge a higher price.
Under-pricing a product is tempting when you are anxious to compete, you are likely to assume that low prices will increase sales volume. However, cheap goods are perceived by customers to be cheap. Many customers will choose to buy from the more expensive competition, believing the item is of better quality.
Under-pricing is also a tricky long-term strategy, as a business owner, you have a thin margin with which you can cover costs and make profit. A business dependent on low prices will require a constant and ongoing, stream of high volume sales to stay in business.
Consumers are price-savvy, and an overpriced product will sit on the shelf if the competition sells it cheaper. As much as customers look for quality, they will also protect their pocketbooks. Overpriced merchandise will lead to a decrease in sales, as it’s possible to price products beyond the customer’s ability and willingness to pay.
6. Establish and maintain good customer relationships
They say once a customer always a customer. Once a customer has purchased your product, this should not be the end of your relationship with them. Focus on keeping a strong relationship with your customer. This will only create more trust and add value to your product.
The goal of following putting in place a system that encourages recurring orders from customers is to increase the frequency of transactions per customer. It simply entails following up on customers to have frequent and strategic communication with your buyers and prospects that cause them to buy from you over and over again.
Again, some customers will flow right through your funnel purchasing everything they are offered but some wont. Hence it is important for a business to keeping following up on potential customers and to keep them engaged with your brand so that you can try and convert them later.
7. Offer something free in return of customer information
Your ideal customer is far more likely to buy your product if you give them a preview to try out. Shoot a short video of your product in action, give them a free piece of really great content and get your customers excited for what’s next. Most importantly, offering something for free motivates or encourages an individual to do something.
It is a concession to stimulate greater output or investment. It is an inducement or supplementary reward that serves as a motivational device for a desired action or bahaviour. In business, it is important to offer something irresistible to a prospect in exchange for their contact information such as email addresses. These free offers are also referred to as lead magnets because they serve the purpose of attracting potential customers.
Although no money is involved, it is such valuable transactions which start your company’s relationship with that person, it as an ice breaker in other words. To be effective, a lead magnet needs to not only provide tremendous value but it also needs to provide a specific solution. Specificity is the key to higher conversion rates.
In online businesses, business people usually offer a piece of digital and downloadable content such as a free PDF checklist, report, eBook, whitepaper or a video. The goal of the lead magnet is to maximize the number of targeted leads you are going to offer. Examples include:
- Offer your blog readers a content upgrade
- Offer a free sample product
- Give your visitors free expert advice
- Use of quizzes and surveys
In conclusion, being an entrepreneur means being a smart competitor because from the day you start your business, you are in a battle for the top spot in your niche. To emerge victorious, you either invent the niche or dethrone the current dominating companies in the market.
The administration department is the backbone of an organization. In truth, an effective administrator is an asset to an organization. He or she is the link between an organization’s various departments and ensures the smooth flow of information from one part to the other.
Primarily, an administrative organizational structure is a typically hierarchical arrangement of lines of authority. It determines how the roles, power and responsibilities are assigned and how the work process flows among different management levels.
The focus is on division, coordination and control of tasks and the flow of information within the organization. Ideally, in developing an organizational structure and distributing authority, an administrator’s decision reflects the mission, objectives, goals and tactics that grow out of the planning function.
1. To maintain work efficiency
Administration helps in keeping up productivity in business. In basic words, business administration can be characterized as an unmistakable procedure of arranging, sorting out, staffing, coordinating, organizing and controlling office with a specific end goal to encourage accomplishment of destinations of any business undertaking. The obligation of an administrator relies upon the organization that the executive works for.
The primary employment obligation of an administrator is to guarantee the proficient execution of all divisions in an organization. They go about as an interfacing join between the senior administration and the workers. Thus, they give inspiration to the work power and influence them to understand the objectives of the organization.
In addition, office administration is one of the key components related with an abnormal state of working environment profitability and productivity. It is exceptionally hard to run a company without a decent administration personnel. It is the administrator who makes the guidelines and directions and applies these standards in an organization.
2. To facilitate coordination
Office administration helps in fitting all the office exercises. It encourages control by impacting conduct of occasions to guarantee their adjustment to design. Administration office is the spine of an organization. A compelling overseer is an asset for any business.
Again, he or she is the connection between an association’s different divisions and guarantees the smooth stream of data from one section to the next. Without a compelling administration, a business would not run professionally and easily.
3. To manage change
The significance of business administration is that it helps in arranging change and presenting it at the opportune time and in the correct way. Due to progress in innovation strategies, work methods and so on must be changed for proficiency and to suit the economy.
Contrarily, individuals oppose change because of the absence of understanding the explanations behind the changes made. As a result, administration helps in limiting protection of individuals and goes about as a change-operator.
4. To provide innovation
The key to any successful business is the ability to come up with fresh new ideas to keep the operation running and the products and services fresh. This influx of fresh ideas into the business on a regular basis is known as innovation. Thus, innovation plays a very important role in any business venture.
Ultimately, business advancement is finding new, unique and better strategies for doing existing work. To design and oversee advancement, administration plays the most critical part. Proposals from clients, data from sales representatives and close watch on contender’s exercises gives a wellspring of developments which facilitate business success. Here are four reasons why innovation is such a crucial component to the success of any business:
a) Innovation helps the business grow in leaps and bounds
Businesses that innovate are able to scale up their structure much more. With innovation, you can do so many other things like adding more employees. Again, it helps you gain more customers and grab a bigger share of the market. Following that, innovation makes it easier to grow whatever may be the size and type of your business.
b) Innovation helps make a niche for yourself in competition
The market is huge and it is filled with so many other individual business and companies that may be serving products in the same category as you. The bottom line is that you are far from alone! Therefore, among all this competition, you need to stand out in some way. This is where innovation can help you.
With the help of right innovation tactics, you can actually offer something extremely unique to your customers. Another great idea is, you can take an existing product, add your own twist to it and give it a totally different shape, making it several times better than its original form. This is what makes brands stand out in the market and it naturally also means more revenue.
c) Innovation helps meet customer needs
In a highly competitive market, the needs of customers are dynamic and are constantly evolving. What you are providing them with today may have a great response from their end. However, you cannot be sure if tomorrow the situation is going to be the same. They might be demanding something else.
Innovative business ideas actually have the power to anticipate market changes even before they actually happen and provide solutions to people even before they feel the need for them. This way your customers are satisfied most of the times.
In fact, it’s tough to meet customer needs unless you bring in constant innovation in your business. If you are happy with the status quo and refuse to introduce new ideas, your business may start struggling. It’s a must to come up with new innovations all the time to excite and please your customers if you want your business to stay relevant.
d) Innovation is important for future growth
Innovation is a very important factor to ensure consistent growth for a business from a future point of view. It has a lot to do with adding newer business models and products that provide an impetus to the overall revenues in the future. Innovation that is sustainable also helps ensure that current products continue to meet the customer demands and also contribute to the revenue growth in the future.
Following that, a business that is ready to innovate can stand firm even if the market experiences constantly vagaries. Such a business is ready to face any challenges that future market changes can bring in. Once your business is set, it is possible that you may become a little stagnant for some time and enjoy the results you are getting. You may think that the strategy that is working now, will definitely work in the future too.
In reality, however, status quo will not work forever for your business. You will have to keep your mind open for fresh, new ideas and be ready to innovate from time to time. It is important to undertake innovation on a regular basis so that you can enjoy the rewards that it brings in the future.
5. To minimize business costs
Business expenses must be decreased under the direction and control of productive administration. Again, business administration is concerned about doing the business exercises in a best and least expensive way.
Cost lessening is one of the protest of administration which can be accomplished through work disentanglement and automation. Through better arranging, sound association and viable control, administration empowers a worry to lessen costs and set up an undertaking to confront merciless rivalry.
6. For social benefits
Administration is useful to the business ventures as well as to the different fragments of society too. It gives and keeps up interface with different sorts of providers, banks, insurance agencies, government offices and the overall population. It benefits society all in all by giving its administration services.
7. For optimum use of resources
Administration helps in usage of assets viably. Specifically, rare and profitable business assets should be utilized wisely and it is the duty of administrators to oversee that. As if that is not enough, they realize coordination and reconciliation of different assets. It is administration which controls the staff in office in the utilization of assets.
In conclusion, the administration department plays important roles by linking between the various departments of an organization or firm and ensures smooth information flow from part to another. The department facilitates organizational success by taking care of the welfare of employees and the functioning of the organization at large. [/tab][tab]
Purchasing / Procurement
The role of procurement and/or purchasing goes far beyond the traditional belief of obtaining goods and services in response to the organization’s internal needs. Primarily, procurement and purchasing are strategic functions with a sole mandate of improving the organization’s profitability. They are a streamline of processes aimed at reducing raw material prices and costs and identifying better sources of supply.
Ultimately, procurement is concerned with acquiring (procuring) all of the goods, services and work that is vital to an organization. A procurement department is mandated to execute 3 main functions which are to manage the organization’s spending, support operations and protect the organization from risk.
Most importantly, while procurement and purchasing can be used interchangeably, they have some differences. Purchasing refers to the process of ordering and receiving goods and services. It is a subset of the wider procurement process.
On the contrary, procurement is the overarching function that describes the activities and processes to acquire goods and services. Distinct from purchasing, procurement involves the activities involved in establishing fundamental requirements, sourcing activities such as market research and vendor evaluation and negotiation of contracts.
However, both procurement and purchasing are business functions responsible for deciding what to buy and from whom. When a business is small, procurement is not very important and it is done by anyone in the company. For example a software engineer will buy their own laptop from Office Depot. However, as a business grows, it needs to be disciplined in order to avoid supply interruptions, ensure quality and to keep its costs low by having specialists make the buying decisions.
The importance of procurement in business
Any organization is capable of spending well over half of its revenue on purchasing goods and services hence proper procurement management is vital. Even the slightest decrease in purchasing costs can have a significantly direct impact on profits while a lack of strategic decisions can sink an otherwise healthy company. It leads to business success or failure, thus affecting the company’s reputation.
1. Cost reduction
From a business perspective, the most obvious benefits of an effective procurement optimization are financial savings. Productively managing procurement, and by extension purchasing, allows your organization to realize immediate upfront cost savings by procuring items, services and contracts at the best price available.
Furthermore, a company will be able to properly take advantage of any warranties or discounts that are often forgotten, leading to routinely neglected, yet critical and back-end savings. A fully functional purchasing process will also allow for better visibility into company spending and budgets.
Having a strong understanding of company spending will allow your organization to negotiate better contracts with vendors, enabling you to take full advantage of discounts that might have previously appeared unavailable. Visibility into spending patterns and budgets will also allow your organization the option to leverage additional cash flow by extending payment terms and forecast for the future.
2. Organizational effectiveness
Many view the procurement cycle as a one-dimensional process within an organization. However, when procurement is adopted widely within an organization, it often leads to greater efficiency and provides for a better match with desired goods or services.
An optimized purchasing process leads to more efficient sourcing, quality goods and services are delivered on time. An up-to-date procurement process will also ensure that an organization’s supply chain will be able to capably navigate through any unforeseen roadblocks (financial problems, natural disasters, labor shortage/surplus and economic volatility).
When optimized, an efficient procurement process will also help in distinguishing between successful vendors from underachieving vendors. Ultimately, being able to distinguish between quality vendors will not only improve your supply chain overall but might even lead to compensation from the low-quality vendors from failing to deliver within agreed upon parameters.
3. It gives room for innovation
Businesses are constantly being tested by their competitors, either on price, quality of good or service or convenience. Any competitive edge might be the difference between a new customer and a lost sale. A progressive procurement process will allow an organization to seek out innovative products or services.
An organization with an entrusted purchasing process will enable the sourcing of those innovative goods and services in the hopes of securing a competitive advantage. In some cases, solidifying (empowering) this function might even yield exclusive deals with suppliers.
4. Maintaining consistency
Robust procurement policies and procedures can help a small business maintain quality and consistency. However, procurement managers tend to work with the same vendors out of convenience and habit when new opportunities, company policies and procedures might be too inflexible to take advantage.
Due to the fact that small businesses make increased use of information technology, procurement managers must focus on using data to make decisions and plan. At the same time, complex purchases still require personal skill, experience and insight.
For example, effective procurement managers use resources from the Chartered Institute of Procurement & Supply (CIPS) to operate effectively, drive compliance and manage risk. Regardless of the uniqueness, every procurement management process consists of 3P’s, namely process, people, and paperwork.
These are stakeholders and their specific responsibility in the procurement cycle. They take care of initiating or authorizing every stage of the process. The number of stakeholders involved is directly proportional to the risk and value of the purchase. The people aspect is vital in the pursuit of workable supplier diversity initiatives, both from an internal and external standpoint.
Simply put, a successful supplier diversity program is one that aligns its goals and objectives with its stakeholders or its people. For external stakeholders or suppliers, alignment should occur through constant, well-thought outreach about your supplier diversity program, including goals, opportunities and requirements. You want to impart to your supplier base that supplier diversity matters as a function of good business.
Focusing on the needs of your suppliers, for instance, helps you identify those diverse suppliers that are and can be strategic to your business mission and dynamically contribute business value to your supply chain. It is just as important to outreach with your internal stakeholders, the people who are leaders of business units who procure goods and services on behalf of the organization.
Unless you reach out within your organization and show your own people how they can contribute to the supplier diversity mission, there likely will be resistance. While areas like distribution, manufacturing and production traditionally produce significant supplier activity, why not also ensure the mission is being communicated as well to non-traditional areas, such as legal, human resources and advertising.
The truth is, unless everyone within the organization is on board with your supplier diversity initiatives, you may have difficulties in growing and acquiring promising procurement opportunities for diverse business. When it comes to people, everyone must be in the people loop.
Diverse suppliers need to understand how to address procurement opportunities, along with being versed in your expectations. In order to boost its diverse suppliers, the organization needs to ensure that all levels of the company understand the business imperative.
This includes the list of rules that need to be followed while reviewing, ordering, obtaining and paying for goods/services. These checkpoints or steps increase with the complexity of the purchase. More importantly, the process helps you to make sound decisions on the quality of the product or service as well as the money you have to part with.
The goods and service you purchase for your organization must be pleasing and endearing to your stakeholders as well as tell a story about your organization. Also, they must be valuable assets that will give you a return on investment. In business, generating revenue is central to business success, growth and survival.
1. Needs Recognition
The preliminary step in a procurement process is recognizing the need for a product. Be it a brand new order or a recurring purchase, needs are analyzed and the availability is double-checked before creating a request for purchase.
2. Purchase Requisition
Typically, a procurement process starts with a purchase requisition. The requester sends a request for procurement (paper form, electronic, or phone) to the purchasing department.
3. Review of Request
The purchase request is then reviewed by the procurement/finance team. Approved requests are made while rejected requests are sent back to the requester with the reason for rejection. All these can be handled with a simple purchase order app.
4. Budget Approval
In enterprises, once the procurement team approves a request, it is forwarded to the accounting department to receive budget approval.
5. Quotation Requests
Once the budget is approved, the procurement team forwards several requests for quotation (RFQ) to vendors with the intention to receive and compare bids to shortlist the perfect vendor.
6. Negotiation & Contract
Once a vendor is selected, the contract negotiation and signing are completed, and the purchase order is then forwarded to the vendor. A legally binding contract activates right after a vendor accepts a PO and acknowledges it.
7. Receive Goods/Services
The vendor delivers the promised goods/services within the stipulated timeline. After receiving them, the purchaser examines the order and notifies the vendor of any issues with the received items.
8. Three-Way Matching
At this step, three documents–purchase orders, packaging slips (that arrive with the order), and vendor invoices–are lined up and reconciled to pinpoint discrepancies and ensure that the transaction is accurate. Discrepancies should be addressed once they are discovered.
9. Invoice Approval Payment
Once three-way matching is complete, the invoice is approved and forwarded to payment processing depending on organizational norms.
10. Record Keeping
After the payment process, buyers make a record of it for bookkeeping and auditing. All appropriate documents right from purchase requests to approved invoices are stored in a centralized location.
In conclusion, an organization exists to create value for its customers. The procurement function is pivotal in supporting value creation processes and protects the organization from risk by deploying risk management methodologies. In business, effective procurement strategies and well managed supply chains enables an organization to focus on developing and delivering products and services that exceed customer expectations.
Coming up with a great idea for a new business is one thing, but actually seeing that great idea through from concept to creation is entirely another. Running a business takes effort, attention to detail and adherence to certain deadlines and guidelines, and failing to follow these guidelines can land your business in trouble.
All businesses share a measure of complexity. The activities of a company can never be said to be a simple and smooth ride from point A to point B. Rather, activities should be regarded as an intricate web of processes. These processes fall under the collective term ‘business operations’ and as such, these can differ from company to company.
Basically, business operations are anything that happens within a company to keep it running and earning money. Primarily, it entails the systems, equipment, people and processes that are needed to keep the organization functioning. Following that, operations are for all intents and purposes essential to any business endeavor.
At first, they are inserted into the business plan to function as a rough roadmap. Both investors and founders can easily access them and gain a better grasp on all the moving parts of a company such as personnel, equipment and the processes needed to increase the organization’s value.
Again, operations are meant to allow an overview and provide oversight in regards to the organization’s activity. They help with assigning clear-cut roles and responsibilities, with the management of risk, resources and allocation as well as revealing the best course of action at all times. They are both a guide and a fail-safe, ensuring that a company stays within its budget and that departments cooperate effectively. Most importantly, a company’s success or failure heavily relies on the efficiency of operations.
- Maintaining effective communications and striving for consensus.
- Providing senior level management with the right amount of coaching, tutoring and mentoring.
- Auditing and re-engineering business processes.
- Maximizing performance by establishing a balance between departments and groups.
- Managing both the budget and planning processes at a strategic and department level.
- Monitoring and guiding third party co-operations with due diligence.
- Performing contract reviews to ensure compliance.
Additionally, the most successful businesses are those that are able to effectively market themselves and set themselves apart from their competitors. Therefore learning to advertise a company is another key component of business operations. As a business owner, you must know how to conduct your day-to-day operations effectively and successfully. Take into consideration the following elements:
- Equipment or technology
The importance of each of these areas depends on the nature of your company. For example, physical location is most critical to a retail outlet that lives or dies by walk-in customers, while physical location may not matter a bit to an internet based company.
If your plan is for a start-up company, include a description of how you plan for each of the four key operational areas. For established companies, detail what operational changes are necessary to achieve the new goals and objectives detailed in your business plan and how you plan to implement and fund an expansion of your operation.
Process is important because of its impact on productivity and efficiency. Processes done manually that can be done quicker with software or that duplicate work done by other departments can cost a business time and money. Also, business operations processes should be documented department by department so that operations managers can study them to find areas for improvement, consolidation, or cost-savings. Documentation also helps companies train new employees.
Staffing is determined by the processes. Who needs to do the work outlined in the work processes and how many of them are needed? A small business might need a few people who are generalists while a large company will need many more people who are specialists.
it is more important to certain types of businesses than to others and the reasons for choosing a particular location vary. A solopreneur consultant might only need room for a desk at home, a pet groomer will need a location with parking and a software developer will need to be located in a region with access to appropriate talent.
d) The equipment or technology
The equipment or technology needed for optimum business operations will often have an impact on location. The pet groomer with a staff and several grooming bays will need more space and different equipment from the mobile groomer who offers services provided at the pet’s home. A carpet cleaning business won’t need a storefront, but it will need a garage to store its trucks plus office space for business operations management.
How to improve your business operations
a) Review your business plans
A business plan is basically designed to magnetize investors and to provide a blueprint of your business. It must illustrate the goals, objectives, strategies, and suggests modes of operations for your business. It is essential to review your business plan thoroughly. The following tips might help:
- Assess your core activities to know about your succeeding products and services. Figure out problems to make more fundamental improvements.
- Review your finances by considering cash flow, working capital, cost base, borrowing, and growth.
- Conduct a customer market analysis to reveal market changes, new and emerging services, changes in your client needs and competitive activity.
- Use your review to redefine your business goals by using a management consultant or by appointing an experienced non-executive director who can give an impartial assessment of endeavor every day.
- To keep yourself organized you can even use a good business planning software like LivePlan. If you are an iPad user, you can consider the Start Pad app.
b) Hire the right people
Hiring the correct individual is crucial to the success of your business. That is why entrepreneurs ought to have a proper hiring method when searching for new workers. Here are some tips to avoid bad hiring:
- Give a detailed description for each position in the organization that reflects the responsibilities, level of skills and experience required.
- Make an evaluation scorecard to grade and compare the performance of candidates.
- Test candidates by asking them to complete a task that requires the skills for that particular hiring position.
- Look beyond the CV and hire the most potential employee.
- Avoid costly and painful mistakes by putting time and work into finding the right people. Make employee assessment easier by having some sort of automation like human resource information system in place for HR tasks to help the business thrive.
c) Use high impact marketing
Many smaller organizations are trying to get the most out of their marketing with a tight budget as staying in business without a marketing budget would be near impossible. Use the following tips to drive the high impact marketing:
- Leverage online review sites to boost online sales.
- Build a social community.
- Write in a voice that reflects your brand identity.
- Create multipurpose content.
- Make sure your copy is coherent, logical and organized.
- Ask people to take action.
- Optimize for local search.
- Team up and co-host an online event.
d) Improve customer connection
Communicate with your customers more often for better relationships. Moreover, invite them for a catch-up in order to grab the opportunity of taking the relationship to the next level. Here are some tips to rekindle customer love:
- Give an immediate response.
- Build your reputation as a trustworthy business.
- Invest proper time and effort in order to get something out of it.
- Treat every client as your most important one.
e) Motivate your employees
Employees that work with customers on a regular basis probably have smart ideas regarding a way to improve service or the standard of your product. Take time to pay attention to those ideas and seriously think about their implementation.
This motivates workers to focus more, and their ideas may economize and move the business forward. Furthermore, provide performance result for improvisation by using successful response generated techniques described below:
- Get to the main point rather than spending time on the insignificant statements.
- Be certain in tracing what behavior requires amending and offering a real solution on how to develop it.
- Make sure that the employee perceives your assumptions and how his presentation helps the company and the business.
- Never put down the individual.
- Educate your employees in right direction to make them more productive and target-oriented.
f) Put competitive pricing in perspective
In setting a pricing strategy, value has to be the ultimate tool. This helps by providing greater benefits and develops client satisfaction. Operational moves fall in the below 3 basic categories that increase profits and cut expenses:
- Adding lots of new customers.
- Chasing business with technology.
- Creatively discovering ways to expand price, so customers pay extra money.
You can simply improve your business operations by following these approaches. The key is to have a vision of what you want to achieve, where you want to go, and what you want the business to become.
In conclusion, business operations are everything that happens within a company to keep it running and earning money. You have to manage your operations to create the highest level of efficiency possible within your organization. In business, efficiently plays an important part in profit maximization.
In today’s era of hyper connectivity, technology is the backbone of every successful business, irrespective of its size. For your business, the choice of right hardware and software pieces means not only managing your team properly, but also boosting their productivity, getting the most of every project and saving a lot of time and money.
However, getting ahead in today’s business world doesn’t necessarily mean being the biggest company or adopting the latest, most cutting-edge technology. It means choosing the right technology equipment to profoundly impact your business’ daily operations.
Information technology drives innovation and innovation is the path to business success. In fact, both big and small businesses need to use Information technology to speed up production and save both time and money. Today, IT has presented us with endless opportunities to maximize production and profits. In actual sense, IT makes the impossible possible and it makes things less costly.
Primarily, IT is the combination of hardware, software and services that people use to manage, communicate and share information. Also, it can be defined as the application of computers and internet to store, retrieve, transmit, and manipulate data, or information.
Unfortunately, choosing the right set of tools may be a daunting task. Over the past few years, there has been a rapid advance in cloud connectivity, business intelligence, IT services, and various exciting apps and tools, making it even more difficult for startups to choose what options are worth investing in. Below are points to consider when choosing technology for your company:
- Analyze your business needs.
- Choose technology that grows with your business.
- Pay attention to your financial model.
- Who is using your existing IT systems and what are they doing?
- How efficient are your current operations?
- Are there any bottlenecks which cause problems?
- Is your staff getting stuck on less important tasks?
- Are you duplicating effort between departments?
- Are there ways of working faster or tasks that could be automated?
- Is your current technology going out of date or causing compatibility issues?
- Are your business needs or processes likely to change in the near future?
Benefits of embracing IT in your business
a) Efficiency of operations
Technology helps a business understand its cash flow needs and preserve precious resources such as time and physical space. With technology, you work faster and make fewer mistakes. It’s quicker than having to complete tasks manually.
Following that, it is much more efficient to bring your work online and have your teams managing projects using technology. Provide your employees with the right hardware and software to save time and get the job done correctly the first time. This will also save you money because your employees won’t require as much overtime.
Technology protects your business from cyber-attacks and viruses. Your data and information will be quickly compromised if you don’t address and strengthen security on your network and computers.
Being proactive about his subject matter allows you to freely work, share and innovate without having to worry about someone else getting a hold of your important files. Use technology to combat hackers and protect your business.
Basically, in the modern era, most businesses are subject to security threats and vandalism. Technology can be used to protect financial data, confidential executive decisions and other proprietary information that leads to competitive advantages.
Simply put, technology helps you keep your business ideas away from their competition. By having computers with passwords, you can ensure that none of your forthcoming projects will be copied by competitors.
c) Improved communication
Communication is essential in the business world and one of the main benefits of technology for business is the wealth of resources available to communicate quickly and effectively.
With the increasing business adoption of mobile computing devices (laptops, tablets, e.t.c) and software like Voice Over Internet Protocol (VOIP), cloud systems, and Skype conference calls, employees are able to collaborate effectively, even across great distances and work almost anywhere. Doing so reduces travel costs and improves efficiency.
Ultimately, technology affects a firm’s ability to communicate with customers. In today’s busy business environment, it is necessary for employees to interact with clients quickly and clearly. Websites allow customers to find answers to their questions after hours.
Fast shipment options allow businesses to move products over a large geographic area. When customers use technology to interact with a business, the business benefits because better communication creates a stronger public image.
d) Research Capacity
A business that has the technological capacity to research new opportunities will stay a step ahead of its competition. For a business to survive, it must grow and acquire new opportunities. The Internet allows a business to virtually travel into new markets without the cost of an executive jet or the risks of creating a factory abroad.
In the contemporary world, it’s easy to gain brand exposure by hopping online and communicating with your target audience. Websites, blogs and social media make it easy to get your message out there and find the right people who are more likely to become your loyal customers.
Technology is fast, able to reach many people at one time and does not require you to leave your office to advertise. It is however, important to make sure you are receiving the type of exposure you desire by having a marketing strategy in place that helps you build a strong reputation.
Smaller businesses can compete with large businesses by being more swift and agile and responding to change faster. Information technology can improve your company’s efficiency and decrease human error by developing automated processes. With software applications like Quick Books and contact management sites like Sales Force, company bookkeeping and sales tracking can be automated.
In turn, small business owners can focus on their overall business strategy and their employees are free to work on other things while the computer runs their reports, creates queries and tracks projects. This leads to one of the biggest benefits of automation and technology in businesses, productivity.
g) Competitive advantage
In business like in any other area or sector, there is always competition and a need to prove that you are better than your competitors. You have to give your prospects a reason to choose you over others in your market niche. To emerge as the best, you should always be one step ahead.
In truth, in the contemporary world, technology has taken the lead and your business should be able to embrace technological advancements. There is no doubt that technology offers faster and efficient ways of doing things compared to the primary way.
As a result, embracing that saves both time and money. With websites and other social media platforms, there is no need for customers to come at your door step for inquiries or even purchases. Hence, competitive advantage. The idea is to emerge as a better solution provide, hence making profits.
In conclusion, it’s pretty apparent just how many benefits there are from recent technology improvements. Use them to your advantage and get your business running even more smoothly. Being able to adapt and adopt new things gives you competitive advantage, a step to business success.
In today’s highly competitive business environment, there is a constant and never-ending struggle that every entrepreneur faces. Those who can adapt will survive and thrive, resulting in near-boundless financial success and market saturation. Those who cannot see the proverbial forest through the trees, suffer a slow and inevitable death.
The struggle that exists today pits profits against the necessity for total customer satisfaction. In truth, not everyone lives by the credo that the customer is always right. Not everyone is as concerned with customer satisfaction as others are. However, But it is those who do not relent and cave into the pursuit of profits above all else who ultimately win in this ruthless business climate.
Any successful company owner or employees can tell you that quality customer service is a cornerstone to the success of the business. Without a service department that is satisfying customers, loyalty may not form and customers may not return. Poor customer service spreads by word-of-mouth and discourages new customers from trying your product or service.
Primarily, customer service is the act of taking care of the customer’s needs by providing and delivering professional, helpful, high quality service and assistance before, during, and after the customer’s requirements are met. Customer service is meeting the needs and desires of any customer. It can take the form of in-person interaction, a phone call, self-service systems or by other means.
Characteristics of good customer service
Good customer service is a combination of well-trained employees and an efficient system. Customers want to encounter knowledgeable and professional customer service representatives with an efficient system at their disposal to resolve their issues. When that happens, it will go a long way toward helping retain customers and enjoying repeat business.
To work in customer service, responsibility is a must. This responsibility is two-sided, as it covers the agents’ responsibility in attendance, service, loyalty and attitude. It also covers the ability of the agent to take responsibility for mistakes and results as well as to know that their own actions determine the results in customer situations.
Each need, question or concern must be addressed in a quality customer service manner. Bypassing a question because the answer is not known can leave a customer feeling ignored. Many service-related inquiries are multi-faceted so it is important to fully respond to one inquiry before moving to another.
Your customer service agents should be completely knowledgeable in the department/product/service for which they are responsible. Along with this knowledge comes confidence, which leads to customer satisfaction. If a situation arises where an agent does not know an answer, he or she must be willing to admit not knowing and find the answer or pass the client to a representative that can answer the question.
A customer service representative should work through a situation to its completion. Instead of being quick to hand off the problem or hesitant in working through a customer’s needs, the agent should be thorough and work through each situation step-by-step until it is resolved.
Customer service is at its best when it is prompt. Allowing a customer to sit on hold or wait in the store for an available representative is unacceptable in business. The timely response to a request, question, concern or problem is the first step to a solution. This may not always be speedy, but it should be efficient and thorough.
Any information relayed from a customer service representative to a customer must be 100 percent accurate. Whether it is instructions on assembly or performance, or information on warranties, everything must be factual. Along with accuracy in fact, the representative should be precise in the actions performed on the customer’s behalf.
Empathy is the ability to understand and share the feelings of another. It is more of a character trait than a skill. Even when you can’t tell the customer exactly what they want to hear, a dose of care, concern and understanding will go a long way. A support representative’s ability to empathize with a customer and craft a message that steers things toward a better outcome can often make all the difference.
9. Good communication skills
Customers do not need your life story or to hear about how your day is going. More importantly, you need to be cautious about how some of your communication habits translate to customers, and it’s best to err on the side of caution whenever you find yourself questioning a situation. When it comes to important points that you need to relay clearly to customers, keep it simple and leave nothing to doubt.
10. Persuasion skills
Experienced customer support personnel know that oftentimes, you will get messages in your inbox that are more about the curiosity of your company’s product, rather than having problems with it. To truly take your customer service skills to the next level, you need to have some mastery of persuasion so you can convince interested customers that your product is right for them (if it truly is).
However, it is not about making a sales pitch in email, but it is about not letting potential customers slip away because you could not create a compelling message that your company’s product is worth purchasing.
Reasons why Good Customer Service is important in business
Customer service is of critical importance to your business because it’s key to retaining the customers you close and extracting more value from them. By providing top-notch customer service, businesses can recoup customer acquisition costs and cultivate a loyal customer base that will refer friends and colleagues, serve as case studies and testimonials, and write customer reviews.
These days, people will only stay loyal to a company if they have very good reason to. Otherwise, there is plenty of competition available they could choose to move to. As a result, you have to work even harder to keep customers and build their trust in your brand. By providing the best in customer service, you will increase trust, and that could mean the difference between customer loyalty and customers who jump ship.
a) It builds trust
These days, people will only stay loyal to a company if they have very good reason to. Otherwise, there is plenty of competition available they could choose to move to.
As a result, you have to work even harder to keep customers and build their trust in your brand. By providing the best in customer service, you will increase trust and that could mean the difference between customer loyalty and customers who jump ship.
By providing stellar customer service, you can differentiate your company to customers. Loyalty is rooted in trust, and customers can trust real-life humans more than the ideas and values of a brand. Therefore, by interacting with your customer service team, those customers can build, hopefully, life-long relationships with your business.
b) It builds brand awareness
Word of mouth is the most powerful ally you have on your side. What your customers say to others could make or break your business. When you provide the best in customer service, people will talk about you. They will remember your brand. If they hear someone else talking that they need a specific kind of company, they are much more likely to refer them to you.
c) To reduce business problems
Problems are always going to arise for any business no matter how hard you try to avoid them. While you can’t run a perfect business with all the perfect customers, you can ensure friction doesn’t become an issue.
If customers know that they can voice complaints and those issues will be handled properly, they will feel more comfortable doing business with you. When it comes to a business, nothing matters if you offer poor customer service.
d) For customer retention
Customer retention is far less cheap than customer acquisition. On average, it costs approximately five times more to attract a new customer to your business than it costs to retain an existing customer.
That logic on its own should highlight the importance of providing excellent customer service. Why risk losing a customer? It’s costly enough to locate new customers in the first place, and every business should do whatever it takes to ensure they stay happy and continue doing business with them.
e) It represents your brand image, mission and values
It doesn’t matter how you perceive your brand. What matters is how your customer perceives it. You may have an idea of what your brand represents. However, your customers will make assumptions based on your social media presence, advertisements, content and other external marketing.
Your customer service team, however, is your connection to your customers. Thus, that team has the responsibility of representing your brand to them. Without your customer service team, you have no means of direct communication.
Due to this, your customer service team is essential in relaying to customers what you want your brand image to be. They can help influence customers and convince them of your strengths over competitors.
Again, taking care of your customers conveys a strong set of moral values and beliefs in the company’s mission. It means that it’s transcending the necessity for profits by focusing on building its tribe.
Again, it means that there are greater forces at work here than mere profits. It’s indicative of a deeper desire to build something of value, to help others, and to somehow, in some way or another, change the world a bit by doing so.
f) It makes customers willing to pay more
Fifty percent of customers increase their purchasing with a brand after a positive customer service experience. In fact, 86% would pay up to 25% more in order to get a better customer service experience. Clearly, customer service matters so much to customers that they would literally pay more to interact with a brand that does it well.
These are statistics that can’t be ignored. In an era where companies are learning to prioritize customer service, any company that does not do so will crash and burn. Customers are influenced by even a single experience. One positive experience could be the deciding factor for them to stick to a brand, whereas one negative one could send them running to a competitor.
g) It opens doors for new partnerships and opportunities
Treating your customers like gold is infectious. It opens the doors for new partnerships, especially when other businesses see just how well you take care of your existing customers.
It says a lot about a company and what they value when they care deeply about their customers. It’s something that you rarely find in business these days, but it most certainly paves the way for powerful partnerships, collaborations and other opportunities.
h) It elongates the life of any business
Today, only four out of every 100 businesses last through until the 10-year mark. That’s a massive 96 percent failure rate. When you ignore the needs of your customers and you don’t focus on going out of your way for them, you are cutting short the potential for longevity in business.
With so many obligations and responsibilities, if you are serious about your business, you have to focus on the core objective, your customers. In truth, without them, you have no business at all.
In conclusion, it is undeniable that a well-trained, positive customer service team can make your company the best version of itself. Their ability to communicate directly with customers can totally revolutionize your company and grow your customer base.
Intellectual property (IP) refers to creations of the mind such as inventions, literary and artistic works, designs and symbols, names and images used in commerce. IP is protected by the law which enables people to earn recognition or financial benefit from what they invent or create. By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish.
Primarily, Intellectual Property is divided into two categories namely Industrial Property and Copyright. Industrial property includes patents for inventions, trademarks, industrial designs and geographical indications.
On the other hand, copyright covers literary works (such as novels, poems and plays), films, music, artistic works (e.g., drawings, paintings, photographs and sculptures) and architectural designs. Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings and broadcasters in their radio and television programs.
Most importantly, intellectual property protects more than just an idea or a concept, it protects genuine business assets that may be integral to the core services of the business and overall long-term viability. These are differentiate your business offering from others. It is when these ideas are used without permission that an organization can suffer.
a. Industrial Intellectual Property
A patent is an exclusive right granted for an invention. Generally speaking, a patent provides the patent owner with the right to decide how or whether the invention can be used by others. In exchange for this right, the patent owner makes technical information about the invention publicly available in the published patent document.
However, protection is granted for a limited period, generally 20 years. In addition, patent owners may give permission to, or license, other parties to use their inventions on mutually agreed terms. Owners may also sell their invention rights to someone else, who then becomes the new owner of the patent.
Once a patent expires, protection ends and the invention enters the public domain. This is also known as becoming off patent, meaning the owner no longer holds exclusive rights to the invention and it becomes available for commercial exploitation by others.
A trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises. Your brand needs to be protected because you do not want to invest time and money only to find out later on that you have to switch to a different trademark because someone else already using your trademark.
Primarily, trademarks protect brands. The name of the product associated with the product or a service is called the trademark. It is anything by which customers can identify a product or the source of a product, such as a name associated with the product. Typically, that would be the words that you use to refer to your product or service. When the brand or trademark is made up of words, it is referred to as a word mark.
In addition, other things can serve as your trademark. For example, sounds, colors, smells and anything else that can bring the product and/or its owner to the minds of a consumer can serve as your trademark. The most common types of trademarks are word marks, logos and slogans.
If the product configuration (e.g. a Coca-Cola® bottle) or packaging (e.g. Tiffany’s blue packaging) are nonfunctional and recall the product’s maker (i.e. source of the product) for consumers, the configuration can be protected and registered as a trademark.
Most importantly, to properly protect your trademark, you should conduct a search to find out if others are using a similar mark to yours. If not, then file a trademark application to get your trademark registered.
iii) Industrial Designs
An industrial design refers to the ornamental or aesthetic aspect of an article. A design may consist of three dimensional features such as the shape or surface of an article or two dimensional features such as patterns, lines or color.
Industrial designs are applied to a wide variety of industrial products and handicrafts, from technical and medical instruments to watches, jewelry and other luxury items. Also, they include house wares and electrical appliances to vehicles and architectural structures, from textile goods to leisure goods.
However, to be protected in most national laws, an industrial design must be new or original and non-functional. This means that an industrial design is primarily of an aesthetic nature and any technical features of the article to which it is applied to are not protected by the design registration although those features could be protected by a patent.
iv) Geographical Indications
A geographical indication is a sign used on goods that have a specific geographical origin and possess qualities or a reputation due to that place of origin. Most commonly, a geographical indication consists of the name of the place of origin of the goods. Agricultural products typically have qualities that derive from their place of production and are influenced by specific local geographical factors, such as climate and soil.
Whether a sign functions as a geographical indication is a matter of national law and consumer perception. Geographical indications may be used for a wide variety of agricultural products, such as, for example, “Tuscany” for olive oil produced in a specific area of Italy, or “Roquefort” for cheese produced in that region of France.
The use of geographical indications is not limited to agricultural products. They may also highlight specific qualities of a product that are due to human factors found in the product’s place of origin, such as specific manufacturing skills. The place of origin may be a village or town, a region or a country.
An example of the latter is “Switzerland” or “Swiss”, perceived as a geographical indication in many countries for products made in Switzerland and, in particular, for watches.
Copyright is a legal term used to describe the rights that creators have over their literary and artistic works. Works covered by copyright range from books, music, paintings, sculpture and films, to computer programs, databases, advertisements, maps and technical drawings.
The images and words on the product packaging, the label, the product itself and the web page can all be protected with a copyright. The advantages of a copyright registration are that it is inexpensive to secure and the law allows you to demand a fee from infringers.
Primarily, copyrights protect original works of authorship that are fixed in a “tangible medium of expression.” This means that the authored or creative work has been written down on a piece of paper, saved on an electronic storage device (e.g. hard drive or flash drive), or preserved in some other tangible format. Examples of copyrightable works include movies, videos, photos, books, diaries, articles and software.
Copyright does not protect ideas or useful items, which is the function of patents. Although software is a functional item, it can be protected by copyrights due to the creativity used in the selection, ordering and arrangement of the various pieces of code in the software.
In addition, the copyright holder(s) of a work can authorize or prohibit: its reproduction in all forms, including print form and sound recording, its public performance and communication to the public, its broadcasting, its translation into other languages and its adaptation, such as from a novel to a screenplay for a film.
Works covered by copyright include, but are not limited to: novels, poems, plays, reference works, newspapers, advertisements, computer programs, databases, films, musical compositions, choreography, paintings, drawings, photographs, sculpture, architecture, maps and technical drawings.
Reasons why it is important to protect intellectual property
Almost all businesses have undoubtedly benefited from the internet, where products, services and marketing communications can reach vast audiences at relatively low costs or none at all.
However, this has also increased the chances of intellectual property theft. Companies of all sizes are at risk of having their unique ideas, products or services infringed upon, even if they are on the other side of the world, making intellectual property protection more important than ever.
a) To keep your ideas
When you have a great idea for a product or service, there will always be people who will want to duplicate your success and sell your ideas as their own. Depending on individual circumstances, you can use patents, trademarks or copyrights, all of which cover different areas of intellectual property. These can be used to prevent competitors or anyone else from using your ideas for their own profit without your consent.
b) To protect business growth
If you are a small business, it is very important to protect any unique products or services that you own as competitors can use your success to take away market share, resulting in slow growth or loss of revenue.
Losing market share early in a business’s development can be devastating and time consuming if you try to chase up the guilty party without any legal protection. It is important to remember that no one else will check to see if your intellectual property has been infringed, it’s your responsibility to ensure that no one else is using your assets.
c) To promote innovation
When an idea, product or service is registered and protected as an intellectual property, it is very helpful to an economy. When products and inventions are protected, it pushes other individuals to start their own things, hence an increase in innovation. In fact, innovation plays a pivotal role in a country’s economic success.
d) For your business goodwill
Trademarks function by serving as source identifiers to consumers. As such, it is important to ensure that your brand and the trademark that appears on your products is backed by the quality and control that made it popular with consumers in the first place. This positive rapport with one’s consumer bases is known as goodwill, which can take a long time to build indeed. Loss of goodwill can be fatal to a trademark and a business.
e) To make money by selling it
When you have a well-established and known business, you will make a lot of money when you sell it. An example is that of the Apple brand. The trademark and the apple logo is associated with value and class. If the company decides to sell it, there is no doubt that they are going to make millions of money out of it.
f) To earn royalties by licensing it
Royalties are payments of various types to owners of property for use of that property. Royalties usually deal with payments for the right to use intellectual property, like copyrights, patents, and trademarks. In music, royalties are paid to owners of copyrighted music, for its use. These are called performance royalties.
In art and online, royalties may be paid for the use of images (sometimes called “stock photography”). Another type of royalty is a book royalty, paid to authors by publishers.
Patented products are commonly licensed and royalties are paid to the patent holders. In franchised businesses, the franchise holder pays franchise royalties to the main company for the use of the name and other assets.
Royalties may also be paid in the context of rights to take minerals from the property of someone else. These are often called mineral rights, rather than royalties, but they work the same way. Therefore, by registering or applying for the protection of your intellectual property, you get royalties every time an individual or company uses your invention.
In conclusion, it may seem initially daunting or time consuming, but protecting your IP is well worth the time and effort. Whilst you cannot protect an idea itself, you can protect the means by which you put the idea into operation and this is what you would protect using Intellectual Property (IP).
Compliance often gets a bad rap because it is immediately associated with laws, constraints, inspections, audits and penalties for those who do not follow the rules. The word compliance in itself often conjures up thoughts of what organizations must do rather than what they want to do, and to be honest, doing the right thing isn’t always fun.
However, legal compliance allows your organization to become a lean, mean and high-performance machine. In other words, being compliant is not only the right thing to do, it also makes good business.
Primarily, legal compliance is a set of rules or laws that establishes standards and boundaries for corporations and other entities. It is the processor procedure to ensure that an organization follows relevant laws, regulations and business rules. Also, it includes understanding and adhering to ethical codes within entire professions.
Compulsory statutory institutions for all startups include
- Registrar of Companies – for business incorporation.
- NSSA – for pension and workers compensation insurance and help with monthly returns.
- ZIMRA – for tax purposes.
- NEC – or employer/employee dispute management and help with monthly returns.
- City Council – for shop/municipal licenses.
- ZIMDEF – for manpower development and help with monthly returns.
Compulsory statutory institutions for specific industries
- MCAZ (applicable to pharmaceuticals and pharmacies) – for protecting public and animal health by controlling medicine distribution.
- RBZ (applicable to micro-finance institutions) – for the formulation and implementation of monetary policies.
- POTRAZ (applicable to private telecommunication network companies) – for regulating the telecommunications sector.
- ZERA (applicable to gas and petroleum companies) – for regulating the entire energy sector in Zimbabwe.
Reasons why you should be compliant with the law
a) To build a positive reputation
The success of your business pretty much depends on its public image. When a company starts facing several court cases, the general public will lose their trust in the company and sales in products and services will eventually drop.
Compliance will ensure that your company upholds a positive image and build consumer trust. This also helps build consumer loyalty, since customers are more likely going to return to a service or product from a company they identify as trustworthy.
In addition, this also helps a business with sponsors, advertisers and government requirements. A business that fulfills regulatory business compliance through successful corporate compliance management generally gets signed quickly and easily whenever needed. They also pull through incidents like individual court cases discreetly before it grows into a public concern.
b) To establish customer trust and brand loyalty
In business reputation matters. Gaining a reputation as an organization that fails to meet its compliance obligations can jeopardize customer trust and loyalty. In fact, reputational risk is the main driver for regulatory compliance. Reputational risk is so important that being transparent, even about your faults, will improve customer perception and can lead to increased stakeholder engagement.
Again, legal compliance shows your commitment to doing business the right way and to the highest ethical standards. Many consumers seek out and want to do business with vendors and suppliers who share their values and compliance principles.
For example, when a company can demonstrate a conflict-free supply chain, stakeholders are reassured that the company is compliant and will impart confidence among suppliers, customers and partners, which can help establish lasting and trusted business relationships.
c) For higher company productivity
Internal compliance to safety, wages, employee benefits, compensations and employee protection will create a positive environment in the work area. Employees are more fervent to work when they feel that that they are well compensated for their efforts and that they are safe within the business’ reach.
It is important that ensure that compliance is adhered to, since it ensures that employees are satisfied and that all complains or issues are monitored and addressed properly before they grow and affect the entire corporation. There will always be set rules to make sure everything is fair and safe for the company, its staff, its consumers and even its competitors.
d) To avoid criminal charges
This is, perhaps, the most beneficial importance of compliance in a business. No business wants to face criminal charges for not adhering to the law.
There are so many different regulations and laws in regards to how a business should manage its staff, how stock is handled, how advertising is handled, the rules of engagement when buying and selling, rules on negotiating with customers, on employee salary, safety rules and so forth. With a proper compliance kit and proper compliance management your company can stay on the light side of the law.
e) To foster best practice
Compliance can be used as a means of encouraging businesses to adopt rigour and best practice in areas where the inclination may be to cut costs and corners, such as privacy protection, good record keeping and IT processes. There is nothing like an upcoming audit or the possibility of a hefty fine to motivate an organization to review and improve its practices.
f) To improve supply chain awareness
Third-party compliance risk management is the most challenging aspect of an organization’s program for managing compliance risk. Regulations that mandate compliant supply chains force firms to take a hard look at their third-party community, which is a good thing. It is an opportunity to better manage the supply chain ecosystem.
g) To establish better information governance
Good record-keeping is central to a strong compliance program. Business records provide the evidence to demonstrate compliance to regulators, auditors and the public. Having an effective information governance program means a company’s information assets are consolidated, categorized and analyzed, leading to better strategic decision-making.
h) To attract and keep the right talent
Legal compliance improves your business’ ability to attract and retain highly principled and higher quality employees, improving employee morale, job satisfaction and retention rates. Job seekers are not keen on working for companies that do not take ethics and compliance seriously. Therefore, in order to be an employer of choice, give people a reason to choose your company instead of your companies.
i) To boost bottom line
A number of studies have found that companies with strong governance and compliance cultures perform better than their counterparts. Presumably, an organization that spends less time dealing with regulatory infractions has more time to focus on initiatives that improve competitive positioning and help gain market share.
Another and perhaps more obvious conclusion to be drawn is that avoiding compliance penalties simply leads to a healthier bottom line.
In conclusion, compliance can help ensure the longevity of the business. Compliance will ensure that your company upholds a positive image and build consumer trust. This also helps build consumer loyalty, since customers are more likely going to return to a service or product from a company they identify as trustworthy.
Business systems and processes play a significant role in building a company. They serve as the company’s essential building blocks and support. Systems are the way you do things. They are the procedures that can be replicated. Effective business systems can be created for all kinds of work performance that occur in your organization. Hence, it is important for every entrepreneur to incorporate them in their business.
Primarily, a business system is a methodical procedure or process that is used as a delivery mechanism for providing specific goods or services to customers. Creating a gamified system is a great way not only to identify which issues require the most critical attention, but it’s also a great way to encourage and motivate.
Again, a business system can be defined as a procedure, process, method or course of action designed to achieve a specific result. Its component parts and interrelated steps work together for the good of the whole. Creating effective business systems is the only way to attain results that are consistent, measurable and ultimately benefit customers.
Basically, having effective business systems is the only practical way to manage the important details of your operation. These details are found in lower-level subsystems.
For example, your marketing system may have a subsystem called lead generation. The lead generation system could have subsystems such as direct mail, telemarketing or radio advertising. Systems and subsystems are the workhorses that deliver consistent results, even when you are not around.
However, in practice, business systems do not always work so smoothly. That is why breaking down and analyzing your process can allow you to gain new insight over what really matters. Ultimately, it’s about looking at the end result and how to get there.
As you formalize your systems, the time you spend focusing on the details of a job become invaluable, as you critically examine each step of a process, you are also determining whether certain areas need improvement. This is a key component of the process because business systems need to be reviewed and improved as the ways of doing business change.
Most importantly, it is key to consider the efficiency and accuracy of the business systems. This way, the business’ principles and implementation become a lot clearer and easier. Systems also enable you as an employer to monitor and manage their staff. It allows them to interact with each other and connect them to the operational strategies of the business.
Reasons why business systems are important
a) For business growth
Business systems and processes help the growth of a business. Business owners need them to grow. Aside from that, they also enhance performance and help implement strategic planning, creation, and operation.
In truth, using a systematic approach also allows you to meet the expectations of your clients. It also makes knowing the strengths and weaknesses of your organization more conveniently monitored, leaving you better aware of what needs improvement and understand customer needs you haven’t met.
b) For business efficiency
To ensure the efficiency and consistency of results, systems and processes are essential. This also improves the employee performance and creativity. It opens a new avenue of personal engagement between the employees as well as the clients.
Finally, business systems have the capacity to reduce costs and boost revenues by producing consistently high quality work. Combined with all the other factors, business systems and processes help grow a business.
c) To provide consistency
With business systems, you can produce the same products and services with the same level of consistency. Once you have created your systems and written down the sequential steps, your employees can follow the proper procedures consistently.
You can monitor these processes and improve them when necessary. Systems can be implemented for sales, marketing operations and employee training. The people who benefit the most from having systems in place are your customers who know what to expect from your business.
d) To create business value
Effective business systems become a part of your company’s organizational infrastructure. If you are selling your business, formal procedures add value. Buyer can see that operations run smoothly and consistently; new hires can be quickly integrated.
e) To accomplish change easily
Systems make a business predictable. So when change impacts your business, which may often occur, then knowing what business systems need to be modified becomes easier. You will know the current work process and can predict how change should be handled while still maintaining your systems.
Once your systems become part of a flow chart, or are written as a set of sequential tasks and procedures to follow, they become easier to monitor. You will notice that tasks will be completed properly and efficiently and changes can be more quickly addressed.
f) To allow staff to focus on what they do best
Any time you are trying to complete a project with a specific deadline, you will want to avoid any problems that may develop. Create business systems that also best match the employee talent that is available. Allowing people with specific skills, knowledge and abilities to be responsible for those parts of the business gives room for better quality of work.
That way, everyone then can focus on what they do best. Once business systems are established and implemented, activities can be performed on “autopilot.” Repetitive activities in your business become routine and you can focus on other activities with higher payoffs.
g) Training new employees becomes easier
New hires can be quickly integrated into your business when there is a written set of procedures for them to follow. Also, they will know exactly what is expected from them. It becomes easier to gauge the effectiveness of an employee when you have a measurable set of guidelines to review.
h) To provide a framework of business operations and an effective structure for support
If you use the systematic approach, you will have a specific marketing system that will have a subsystem to watch the expectations and satisfaction of your customers. This subsystem will analyze, measure, compare and give you possibilities to make specific conclusions about what your customers want and what they resent about your current product or service.
In such a way, you will have constant information about things that need to be improved. Most importantly, you will know how to improve them properly.
i) To increase profitability
By improving business productivity and performance you will be reducing your costs. However, it is not all. You will satisfy the expectations of your customers by delivering the same or better results every time. You will have a better internal organization and constant problem-solving process. As a result, you will simply increase the profitability of your company.
In conclusion, good business systems take waste and inefficiency out of your business and help you give customers what they want every single time. Business systems are the solutions to weak sales growth, low profit margins, customer dissatisfaction, poor performance, excessive costs, inadequate cash flow, employee turnover and daily work frustrations.
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Manage your money in such a manner that accomplishes the organization’s objectives. Financial management of your business is more than keeping an accurate set of books and balancing your business checking account. You must manage your finances so you don’t overspend as well as that you remain prepared for all expenses. Your financial management responsibilities affect all aspects of your business. A company that sells well but has poor financial management can fail.
The following are the four components of good financial management:
- a plan for generating income by establishing a range of funding (diversifying your sources of income).
- a powerfully built financial management system.
- a suitable internal environment, that is, suitable employees and management.
- a clear finance strategy ( the money you will need and where it will come from).
Financial management encompasses a lot of factors and you should consider the following;
Financial management helps to determine the financial requirements of the business current and future operations which helps you to plan for your finances, that is, budgeting.
Acquisition of funds
Financial management also involves the acquisition of required finance for operations of the business. Acquiring needed funds play a major part of the financial management, which involve possible source of finance at minimum cost.
Proper use of funds
Proper use and allocation of funds leads to improve the operational efficiency of the business. When you use your funds properly, you increase the money available to acquire new assets which therefore increases the value of the firm.
Financial management helps to make sound financial decisions four your business. Financial decision will affect the entire business operations because there is a direct relationship with various department functions such as marketing, production personnel, etc.
Profitability of your business purely depends on the effectiveness and proper utilization of funds. Financial management helps to improve the profitability position of your business with the help of strong financial control devices such as budgetary control and analysis of your financial statements.
Savings are possible only when your business earns higher profitability and maximizes wealth. Effective financial management helps to promoting and mobilizing individual and corporate savings.
Manage your staffing, employee compensation, communication, training, employee benefits, and job definition and design.You should provide leadership and advice for dealing with all issues related to the people in your business.
Managing your human resources is also a strategic and comprehensive approach to managing people and the workplace culture and environment. Effective management of your company’s human resources will enable employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization’s goals and objectives.
Obviously you want your business to be known as the “employer of choice” by receiving recognition for the way your business treats employees. This makes people want to work for your company. Becoming an employer of choice means human resources balances recruiting the most qualified applicants, selecting the most suitable candidates and retaining the most talented employees.
Apply, track and review your company’s marketing resources and activities. Marketing includes product research and development, advertising and other promotional activities, and product sales and service. There are so many benefits of managing your marketing and the include the following;
Marketing is a learning aid
Marketing research aids your company in learning about your customers, the marketplace, industry and products. Your business only succeeds if you manage to motivate your targeted customers to buy the products and services you develop and offer. To do so, you need to figure out your ideal customers, analyze their needs and motives, and get familiar with the benefits you offer that match well.
Marketing promotes your present offering
Without marketing, your target market will not know that you have the best product ever invented or the greatest service solution imaginable. The promotional component of marketing is key in getting the word out to target customers that you have something beneficial to offer them at a great value. You need to let your target market know that you exist and then promote your brand benefits in a competitive marketplace to encourage buying.
Communication with your customers has become a key focus of marketing. Personal selling and social media are prominent promotional tools that your company should use to get a more direct audience with customers. These tools offer personalized routes to individual customers and allow for immediate response.
Coordinate your people & resources to reach the company’s sales goal. Managing your sales actually begins with making sure that your company is developing the right products, setting the right prices and distributing in the right places. When managing your sales you should include the following;
Select your targets
Your responsibility is to make sure that your audience is made up of decision makers who can approve large opportunities that will come to fruition in the near future. This will help you establish a filter that helps to define the most likely candidates with a potential of higher sales.
Clarify your priorities
Help your sales force prioritize what opportunities they pursue and how much time and effort they spend on each opportunity. You should keep key opportunities that are real and relevant to the current circumstances as a goal in your sales plan.
Monitor your marketplace
Find out what is going on in the marketplace based on the data you’re getting from the sales records. Analyze the gathered data and use that information to produce products or offer services that best suit your market.
Organize and supervise the way that your company functions. The administration of your business includes the performance or management of business processes and decision making, as well as the efficient organization of people and other resources, to direct activities toward common goals and objectives. Make sure that your business meets its goals and is properly organized and managed.
Purchasing / Procurement
Purchasing / Procurement
Forecast demand, evaluate inventory levels, and take orders from within the organization. You should ensure that all goods, supplies and inventory needed to operate the business are ordered and kept in stock. You are responsible for controlling the cost of the goods ordered, controlling inventory levels and building strong relationships with suppliers.
Value for your money
Ensure that what you buy has high value for the company because it is a key purchasing function depending on your strategic business goals. If you want to grow your business by offering low-cost goods, a matching purchasing management objective is to negotiate low supplier prices. If you want to increase profitability by charging premium prices for the highest quality, then you will have to ensure that your suppliers deliver the best products available.
Create long-term relationships
When you have long-term or exclusive relationships with suppliers, you often obtain lower prices, more reliable service and improved support. Your business strategy may be more effective if supported by such relationships. Purchasing objectives should include the pursuit of long-term relationships if they might be a strategic asset. If your strategy is to deny your competition access to a supplier, your purchasing management may have to negotiate an exclusive supply agreement.
A strategy of continuous improvement and increased efficiency can only succeed if supported by your purchasing management objectives. Your suppliers have to undergo continuous evaluation, subject to standards similar to those for internal business processes. Set purchasing management objectives that include benchmarks for suppliers according to their product failure rates, on-time delivery percentages, and competitiveness. Continuous evaluation against such benchmarks lets you identify preferred suppliers and those with exceptional performance.
Information technology system integration
Your business can reduce costs if your suppliers can integrate their information technology system functions with yours. For example, instead of a supplier having to ask your staff whether your stock of the supplier’s products is running out, the supplier’s IT systems can access your warehouse records directly and automatically ship more products when stock runs low. Strategically plan for purchasing management to support this direction and consider such integration possibilities when selecting suppliers. Specific purchasing objectives might be to automate supply of products you need regularly; automate receiving, invoicing and payments; and integrate your system’s tracking of quality issues and customer support with that of key suppliers.
Implement business practices that create the highest level of efficiency possible within your organization. You should be concerned with the day to day activities that drive the firm’s growth such as evaluation of the available alternatives and then picking the best. Your objectives can be as follows;
- Quality: It is the measure by which it is said that the product or service is meeting customer expectation.
- Speed: It reflects the time between the customer request and product or service delivery.
- Dependability: This is all about reflecting whether the business can deliver product or service that was promised to the customer.
- Flexibility: Review how the operation process can adapt or change its operational procedures.
- Cost: Operational costs are an important factor that affect the final price of the product or service and how it becomes affordable to the customer. This will finally affect the profitability of the business.
Acquire and manage your I.T resources according to your priorities and goals. I.T refers to all the hardware and software that people use to send and receive information. Information technology will help to improve your business processes as well as achieve cost efficiency. Also, It will drive revenue growth and maintain a competitive advantage in your marketplace because of the following reasons;
You gain competitive advantage
The benefits you achieve from information technology such as cost saving, rapid product development and process improvements help your company to gain and maintain a competitive advantage in the marketplace. For example, when Apple announced a new smartphone with innovative touch-screen features, Samsung quickly followed suit with a similar kind of smartphone or they risked losing market share. Therefore, you business can use rapid prototyping, software simulations and other IT-based systems to bring a product to market cost effectively and quickly.
You reach the market faster
Information technology can speed up the time it takes new products to reach the market. Your company can draft the requirements for your new product faster by gathering market intelligence from your databases, customers and sales representatives.
You partner easily with your stakeholders
Stakeholder integration is another important benefit of information technology. You will be able to integrate and communicate easily with your stakeholders such suppliers, customers and shareholders. Public companies such as CBZ and Old Mutual use their investor relations websites to communicate with shareholders, research analysts and other market participants.
Manage the company’s provision of service to customers before, during and after a purchase. Customer services refers to practices, strategies, and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with customers, assisting in customer retention, and driving sales growth.
- Customer services provides more accurate customer data in relation to customer preferences and purchase history. This will help you to assess your business performance.
- The more you know about your customers’ needs and wants the better able you are to provide the solution to their next problem.
Administer the company’s intellectual property assets such as trademarks, copyrights, patents, industrial designs and geographical indicators.
- A trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others. For example, the tick symbol is associated with Nike.
- Copyright is the right to copy. This means that you and anyone you give authorization to are the only ones with the exclusive right to reproduce your artistic or literary work such as advertisments.
- A patent prevents others from using, making or selling your specific invention or innovation, that is, your new way of doing something or new technical solution to a problem.
- An industrial design protects your three dimensional features, such as the shape of an article, or two dimensional features, such as patterns, lines or color. Think of the coca-cola bottles.
- A geographical indication right enables a company like Schweppes to prevent the use of the term Mazoe by a third party whose product does not conform to the specific geographical origin which is Mazowe.
There are many advantages of securing your intellectual property rights. For example, protecting your IP can help you:
- Enhance the market value of your business – IP can generate income for your business through licensing, sale or commercialization of protected products or services. This can in turn improve your market share or raise your profits.
- Turn ideas into profit-making assets – Ideas on their own have little value. However, IP can help you to turn ideas into commercially successful products and services. Licensing your patents or copyright, for example, can lead to a steady stream of royalties and additional income that can boost your business’ value.
- Differentiate your business’ products and services – Intellectual property is essential in creating an image or brand for your business. Think trade marks, logos or the design of your products. IP can help you differentiate your products and services in the market and promote them to your customers.
- Access or raise finance for your business – You can monetise your IP assets through sale, licensing or using them as collateral for debt financing. As well as this, you can use your IP as advantage when applying for public or government funding, eg grants, subsidies or loans.
Acquire application software packages that support business processes and information flows. Most companies are looking toward technology, such as enterprise systems, for solutions that improve their workflows and customer service process.
Store business data in a usable format
You improve customer experience by having data stored in a way that can be easily analyzed. Some examples of data that should be stored include customer order history, when and how they made those orders, and how long it took for those orders to be processed. A company’s ability to quickly retrieve this type of information in order to answer customers’ questions can go a long way toward improving customer satisfaction.
Reduce the cost of doing business
Enterprise systems ultimately reduce the cost of running a business, which means your company will have more of its budget free to increase customer service capabilities or invest in other assets that can improve the customer experience. One example is inventory control, as keeping too much or too little inventory can have a significant effect on your business’ financial performance.
Improve supply chain management
Enterprise systems can help to make the supply chain management process more efficient, through the use of data about where, when, and how customers order and suppliers deliver. This again emphasizes the importance of storing business data in a usable format. Ultimately, the ability to streamline the supply chain means that products are delivered to customers more reliably, and at a lower cost, than would otherwise be possible.
Business systems give your employers, and especially managers, the tools they need to create more accurate forecasts. Since the information within business systems is as accurate as possible, businesses can make realistic estimates and more effective forecasts.
No more issues with data spread across separate databases; all information will be housed in a single location. This means you can integrate your business systems, for example, integrating your CRM software with your ERP system. As a result, you keep data consistent, accurate, and unique. You also get to know your customer, their orders, and your inventory, all in one place.