Important Lessons I Learnt From My Husband – About Running A Business
Just like all other Australian women, the desire to run successful businesses has led me develop keen interest on successful management of a business. Indeed, we all know that running a successful business is not a walk in the park especially because you have to beat the prevailing cutthroat competition in the sector concerned. However, with the following important things that I learnt from my husband about running a successful business, I believe that every woman can start and run a successful business in anywhere in the world.
Coming up with a good business plan and following it religiously
The ability to run a business lies squarely on the roadmap or business plan of the business. This is the document that sets out the vision/idea of the business and the relevant considerations and strategies of a business start-up or existing business. In this regard, my husband taught me that it is important to write down the ambitions, goals and visions of the business in the business plan and ensure that all my activities in the business are geared towards the achievement of these goals.
Entrepreneurs draw up business plans for new ventures or plan on improving the existing ones to make various marketing, pricing, financial, and other projections. More often than not, though, their estimates bear little relationship to reality. In this case, planning for new enterprises differs fundamentally from planning for existing enterprises, given the inherent instability of start-ups. As a businessperson, one should be prepared to face the unknowns they expect to face in the business. Thus, identifying milestones over the project’s life enables businesspeople to both learn from experience about the enterprise’s viability and make adjustments in strategy and goals as necessary. There is a variety of typical milestones that new and old businesses pass, including concept and product testing, first financing, market testing, production start-up, and competitive reactions. At each stage, a keen business person must match his or her assumptions with actual outcomes and determine whether and how to proceed to the next milestone.
Proper management and organization.
Management and organization are the most involving aspects of running a business successfully. It encapsulates all business operations from the business idea to the expected maturity of the business. It is through proper management and organization that a business determines which opportunities to pursue, performs SWOT (Strength, Weaknesses, opportunities and Threats) analysis and identifies competitive advantages.
Other aspects of management include:
- Bringing all the factors of production together
- Coming up with an organizational chart
- Proper staffing
- Identifying the key personnel
- Training and development of staff
- Offering financial and non-financial rewards to the employees
The financing policy adopted determines the direction of the business in terms of success or failure. It is important to note that all businesses go through the four cycles of business development, including depression, growth/expansion, boom and maturity. In this case, financing the business should be done according to the level of the business. Choosing the financial option that will not lead to accumulation is as right as rain, not forgetting the need to ensure that you do not bite what you cannot chew comfortably.
The financial data to keep includes:
- Investment appraisal – payback and discounted cash flow
- Break even analysis
- Evaluation criteria for performance review
- Ratio analysis: net profit margin, Gross profit margin, return on capital employed, liquidity and solvency analysis
Performing sensitivity analysis frequently.
It is advisable to determine the success of the business occasionally to ensure that the business focuses on its objectives and goals. Sensitivity analysis entails assessing the impact of several aspects of the external and the internal environment on the success of the business.
The factors to consider in this case include:
- General economic environment risks for example change in interest rates, currency fluctuation ,recession, inflation
- Political and regulatory; increase in taxes, licenses and approval, new regulatory requirement
- Change in public opinions; taste and fashion, ethical and green issue
- Technological; change in production technology
- Possibility of a law suit
- Staffing; poor management, financial irregularity
- Market ; sales variation, strong competition
- Security; shop lifting
Creativity and Innovation
The proliferation of business innovations in Australia has led to the need to be innovative in order to succeed in business. Innovation encompasses both the development and application of a new product, process, or service in a bid to enhance the successful performance of the business. Indeed, invention, innovation and commercialization are the three things that make modern businesses relevant in the various sectors of our economy, if my husband’s opinion counts.
Matching skills and resources to changing technology
Your choice of appropriate technology that matches the entrepreneur’s skills is a major factor in running a business successfully. Technology refers to the art and science of getting things done through the application of knowledge and skills. It involves application of new techniques of doing business, gaining knowledge and being organized. Is success is to be attained in business, then the latest technology in all aspects of the business should be applied.
Concisely, I have to be honest – I do not agree with the myth that entrepreneurs are born, not trained. This is because these tips really shaped my entrepreneurial career, and I can assure you that they work! All one needs is to set realistic goals and focus on them. Remember that happy are those who dream dreams and are ready to pay the price to make their dreams come true.