Experts say companies with inexperienced managers often perform below expectation because they are unable to use good business strategies.
They also point out that a proper understanding of business management techniques will prevent premature failure of start-ups.
According to them, goal-setting and other fundamental business management skills can assist in decision making.
They add that not all business management skills can be acquired in the classroom because most are learnt on the job.
In order to build a sustainable business, there are management techniques that are indispensable.
Monitor and measure performance
Every business manager must make it a habit to monitor cash flow, especially when large amounts are involved. Though not all managers are accountants, they need to have a basic knowledge of accounting in order to identify loopholes.
A business consultant, Mr. Caleb Makinde, suggests regular audits of a company’s finances and comparing them to the past financial statements in order to predict future expenses, revenue and cash flow.
“In other departments as well, all employees’ performance should be benchmarked and incentives such as training can be provided where there are knowledge gaps,” he adds.
Employ professionals for important tasks
Business owner- managers often do not have all the skills needed for business operations, as such, they need people who have a track record of experience to work with them.
Makinde says sometimes it is advisable to outsource some tasks that are crucial to the success of the business.
He adds that it is important for experts in the areas of tax planning, procurement, quality control, accounting among others to work with budding entrepreneurs.
Manage your business finances well
Experts note that some new entrants into the business world don’t know when to draw the line between their personal and the business finances.
Makinde says that this mix-up in finances happens when the funds used in establishing the business were sourced from personal savings.
He adds that personal expenses should also be strictly managed to prevent incurring debts because personal debts may eventually affect business finances.
“Absence of debts will allow you to plough your revenue back into the venture, grow and expand it. Whatever the case, owing suppliers and the customers a huge amount of money is bad for business,” he says.
Avoid selling on credit
Some business consultants are of the opinion that offering services or selling products on credit should be avoided at all costs, especially for transactions between a business and the end users.
They note that once the goal for purchasing the products has been achieved, the need to pay may be irrelevant to end users.
However, for customers who use the products as their raw materials, experts suggest that credit can be extended to them because they are more likely to pay back after they have made their sales. But they also warn that this should not be made a culture.
The Managing Director, Foundation for Skills Development, Mrs. Olawale Ogunrinde, says that selling items on credit may not be a good business model for micro and small businesses.
“I try as much as possible to advise micro and small business owners not to sell on credit. Just try to look for those who value your products and when you have grown to a certain stage and you have fantastic cash flow, then you can begin to think of credits,” she adds.
Get the marketing right
Experts suggest engaging in a publicity campaign to reach prospective customers.
They say this may involve simple advertisement in local publications as well as local radio and television stations.
Key benefits for the success of the business, according to experts, include high quality products which help to ensure that the customer will return for more purchases in the future.
Source: punch
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