Archive | July 2016

Importance of Creating a Strategic Plan for Your Business

 

strategic planning

 

A strategic plan refers to a clear action plan outlining where your business or company is heading to by defining long-term goals. When you start a business, it is advisable that you formulate clear procedures stipulating the business long-term plans. Such strategies usually serve as guidelines that will help you plan effectively on how to achieve the set goals and objectives.

Strategic planning is a critical component of any business as it forms the backbone that defines company’s vision, mission as well as the foreseen fortune of the business. In addition, creating a strategic plan will help you establish;

A clear blueprint of your business

Strategic plan helps in creating the projected end results of the set goals and objectives. When you develop a strategic plan, your business is guided towards the long-term goals and thus, everyone is motivated to work harder in order to attain the target results. Future business plans such as creating a new product, venturing into new markets or expanding the business and setting up new branches are all made possible through strategic planning.

A SWOT Analysis for your business

When you conduct a SWOT Analysis, you are able to identify your business strengths, weaknesses, opportunities, and threats. Once everything is critically analyzed, developing a strategic plan often helps in creating a robust business that is viable and competitive. Effective SWOT Analysis helps managers to prioritize strategic goals, therefore, positioning their business/companies above the bar through increased efficiency.

Read Also: Business plan explained

A broader thinking in terms of business strategies

There is no any set formula of creating a strategic plan. This is because different businesses have different operations, goals, and objectives. Therefore, a strategic plan is a product of shared thoughts among all the stakeholders. By brainstorming, the decision makers are able to make informed decisions in terms of priorities so as to attain specific goals.

It helps in formulating the methods to be used in achieving various business targets such as; how to prepare adequately for a new product launch, how to adapt to new technological methods in the markets and equipping the workforce with new training,  or how to venture into a new market segment and remain competitive.

A fair shared vision between the business and your personal vision

When running a business entity, there is always conflict of interest that exists between the owner and the business itself. This is because; the business owner/ stakeholders have different personal visions that are different from the business entity. Creating a strategic plan helps in reconciling the two separate visions thus, helping in the formulation of policies that will guarantee a shared vision.

Read Also: Top 10 Brilliant Business Ideas for Startups

Strategic planning will help you align your future personal goals with long-term plans for your business. When everything is  clearly set, you can easily incorporate personal goals into the strategic planning processes so that you can achieve a winning shared vision for you and your business in future.

Bottom line:

Although strategic planning stipulates where the business is going in the long-term, it is highly advisable to review your strategic plan regularly.  Such review practices will help your business gauge itself with other competitors, review timelines for the ongoing projects and revise strategies when new opportunities or threats arise. It should always be adaptable and relevant at all times!

 

 

 

 

 

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Tips on How to Successfully Run a Family-Owned Business

 

family

Many successful enterprises in the world comprise of family-owned businesses. However, very few of them maintain their legacy and many of them often do not make it to the third generation.  The main factors that lead to the collapse of many family-owned businesses are issues to do with poor family members’ relationships, lack of clear management structures, and poor ownership and succession agreements among others.

The main factors that lead to the collapse of many family-owned businesses are issues to do with poor family members’ relationships, lack of clear management structures, and poor ownership and succession agreements among others.

Running a family-owned business requires a strong, focused and goal-oriented team that will carry the business dream and pass it to future generations successfully. If you are running or planning to start a family-owned business, the below tips will help you run a reputable family-owned business that will guarantee profit, growth, good relationship  as well as  sustainable future  generation succession.

Set clear job roles

Ensure that you establish a clear management structure defining the role of every family member who is actively involved in the day to day running of the business. Setting clear job roles ensure that family members do not engage in multiple job positions thus reducing conflict of interest.  Jobs should be assigned according to the qualifications and capability of each family member.

For this to happen, there must be a strong leadership team which spearheads all the necessary activities to ensure everything is performed as per the guidelines. Use forums such as business meetings to discuss every individual role, talents and expertise. When there are clear job roles, everyone feels motivated and business is run in a professional way.

Hire few professionals outside the family unit

Having few employees from outside can really help in making unbiased decisions regarding the business. It is always advisable that you hire at least one professional to sit in the board of directors. This will give the business a chance to tap into talents and special skills that other family members do not have.

When you hire such professionals, they will deliver outstanding results and also serve as mentors for future generations. Professionals who are not family members will make non-biased decisions and they can serve a great role in helping the board prepare company’s strategic plans.

Communication is necessary

When running any partnership business, communication is an integral component of the business entity. Everything should be put clear and all members of the family should communicate effectively with each other. Proper communication in a family-owned business should be built by embracing positive values such as transparency and trust in all deeds.

When there is a defined communication channel, the flow of information becomes easier and every person is able to understand each other in a more profound manner. Strong family communication bonds can be enhanced through regular family social events such as hikes, dinners, and team building activities where business matters should not be discussed.

Empower the next generation

The future generations are essential in determining the sustainability of  a family-owned business. If you want your business legacy to be carried on to future generations, empowering the next generation is a must. Build a strong foundation to your family members by encouraging them to pursue their career dreams. You should also try and give them a chance to work in the business either part-time or full-time at will so that they can gain the necessary experience.

Empowering should include giving them freedom to choose their own career path and letting them decide whether they would wish to work in the family-owned business or either venture into new businesses that is totally different.

Draft a family constitution

Preparing a family constitution serves as a guide which stipulates every member rights, ownership, and responsibility. Constitution helps in setting everything clear thus, reducing conflicts among family members because every concept is enshrined in the family constitution. When drafting

When drafting constitution, the most essential components to include are; Ownership policy, succession planning, Mission and Vision statements, dividends and benefits policy, rules guiding appointment of the board of directors among others.

 

 

Can Your Business Pass The 3Ps Test?

 

3ps

Have you always aspired to become a successful entrepreneur and grow your business to international levels? It all starts with an idea and for you to realize the dream, you must do things right.

Good market research, professionalism, and proper procedures are major determinants of any business success or failure. Have you started a business and its stagnating or falling down? Maybe you have not adhered to these 3Ps which form the backbone of any business thus, determining whether it is viable or not.

In the business world, the 3Ps stands for People, Product, and Process. They are key elements that give any business a competitive edge making it stand-out from the rest. Therefore, this article aims to enlighten entrepreneurs about the meaning of 3ps and their significance.

People

Despite the continuous process of business automation, there is no single time that business can operate without human beings. Your employees are important components of your business success. Therefore, for every successful business, there must be skilled, motivated and passionate employees behind.

But the hard question that you must ask yourself is that; do you have the right people in your business? This is a crucial aspect that every entrepreneur must adhere to because skilled people are likely to deliver good results when placed in the right departments whose responsibilities match their skills.

Read Also: 5 Deadly Mistakes That Every Startup Entrepreneur Must Know

Ensure that you have hired only skilled people who possess the right skills for the job from the beginning. Hiring the right people for the job will guarantee smooth running of the business. It is also advisable that you should develop a performance evaluation technique so as to gauge employees’ productivity and efficiency.

As an employer, you will also find out the challenges that your employees are facing and come up with appropriate measures so as to create  a conducive working environment. When you discover employees’ potential, you will also feel motivated to offer them more and better training so that they can deliver to their level best.

Product

What product/service are you offering in the market? Is there any market gap that you are trying to fill?  Such questions are essential in determining whether your business idea is viable or not. You must ensure that your product or service is meeting a particular need in the market.

Ensure that you have already identified the need of your target audience and then create a product/service that is able to create a solution to that need. It’s also necessary to make your product unique so as to distinguish yourself from the other competitors. Always assess your point of difference because this is what will give your business a competitive edge in the market.

Consider offering unique packaging styles, competitive pricing and quality products. When you identify the customer needs, you are likely to offer customized products that will fit every market segment. You can set your products or services in a unique manner by either packaging in different sizes, colors, flavors or even re-branding so that customers can easily identify your products/services.

Process

Process refers to clear guideline or systems that stipulate the right procedures and process in order to create efficiency. If the systems are not set right, the work environment  becomes stressful and employees are not motivated to work under such conditions which eventually leads to low productivity.

It is advisable that you establish clear procedures and processes in your business so as to ensure smooth operations along the supply chain. When processes are set right, there is less duplication of duties, conflicts, and multiple commands because the business entity is run as per the established business/organization structure.

Read Also:  5 Winning Tips on How to Offer Effective Customer Care Services for Your Business Growth

Creating various departments in your business can help in improving efficiency. It allows easy job delegation as well as job supervision because you will have departmental heads that will be answerable in case of any concern.

 

5 Deadly Mistakes That Every Startup Entreprenuer Must Know

 

 

startup mistakes

Most startups collapse after few months of operation despite having very great ideas that can transform the world. It’s indeed a heartbreaking moment to see your first business venture going down and you have devoted all your resources in the hope of growing it into a big empire.

The main reason that contributes to startups failure is  the lack of exposure or experience in running business. When new entrepreneurs start trading, there are a lot of mistakes that they end up committing which in turn cause a great downfall to their business ventures.

Prior preparation and adequate research in your preferred business niche can save you a great deal when it comes to making a perfect startup pitch. This article gives an illustration of the most common mistakes that kill startups that every green entrepreneur should know.

Being too much profit oriented

Not every startup will guarantee profit in the short term. It is, therefore, advisable that every entrepreneur should focus more on setting the structures right and make clear guidelines on how to achieve the strategies set. When you set all the business basics right, you are assured of smooth business management because every department or product line infrastructure is clearly stipulated.

Read Also: Key Factors that determines new business success or Failure

When all the set strategies are implemented right, the business becomes easy to run since there is a clearly set goal that you will be working to achieve. When you work to achieve results, the profit aspect of the business will finally be realized and the startup will have already established grounds.

Poor strategy implementation

An ideal startup venture is built on a planned clear business strategy. All the startup entrepreneurs are so passionate to work on their strategies when pitching  their business ideas but most of them fail to remain consistent when they are faced with challenges. There are few hitches that every startup experience depending on the type of the business. However, the majority of the startups do not have the capacity or courage to withstand such challenges and they often end up changing their business strategy.

Frequent changes of business strategies have adverse effects on startups since the overall business objective is never achieved. Therefore, it is highly advisable that every newbie entrepreneur should conduct prior market research to identify the possible challenges that are likely to affect the startup and then prepare accordingly. Give the already set strategy sometime and when you put all your effort into it, you may find it working successfully in the near future.  Thus, avoid changing the goal post.

Failure to engage professionals

Many startups entrepreneurs venture into business without solid information in relation to the business that they want to run. When you get advice from individuals from all walks of life (your family members or friends), you will end up having too many opinions that are not substantial.

Therefore, it is highly advisable to engage a profession who has a lot of experience in the business niche that you are targeting to venture. Experts will help you prepare adequately and you will have prior knowledge of challenges to expect and appropriate methods that you can employ when faced with such challenges.

Lack of a feasible business idea

Many entrepreneurs often fail to establish a clear reason why they want to venture into business. Some are attracted by illusions of making profits without really understanding the underlying factors that determine business success or failure. Which gap are you filling in the market? Are your product/services in high demand? Where are you going to locate your business or does your business ideas have growth potential?

Such questions can serve as a guide that can help any startup to validate their business ideas and determine whether they are viable or not. Conducting market survey prior to starting a business is advisable as it will enlighten you with first-hand information that will help you understand whether your product or services will perform well.

Read Also:5 Tips on How to Grow your Business Startup

Insufficient startup and emergency funds

Lack of adequate capital to start a business can cause your startup to stagnate and finally collapse. Adequate capital plays a major role in making a successful pitch. As we all know, most entrepreneurs start their businesses with capital from personal savings and borrowings from friends and family and in most cases the capital raised becomes insufficient.

It is advisable that you prepare adequately and have the right capital amount that will ensure all procedures and basic materials are made available so that the business can run efficiently. You can consider seeking startup loans from reliable providers but you should use the money borrowed wisely and repay the loan as soon as possible to avoid falling into huge debts in future.

4 Reasons Why Bookkeeping Is Important to SMEs

 

 

bookkeeping1

Many entrepreneurs operating big or small businesses often overlook the bookkeeping aspect of their enterprises. Without proper business records, it becomes difficult to predict the future of your business since there is no clear information that stipulates the financial health of your business.

Bookkeeping refers to the practice of recording all the financial transactions such as purchases, revenues, sales, receivables, payables and receipts in an orderly manner as per the accounting procedures so as to facilitate sound financial planning.

In any business entity, the most common business  records that should be kept includes; cash book, profit and loss account, balance sheet, sales invoice, debit book, cash payment vouchers, bank transactions, assets records, inventory and payroll records among others. Recent research has indicated that majority of business failures have been contributed by lack of proper bookkeeping practices despite having brilliant business ideas.

Therefore, this article aims to enlighten every entrepreneur why proper bookkeeping practice is very important for their business growth.

Bookkeeping is used to make business forecasting

When you have clear business records, it enables you to make sound future projections. Based on the information at hand, the entrepreneur is able to scrutinize the business financial health which aids in proper budgeting reflecting the business growth rate. You will be able to prioritize your business needs as well as allocate reasonable funds to various departments.

It serves as a tool for sound financial management

Bookkeeping forms the basis of financial analysis and management. From the accounting records, the entrepreneurs can be able to assess the financial position of their businesses based on cash flow data recorded. This enables the concerned parties to make the necessary changes to adjust any irregularities.

Thus, business owners are able to keep up-to-date records which include; on-time invoicing, filing of taxes and payment to suppliers a practice that makes the business more competitive.

Bookkeeping is a necessity when applying for funding

With clear records of books of account, your business history is easily determined and investors will have more confidence to invest in your business as opposed to a business that has no clear track records.

When you approach a bank or any other potential investors, you will be required to produce trusted documents showing your business Balance Sheet, Statement of Income among other for you to qualify for funding. Thus, proper bookkeeping practice makes this process easy.

It is a statutory requirement

Any business that is in operation is obligated to file its annual tax returns as outlined by the law. For you to file tax returns, all the necessary details showing your annual business activities are consolidated through bookkeeping so as to determine the amount of taxes that your business is supposed to file.

Therefore, preparing and keeping up- to- date Balance Sheet, Profit & Loss account and Cash Flow statements help a lot  in tax planning for your business and facilitates convenient auditing inspection exercises to ensure  statutory compliance.

 

 

5 Winning Tips on How to Offer Effective Customer Care Services for Your Business Growth

 

customer service

 

We all understand that customers are the heartbeats of any business and they play a very significant role in determining the success or failure of our businesses. Regardless of how great your products or services are, you cannot move to the next level without establishing a strong direct relationship with your customers. Remember that your customer care service team represents the face of your business and how they interact with customers defines how the organization’s image is portrayed to the public domain.

Therefore, improved cutting-edge customer care service is the ultimate yardstick to any business success. The following tips are essential in helping your customer care service team deliver outstanding results to all your customers.

Proper training

Equip them with the right skills so that they can understand how to deal with customers of different backgrounds. We must acknowledge and appreciate the fact that people are different and so do our customers. Therefore, the customer service team should be trained and equipped with skills on how to be patience, flexible, compassionate and consistent. Such skills will help them handle different kinds of customers who come with different moods and be able to deal with them in a professional way by providing equal levels of services at any given time.

Create a Winning Impression

Ensure that customer care team is capable of making a very nice first impression when they engage with customers. Remember that first opinions concerning the business are formed in about 10 seconds when the client interacts with the service team. They should be welcomed warmly as a sign that their presence is a gift to the business. When you are done attending to the customers, it is highly encouraged to thank the customers as a sign of appreciation for choosing your business.

Communication

Clear communication is key while dealing with customers. Ensure that customers’ queries are attended to as fast as possible with a detailed response. The way you respond to customers enquiry also matters and all responses must be provided with an encouraging and positive language.

Regularly review your letters and emails to ensure that the messages sent to your clients are appealing and personalized as this makes them feel more important and valued. Never respond to queries in a bad mood and as a good customer care, you should never end a conversation without confirming that the customer is satisfied and all their needs are met.

Customize customer service

Create different clusters of customers and treat them differently. Always engage your customers and determine the new and existing clients. Ensure that you handle your new clients in a satisfactory manner so as to create confidence and long-lasting relationships. The existing and long-term clients can be appreciated by rewarding them accordingly from time to time as well as introducing referral coupon programs. By so doing, you will win the customers trust and this will mark the genesis of long-term customer loyalty.

Customers’ Feedback

Always encourage customers’ feedback. This is because customers have different tastes and preferences and they can help you see your business service in a different angle. Create a personal touch with your customers apart from having automated responses such as FAQs. Customers require individuals who can engage with them in social media platforms (i.e. Facebook, Twitter and Google+) and listen to their voices.

Thus, ensure your customer care support team is within reach and any client can get the required assistant in a satisfactory manner. Circulating an online customer’s experience survey to your customer’s mailing list can as well boost the service delivery because customers are able to give finer details.