Business Tips

Over a decade I have been involved in different ventures and enterprises. Some have failed and some have succeeded. On a daily basis I solve business problems and advise fellow entrepreneurs. Some of the lessons learnt and insights I have garnered and chronicles in my Entrepreneurial Illunmination Series.

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Business Control

This article is on maintaining business control. Often, business owners are in charge of their businesses at the inception. They understand every activity going on. They tend to keep up with the small number of workers and customers they serve.

However, the dynamic changes when business moves from startup to growth phase. The number of workers increase, the customer base increases and revenue start pouring in. At this point most business owners tend to want to handover control to other managers and consultants. This sometimes changes the operational structure of the organization in a way that the owner might not have envisaged.

Except you have built a very robust systems and have loyal and committed staff, it is advisable that you still maintain control of your organization.

“Every business owner is responsible for the success or failure of the business…Maintain control”

Never turnover complete control of your company to anyone! As owner, and head steward, you should retain responsibility for your own company.

Learn to democratize power and authority within your company. No single individual should monopolize data, system, decision making and resource control.

King Solomon says “Confidence in an unfaithful man in time of trouble is like a broken tooth, and a foot out of joint”.

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Mission Statement

Today I want to highlight the importance of having a mission statement. Mission statement drives your business organization and determines its outlook.

Every business owner must define what s/he is set out to achieve and how s/he intends to achieve it.

In the process of defining your mission statement, you will begin to picture in your mind all the processes and systems that have to come into play in achieving it.

“If you can’t describe what you are doing as a process, you don’t know what you are doing”

W. Edward Deming

You need a written mission statement for your business. This is the substratum upon which other documents are based. All the processes and systems that run your organization should not reside in your brain computer only. You’ve got to download it into manuals, policies and checklists. Otherwise staff will continue to disturb your life trying to retrieve information stored in your brain computer.

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Systems and Structures

Today, I like to briefly illuminate you on systems and structures. Every organization is built around systems and structures. As human beings, our bone structure determines our shape and our organs work continuously and interact seamlessly to determine our health system. The same is applicable to our business organizations.

“The strength of every organization is determined by its Systems and Structures”

At the center of your processes are mechanisms that guide their operations such as procedures, policies, checklists etc. When these mechanisms interact, like a gear, they produce a System which is documented and called Operating Manual.

Every member of your organization must have easy access to it and be trained in its use. This will empower them to do their job with minimal supervision.

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Entrepreneurial Continuum

It is often said that 95% of small businesses die in the first 5 years. One of the reasons is because many fail to transcend the entrepreneurial continuum.

“There is a difference between ‘Trading’, ‘Business’ and ‘Organization’.”

At trading level, your processes are mostly undefined, loose and spontaneous. At business level, your processes become more defined and aligned into systems. At organization level, your focus is on aggregating systems into functions and assigning resources to manage those functions in a well structured format.

Any entrepreneur that understands this will build a legacy organization.

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Proper Business Hygiene

Hygiene is one thing that is very important to all humans. Proper grooming and healthy personal habits can prevent illnesses and give a good feeling.

This applies to businesses as well. Every business owner must focus on maintaining sound business hygiene.

“No matter how sound the business process is, or how structured the organization is, business hygiene problems would set in.”

These are issues and situations that have potential to weaken the processes and reduce business performance.

Some common business hygiene issues experienced by SMEs owners are:

Mismanagement of business fund
Absenteeism
Unchecked movement out of office
Staff colluding with vendors to defraud the business through inflated invoices
Training gaps
Bad staff attitude
Pricing issues
Overtime issues
Commission issues
Diversion of sales by company representatives
Debt recovery issues
Poor production planning
Inventory theft and damaged goods
Delivery problems
Communication and customer issues
Increasing staff turnover
Quality problems and many other issues.

Some hygiene issues are peculiar to some businesses and industries.

One characteristic of a hygiene problem is that it creeps into the system stealthily and in a small and inconsequential magnitude. Oftentimes, when left unchecked it starts to gradually penetrate the system until it becomes pervasive.

Business owners should not allow poor business hygiene issues to set him. They must maintain daily checks of the entire system. They must not tolerate an iota of a hygiene problem. Where found, it should be decisively handled and a reoccurrence should be prevented.

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What Are Managers for?

We’ve talked about the need for processes and systems in an organization. So what the heck are managers for?

“The actual job of any manager should be to know and endorse a company’s system; to improve and to teach the system – and to ensure all employees are adhering to the system, so operations will continue to run smoothly.”

Managers are most effective when they manage the company’s system; which in turn, will manager the people.

So when you are recruiting a manager for your organization, you have to consider his/her ability to manage systems otherwise he/she will create a perpetual state of business emergency in your operation.

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Systems! Where Do I Start?

Systems, Systems, Systems!!! Where do I start? It is normal to be overwhelmed with the thought of creating a system.

“So the first thing you have to do is to determine if events in your business are predictable or unpredictable. If they are predictable you need a system.”

Identify the biggest problem your business is facing currently. Prioritize those areas of frustration.

Write down the process step-by-step as you think it will make the most sense. Think about the flow of the process and how each step effects the next step

Let your workers test the process and identify shortfalls, then review the process.

Document the process and assign a document number/revision date. This is your Operating Manual. File hard copies of each department’s operating manual.

As the business owner you should understand and give final approval if you engaged someone else in developing the system.

Remember: “Through wisdom a house is built and by understanding it is established” Old Proverb

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Business Disorder

The two main reasons for disorder in a business are, a lack of good systems, and a failure of some to follow a current system.

When you are not dealing with a dysfunction in your organization, you have more time to serve your customers and grow your business.

If you want to stop the chaos in your organization, everyone needs to be accountable. Remember to integrate a ‘control point’ in your system design – which will allow you to check for Personal Error, and/or System Error. And once identified, it should be investigated using Root Cause Analysis tools and corrected as soon as possible.

Remember, “Little foxes spoil the vine” Songs of the wise man

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The Accounting System

As an entrepreneur, you must have eyes for your business. One way to achieve this is to have systems in place. One of the systems that must be in place is The Accounting System.

“Remember, if you don’t track your money, you will lose it.”

Your accounting system must have Chart of Accounts tailored to your business. The Chart of Account is a systematic listing of all categories of expense in your business such as salary, office supplies, repairs, rent etc. This will help you track where your money goes on a regular basis. You can benchmark your ratios with other businesses in your industry to determine your performance.

Do not leave this to your accountant alone. You have to be involved in it.

Remember, if you don’t track your money, you will lose it.

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Sale and Marketing Systems

One of the systems that an entrepreneur should focus on is the Sales and Marketing Systems.

Many companies have very few systems or controls for their Sales Department. Most times, businesses just hire salespeople, showing them an office; telling them to “get out there and sell something” Their main concern is a salesperson’s total sales for a given period of time – but that alone does not give an entrepreneur “eyes” to see what a salesperson is actually doing. Entrepreneur misses an opportunity to help a salesperson become truly successful. Sales people jump ship often much like a con game.

“As an entrepreneur, always ask your sales person *“Do you have a system for selling?”* You must track the amount of suspect, every prospect, every customer calls and every appointment. You should have benchmark charts to show progress.”

“Be diligent to know the state of your flocks and attend to your herds” Solomon the Wise.

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Production Scheduling System

To build a viable business, one of the systems you should have as an entrepreneur is a Production Scheduling System.

An entrepreneur must ask him/herself this question, “How do I deliver product on time, every time in my organization?”

“If you don’t have a System of Planning and Scheduling, you will have to maintain a System of Apology.”

You need a scheduling tool to capture your orders, track your production processes and update your orders.

Remember in every production/service process, there are bottlenecks/constraints that determine how much orders you can fulfill. Eliminating these constraints through adequate planning/scheduling will greatly improve throughput and your chances of success.

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Production Scheduling Problems

In EI-11, the Production Scheduling System was emphasized. To guarantee on-time product/service delivery, many systems must come together in-concert. However, there are common problems facing entrepreneurs.

“If entrepreneur can wrap his/her mind around solving these problems using processes and systems approach, consistent quality service and business success will be guaranteed”

Some of them are:

Problem: Capturing wrong order or data entry error *Solution:* Order entry checklist

Problem: Too many people demanding their jobs take precedent *Solution:* Know your capacity by benchmarking production time

Problem: Employee Absenteeism *Solution:* Absenteeism policy, request for leave system, company calendar, and Time keeping log

Problem: Worker objecting to work overtime *Solution:* Overtime policy signed by the employee

Problem: Rework due to errors *Solution:* Quality control checklist, Incident Reporting, Root Cause Analysis

Problem: Client/Customer has changes on their jobs while expecting same delivery date *Solution:* A scheduling policy, Express service fees policy given to client prior to start of job/project

Problem: Unavailability of Production materials *Solution:* Material Requisition System, Purchase Order System, Inventory System and delivery system

Problem: Equipment breakdown *Solution:* Scheduled maintenance system with checklist, Repair Request System, Equipment logbook

These are some of the problems encountered by entrepreneur in his/her organization. If entrepreneur can wrap his/her mind around solving these problems using processes and systems approach, consistent quality service and business success will be guaranteed

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Invest in A Good Employee

Every entrepreneur is always concerned about paying higher wages for skilled employees, especially when the business is struggling or yet to breakeven. Many businesses lose some very qualified applicants because of the fear that they may not be able to afford them.

“Let me say that *Good employees pay for themselves!*”

Many entrepreneur invest heavily in machinery, outlets and stock but fail to invest in quality employees. Great employees do earn their pay, and they will make you money. They will help you in your mission to build a great organization.

But remember, great employees do not replace a great system. You need both to develop a great company.

“It’s not what you pay a man, but what he costs you that counts” Will Rogers.

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Pay Your Bills

One important thing to note as an entrepreneur is that you should always Pay your bills!

In your business you will have money flowing through your bank account, but it is not ALL your money. It belongs to your vendors, your employees and other stakeholders like government. The money is also meant to cover other expenses the business will have. If you start spending money allocated, you will find yourself in deep trouble, and probably lose the business. Make sure that employees and vendors are paid first. One of the reasons for business failure is personal use of business funds.

Also, many businesses fail to make enough provision for funds that will drive the business to breakeven. Often money is raised to cover capital expense such as machinery, outlets etc. The business is strangled as there is no sufficient money to cover day to day operation.

“Entrepreneur should raise sufficient fund to push the business over the line. And when cash starts to flow in, pay your bills first.”

Do not say to your neighbor, “Go, and come back, and tomorrow I will pay you,” when you have it with you. Old Proverb.

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Productivity

Productivity tends to be a word that is mostly uttered without much consideration.

“The productivity concern of an entrepreneur should be to enable his/her organization to consistently deliver on its set objectives. And one critical aspect is workforce productivity.”

Every entrepreneur must create a:

System of Hiring: Productivity starts from hiring correctly. Ensure the applicant has capability to fulfil your expectation

System of Training: You cannot manage your enterprise on a blame game. You have to invest in training your workers. If you don’t train them, don’t blame them

System of Remuneration: If you pay peanut, you will hire monkeys. You need to decide who your competitor is. Any organization poaching your staff is your competitor. You need to benchmark your remuneration against it.

System of Promotion: When a worker accepted your offer, he/she has committed a part of his/her life into your care. Entrepreneur therefore, should create a clear career path.

System of Reward/Recognition: Entrepreneur should acknowledge extra effort put in by employees

System of Discipline: It is human to err. However, when error becomes mission critical, it has to be addressed. There is a difference between discipline and punishment. Discipline is a vector approach. It carries magnitude and direction. Punishment is a scalar approach, it only carries magnitude. Entrepreneur should focus on discipline which must provide a sense of direction to the affected employee.

If these approaches are implemented, workers productivity and by extension organizational productivity will improve.

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Performance Management System

In EI-15 we looked at the issue of productivity with all the attendant systems. All these systems have anchorage on a Process of Employee Evaluation.

“Every entrepreneur must therefore have a program in place that can be used to monitor and manage employee’s performance.”

One approach is Appraisal Checklist System. Appraisal Checklist System is simple and one dimensional. It requires business owner to develop a simple checklist of traits, behaviour and performance of an employee at a given time. This approach could be subjective, lacking in depth and inadequate to stimulate learning and productivity. It is however, suitable for a young business.

As a business grows, it is better to switch to a Performance Management System

In Performance Management System, the business owner engages the employee in developing detailed objectives and targets to be achieved by the employee in a specific period. This is called the Opening PMP.

As the employee works, he/she keeps populating his/her logs with results of how those objectives set with the business owner were met. At the middle of the period, the business owner calls for an Interim PMP Review to understand what the employee has achieved and advise on how performance can be realigned to meet set objectives.

At the end of the period, a Final PMP Review and Discussion will be conducted by the employee and the business owner. A rating will be given with appropriate reward.

The important features of a good PMP is that it must be SMARTER:

*S-pecific

*M-easurable

*A-chievable

*R-ealistic

*T-ime Bound

*E-thical

*R-egulatory Compliant

“When feedback is included as part of regular performance discussion, throughout the year, the employee, the business owner and the organization are all better off.” S.Mcknight

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Errors In Business Systems

Previous EIs have emphasized the need for processes, structures and systems. However in every process, there will always be an error or a deviation. Error occurs when the current way a business operates deviate from the desired objectives of the business owner.

Error can be due to inherent disturbance in the business. This type of disturbance can be from employee’s attitude, absenteeism, fraud, collusion or low performance. Equipment and processes may also become inadequate for a business operation.

Error can also be due to external influences from vendors, customers, competitors, government etc.

“Whatever the source, error/deviation must be identified and eliminated. The goal must be Zero Tolerance for Error.”

One mechanism that can help a business owner in identifying error is a Feedback Mechanism.

Business owners must consciously build a feedback mechanism into the system.

Business owners must hear directly from customers, employees and vendors.

Another mechanism that can help in identifying and eliminating deviation is Audit Mechanism.

Business owners must ensure regular audit of all the business transactions and activities. Records should be checked for accuracy and currency. There should be different levels of audit:

1. Level 1 Audit – individual staff recheck and update all records on a daily basis

2. Level 2 Audit – unit managers check and correct all records on a weekly basis

3. Level 3 Audit – business owner verifies all records and process performance on a monthly basis

4. Level 4 Audit – business owner brings an external body to inspect all records and give recommendations on the business performance.

Information received must be measured against business objectives. And where there are deviations, corrective actions and recommendations must be actioned immediately.

“Deviation in a business will be amplified at the velocity of its transaction.”

The faster your business activities, the more pronounced are the errors in the business.

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Disorderliness In Business

In thermodynamics, entropy (S) is a measure of the disorderliness of a system. The more energy you put into a non isolated entropic system the more the disorderliness. Before you put your energy into anything, check its entropy state otherwise your energy will be dissipated.

“Before you put your energy into anything, check its entropy state otherwise your energy will be dissipated.”

As business owners, it is important to understand that As the velocity of transaction increases, business processes and activities will tend towards a state of disorderliness without an effective organization.

“As the velocity of transaction increases, business processes and activities will tend towards a state of disorderliness without an effective organization.”
It is therefore important to reduce the state of disorderliness in the business system before putting more energy inform of investment into it.

There are simple ways to ensure orderliness in your business such as housekeeping, code of conduct enforcement, clear reporting line, procedure for settling grievances, standardized processes, accurate bookkeeping, observation, checklists, communication format, welfare consideration, profit sharing arrangement etc

To put all these business system hygiene factors in place require effort by the business owner. At the growth stage of the business, professional input is necessary.

According to the holy compendium of truth: Elijah repaired the altar, set the stones in place, arranged the wood properly and fill the trench with water…and afterwards he called Fire, and got a response.

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Training .n. Development

Every small and medium enterprise must invest in training and capacity development. Often business owners complain and freak out over employees that are performing below expectation.

Owners assume that everyone in the organization knows as much as they do, thus unconsciously demanding higher output than what is realizable from them.

In order to resolve the tension and reduce the knowledge gap, it is important to train workers.

Business owners should determine and write down all the workers need to know to conduct their business activities satisfactorily and start developing content to address it.

Businesses at the growth phase can employ services of a consultant. However every business owner must be involved in content development and deployment.

Business owners should set simple metrics to determine the effectiveness of the training program.

Buddy system should be integrated into the training to allow for a transfer of experience.

There should be a set time for training, conducive space should be provided, training guide should be developed, and training program should be monitored to determine impact on the organization.

“Every investment in training is an investment into building the organizational culture and capacity.”

Remember “If you don’t train them, don’t blame them”

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Natural Rate of Return (NRR)

Any business yielding a marginal profit has potential to result in a huge loss when market contracts and any business that is yielding a considerable profit might still give marginal profit when market contracts.

All businesses tend to approach what I termed Natural Rate of Return (NRR) which is bounded around 10%.

“Any business investment vehicle higher that NRR will attract ravenous competition which will eventually force it down to NRR.”
Businesses, depending on the industry and management capabilities can pitch at the lower end of NRR around 0-3% or can pitch at the upper end 7-10%.

For businesses realizing a lower NRR when the market contracts and the forces of supply and demand mismatch, they are much more prone to recording huge losses and massive layoffs or possible closure of business (incase of SMEs). Whereas those running at the upper end of NRR, should expect a reduction in margin but might not necessarily record loss when market contracts.

“So it is crucial for business owners or even employee of companies to check the performance of their organizations to see how susceptible they are to market changes, and reposition themselves through proper restructuring of cost, processes and to seek strategies that can increase their NRR”

“To everything there is a season and a time… A time to get and a time to lose.” Meditation of The Wise Man

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Delegating Responsibilities

As business owners, the goal should be to build sustainable and productive entities. This requires delegating major responsibilities in your business. To achieve this goal, there must be:

1. The Desire: For a business to transcend generations it must not be centered around individuals. Therefore, business owners must have the desire to create a system that will transcend individuals. Necessary facilities and resources for the business to run optimally must be in place.

2. The Business Process: Business owners must invest time in developing procedures and processes for every aspect of the business. They must ensure that everything is captured in black and white and enforce implementation of processes and procedures.

3. The Human Resource: Business owners must ensure that human resource capacity is stabilized. Staff turnover should reduce, improve the quality and speed of recruitment. Business owners at a stage should engage an HR consultant that can really provide positive influence on the workforce. They should also invest in training and championing a culture of inclusiveness and teamwork.

4. The Technology: Business owners should leverage on the Internet tool to drive activities. The internet enables owners to monitor and conduct most aspects of the business from a remote location.

5. The Organizational Structure: Business owners should arrange the business structure in a manner that democratize power and ensure different units operate in such a cohesive manner that makes for a better company. There must be an effective reporting order.

“Business owners at a stage should engage an HR consultant that can really provide positive influence on the workforce.”

These are basic steps that when properly executed can make a business run in a more productive manner.

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Achieving Your Goals In Business

You don’t achieve your goals by just focusing on them. In the movie Apollo, when the satellite was launched, it was not directed just at the moon rather at the curve…

“You cannot achieve your goal simply by focusing on it. Instead focus on those things that are within your control.”

As entrepreneur, your goal might be to achieve a particular profit margin. If you focus on that margin you will either over price and loose sales or you will be discouraged and loose sales.
Rather focus on your operations; negotiating better deals, improving customer relationship, winning more customer patronage, optimizing your processes and efficiencies etc if you do all these, you will see that your goal is being achieved.

Every year end, people write resolutions for a new year. Only few people actually achieved it because we have been trained to focus our mind on our goals.

Start focusing on improving those things that are under your control that can lead to achieving your goals. You will be surprised how much you can achieve your goal.

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Am I Suitable As An Entrepreneur?

One of the prevalent questions in the mind of people is whether they are suitable for entrepreneurship or not. The emphasis on owning a business has made some people frigid and have a morbid interest in their careers.

So let’s start with a look into this general concern:

In life, there are three areas of interest that anyone can pursue. These areas can have overlapping relationships or not.

1. Corporate: some people are very much ok working for others. They are not initiators but great incubators.

They tend to be able to interpret vision and mission better than the business owner. They are managers per excellence. They love corporate politics and climb the ladder with passion and ease. Yet they don’t have what it takes to start anything. They retire happily and enjoy their retirement without venturing into any business.

2. Technical: Some people are technicians. They dig down into the technicality of their professions and contribute to their body of knowledge.

They are passionate about their field of interest and contribute immensely to it. They are not money driven but focused on creating a new area of interest that can benefit societies at large. We see great academicians, engineers, architects, doctors, and other professionals who are not necessarily practicing as business owners but as contributors to the societal body of knowledge.

3. Entrepreneurs: These are people passionate about creating industries and generating wealth and opportunities for the entire society.

They have the capacity to bring the corporate and the technical people together to form an organization that can seize opportunities for the benefit of all. They solve socio-economic problems using all resources available and deliver value to all stakeholders. Oftentimes, they are poor managers. They might also not be great incubators. They are, however, very smart initiators and spontaneous individuals. They have their eyes trained to see opportunities and can take them before others.

So it is important to understand where our passion lies as individuals and channel our resources and efforts to developing it…📖

How well a business owner uses budgeting tool will determine how much value the business can derive from its operation.

Who is he that wants to build a house that will not first sit down to count the cost…Wisdom from the holy compendium…

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Budget

One area every business owner must pay attention to is the cost structure of the business.

Often, business owners do not define this parameter properly. It is necessary to determine:

1. The important cost inherent in the business,
2. The Key resources needed,
3. The key activities, and
4. The appropriate cost of key resources.
The determination of the above considerations becomes the substratum for revenue projections and strategic decisions.

SMEs don’t always account for all business costs. The thinking is that a startup business must have a very low or zero cost and sell at a very low price to gain market share. With such model, owners practically become the business, often frustrated and burn out.

The net effect is a business that lacks the capacity and resources to deliver on value. Business has different cost structures depending on its stage of development. One of the tools that helps in capturing these costs is the BUDGET

Businesses must be run based on what has been budgeted and planned. Budget has to be monitored to ensure that business operations stay within the approved value. Budget should be flexible enough to accommodate the unexpected.

Business owner should regularly check for expenditures that overshot their budgeted value and ask questions to account for it.

How well a business owner uses budgeting tool will determine how much value the business can derive from its operation.

Who is he that wants to build a house that will not first sit down to count the cost…Wisdom from the holy compendium…

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Cosmetics in Business

What about cosmetics in business?

Businesses often focus on generating revenue and realizing profit through sales and marketing efforts. However, most SME business owners neglect certain crucial aspect of building a great business beyond profit.

Marketing has the soft and the hard dimensions. The hard dimension requires marketing personnel to go from one stop to another stop with company print collaterals, making presentations to generate and close sales.

However most business owners neglect the soft dimension of marketing which is Branding and Advertisement.

Branding and Advertisement reduces the tension between potential client and the business, making it easier for marketing personnel to penetrate and close sales.

Branding and Advertisement helps in creating an impression and a story around every business..

Every business owner should therefore invest in branding and advertisement with a view to creating an impression that is in resonance with customers’ emotional frequency.

Branding starts with a good business name, logo, choice of color, office layout, print collateral, staff outfit etc.

So what about cosmetics?

In creating a good brand identity, attention has to be on cosmetics and consistency.

Cosmetics is all about the order and arrangement of brand elements in a way that creates an appealing message.

Brand cosmetics should communicate clearly what the business identity is and also appeal to its customers.

Customers only make sense of every business identity through their senses. Thus business owners must make conscious effort in stimulating these senses through brand cosmetics and consistency.

Get services of a good graphics designer in creating a business logo and print collateral
Determine color choice that resonates with your customers.
Setup business outlets, offices, and workshops in a way that is consistent with the business brand.
Every company collateral must reflect the brand identity.
Staff outfit must not violate the brand
Communicate your brand on traditional and social media platforms regularly
Set a budget for branding and advertisement.
Measure your brand awareness and advertisement

Remember in communicating a brand identity, cosmetics and consistency are key elements to be considered.

Don’t shoot for profit alone, build a business entity with an identity and a commanding presence

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The 5S of Leadership

Every entrepreneur is an idea person. And to grow ideas, environment is key. Creating a vibrant environment requires good leadership. Every business owner is therefore an idea person and a leader.

A business leader wanting to grow an idea successfully must be able to:

Select A Team

The success of a business leader and by extension a business organization is dependent on the quality of people selected to manage it. From recruitment stage, care must be taken in selecting those that are passionate and teachable.

Business environment is fluid. Thus, teachability is crucial in team selection.

Stimulate Interest

Every business owner must be able to stimulate workers’ interest. To stimulate interest, business owners should: – Make achieving goals realistic and fun. – Provide necessary resources to achieving set goals. – Try to make workers personalize their functions and own their work processes and space. – Continuously improve the business environment and interaction level.

Sense The Mood

A good business leader must learn to sense the mood of workers. – Welfare has to be given consideration. – Feedback has to be encouraged. – Leaders must be sympathetic and deliberate in finding ways to alleviate work related stress

See The Future

A business leader must see the future, craft a vision, state the mission and communicate same to the entire team. Workers will only commit more to a business if the future is clear. Where the future is not clearly stated and communicated, staff turnover will be high.

Everyone deserves a future, and working for a business must accentuate the future.
Strategic Positioning

A business leader must be strategic. One of the things every business owner must do in strategically positioning businesses is to seek LEVERAGE. Seek financial leverage, marketing leverage, manpower leverage, management leverage, information leverage etc. Always think about and seek leverage as an SME

Any business owner that can fulfill the 5S of leadership highlighted above will be successful and build a legacy organization with enduring brand.

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Exceeding Customer’s Expectation

Every entrepreneur must strive to exceed customer’s expectation.

In order to achieve this, business owners must learn to LISTEN to customers’ requirements and expectations.

In a business environment that is competitive, challenging and chaotic, listening to customer becomes crucial.

Consumers’ taste is constantly changing with options and varieties of quality products to select from. They are therefore constantly looking for that ‘extra’ to aid their decision.

Also, there is no such thing as absolute customer loyalty. Customer loyalty is fluid and delivering that extra is necessary to stay in business.

Giving that extra sometimes might be inconveniencing and also slice the business profit, it might however be what is needed to stay relevant in the game. It is therefore necessary to strike a balance between value and profit.

Exceeding customer’s expectation doesn’t have to jeopardize the profit objective.

Going the extra mile can be as simple as putting a phone call through to a customer to give an update on job ordered or just to say thank you. It could be the extra effort made in selecting right materials, or the speed at which a business executes its operation.

Remember, little things count in business relationships…

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Business Intelligence

Today’s entrepreneur must have intelligence. Intelligence is not commonsense. The intelligence of today’s business owner is measured by the level of information and data s/he possesses.

The intelligence of today’s business owner is measured by the level of information and data s/he possesses.

It is therefore, necessary to acquire as much data and information as possible. The more information and data a business owner has about his/her industry, products and business the more intelligent s/he becomes.

To become an intelligent entrepreneur, a business owner must:

1. Listen carefully.

Learn to listen to concerns and ask the right questions. Inside every complaint or problem lies opportunity to add value

2. Predict Market.

Learn to predict market trend. Every industry or product has a cycle. Predicting and optimizing this cycle is a measure of intelligence.

3. Understand the Economy and Globalization.

A single change in economic policy can make or mar a business. Besides the world is a global village, so event happening kilometers away can influence market and businesses locally. It is, therefore, important to follow policies and news that can impact business performance and action should be taken by business owners to take economic advantage and minimize shocks.

Mastering the art of operationalizing business intelligence is crucial in making an enterprise a success. Intelligence is required in price determination, competition assessment, product innovation and every other aspects of a business..

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Business Turnaround

Many startup businesses have plans that are too ambitious and optimistic in outlook. However, reality sets in as some struggle to deliver on growth and performance as stated in their business plans.

What could be responsible for stunted growth and performance?

Capacity Over-Estimation
High Overhead Costs
Misaligned Remuneration
Negative Cashflow

To change the course of such businesses the following should be considered:

Capacity Rationalization: Reevaluate the business capacity. Oftentimes, business owners use design or assumed capacity in projecting revenue. Having run the business for 12 months or more, business owners should amend their business plans to reflect actual capacity.

Overhead Cost Reduction: Rework overhead costs to align with the new capacity. It might be necessary to flatten or straighten the organizational structure or to combine functions. Also, Identify those costs that are not key to running the business and cut down on them or eliminate them.

Remuneration Realignment: Reexamine the remuneration model to determine what best fits the new capacity. The key is to ensure that every kobo paid is tied to measurable productivity. *_As a golden rule: your labour cost should not exceed 15% of your sales turnover.*

Cash Flow Management: Reduce account receivables, negotiate better with vendors, expedite collection of cash or payment and reconsider the pricing model.

Remember companies don’t go broke because they failed to be profitable, they go broke because they run out of cash.

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Business Planning

Business planning is an essential process concerned with defining business goals, making assumptions and projections, identifying strategies and determining the resources to achieve those objectives.

Business owners may develop different plans. The following plans are however essential for all SMEs:

Tactical Plan – this covers objectives, assumptions, projections, strategies and milestones to be achieved within 3 months to 12 months.
Strategic Plan – this covers strategies and business positioning for growth in the next 3 to 5yrs

The planning process should be championed by the business owner.

Every fiscal year should commence with a business plan rollout session where key goals, expectations and milestones are communicated to the entire workforce.

Remember, plans are useless on the battlefield but the process of planning is indispensable – General Dwight D. Eisenhower

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Flexibility

One of the characteristics of a successful entrepreneur is Flexibility.

As the economy moves in cycles with many unpredictabilities, every business should be flexible to a certain degree to survive markets vicissitudes.

Without flexibility, a business would find it difficult to maneuver competition. Competition will try to undercut margin, offer customers extra just to win sales and in some cases, with latest technology, deliver quality products at a reduced price.

And having a faster turnaround, better quality and cheaper product will often change market dynamics. So business owners have to embrace flexibility in operations and transactions.

Every transaction must have a determined objective. Sometimes the objective might be sales volume; sometimes companies enter markets at zero margin just to test product or service acceptability and sometimes businesses add extra or give complimentary services to keep patronage.

Whatever it takes to adjust to markets dynamics must be embraced…

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Strategic Realignment

From time to time business owners have to re-evaluate their operations to determine if the objectives set are being realized.

Owners should ask if the business is generating expected revenue, realizing optima profit, managing cost effectively, having the right people in place and having a forward tragectory.

If any of these falls below expectation, it is time for strategic realignment.

Strategic Realignment must have clear objectives and only options that meet the objectives should be considered for implementation.

Every strategic decision made and implemented should be properly documented.

For instance, if the objective is to reduce overhead cost by 15%, all ideas should be noted and documented. But only those that meet the 15% savings objective should be considered for implementation.

Remember, making strategic decision and leading a positive change is what makes a chief executive….

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Technology

According to economists, factors of production are Land, Capital, Labour and Entrepreneurship. Land represents all natural resources, such as timber and gold, used in the production of a good.

In the 21st information age, internet technology has become a part of ‘Land’ in factors of production. Businesses are no longer constrained by geographical location but are opened to endless possibilities.

Every business owner therefore, needs to figure out ways to drive business activities with technology.

Service oriented businesses can drive sales exponentially using internet technology.

Get Social Media System On Track. Facebook, instagram, whatsapp broadcast, bulk sms and other social media ads
Get Website and Shopping Cart Setup Customer service/order receiving backend of transactions should be properly setup with an efficient integrated Payment system.
Invest In A Good Delivery System. In order to access market beyond immediate contacts, it is expedient to have an efficient courier service with tracking capability.
Get On eCommerce Platforms

Platforms like Konga, Jumia, Apereonline etc grant business access to a wider market.

5. Create A Promo Sales
Sales, discount vouchers and other promotional schemes may be deployed via social media platforms to boost sales and internet traffic.

Investment should be channelled into setting up an efficient eCommerce and Social Media Engagement Systems just as businesses invest in opening physical shops/outlets.

Remember, your market is beyond your shop…

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Products and Services

Any business that will maximize market opportunities and create a sustainable enterprise growth will consider the Supply Side Strategy (SSS) and the Demand Side Strategy (DSS)

On the supply side, every business owner would have to determine what product(s) to offer or push into the market.

On the demand side, every business owner would have to create service(s) that customers can demand or pull from the business.

A successful business strategy will consider both Products and Services. This is a Push -Pull strategy for sustainable business growth and business cycle balancing….

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Reward System

Any business that will survive in this environment will have to deal with issues of fraud, theft, sabotage, greed, unproductive workforce and general structural dysfunction.

It is assumed that every individual as a rational agent, will tend to maximize opportunities as presented even if s/he has to distort a working system. Business owners, therefore have to acknowledge this proclivity.

In order to reduce incentive for fraud, and system manipulation, it is important to design or rework the reward system in a way that stimulates productivity, efficiency, and gratuity. This requires deft and tact and the guiding principle should be to deliver a ‘win-win’ outcome for the organization and the workforce.

Any business that gets its reward system right will minimize the incentive for workers to corrupt, manipulate and distort its systems.

Remember that the best of any process and system is as good as the people that drive it.

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Control and Security Measures

In any environment, businesses are exposed to social menace of theft, hacking and burglary. Some key assets like inventory, cash, equipment, and data require control measures and security.

These measures can be categorized into:

(A) Engineering Control and
(B) Administrative Control

Engineering control requires:

1. Modification – installing features that can physically restrict access such as bars, locks, seal off compromised access points etc or features that can monitor activities such as CCTV.

2. Isolation – involves creating secure storage such as metallic safe boxes, vaults and reinforced storage facilities. If the business facility is sizable, it can be demarcated into “Asset Zones” with different deterrent features.

3. Substitution – this might be appropriate in some cases. For instance a desktop computer could be substituted for a laptop, POS transactions might be substituted for cash transactions etc.

Administrative control requires:

1. Controlling exposure by reorganizing processes, workflows or schedules.
2. Purchasing insurance cover for critical assets.
3. Having business policies that state how information, data, password, confidential documents, office keys etc are to be managed.

It is important to realize that not every employee is genuine with business interest at heart.
Some employees are security threat to the organization.

Business owners therefore, must learn to profile workforce and do proper background checks as business grows.

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Cash Flow Preservation

COVID-19 pandemic so far has been one of the worst global crises in recent history with severe economic impact on all businesses irrespective of size and location.

As business owners, grappling with the economic impact of this outbreak and the lockdown decision by government can be overwhelming.

What is, however, important now is to focus on cash flow preservation as one of the fundamentals that will ensure business continuity post-COVID.

The following are practical steps every small and medium business owner should consider in posturing for a better outlook:

1. Keep all production equipment in good working condition.
2. Expedite procurement of critical stocks to hedge possible price increase and stock-out situation. Just in Time inventory won’t fit now.
3. Renegotiate all contracts and cancel some of the monthly subscription-based services
4. Focus more on social media marketing and conserve fund budgeted for conventional marketing
5. Make efforts to collect all receivables. Cash will be critical to kick-starting operation
6. Continue to attend to customers’ inquiries online and maintain engagement
7. Start considering other areas of opportunity that can be harnessed post COVID-19
8. Consider salary rationalization. There is a need to ensure that the business can support minimum overhead for short term (3-months) to mid-term (6-months) period.
9. Consider creative ways to cushion inflationary effect on the workforce.
10. Listen to industry news and stay close to other business owners

Business will not remain the same post COVID-19. Brace up!

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Reorganization for Efficiency

As a business grows, its organization becomes hierarchical with many reporting lines and management levels. Business owners start recruiting workers and creating different departments to improve efficiency and management oversight. This increases the cost of running a business.

The post-COVID reorganization strategies should include streamlining business processes and using technology to flatten the organization.

Teams should be given higher responsibilities and training to make agile decisions with inherent supervisory capacity.

Business owners and managers should be on top of the mission and business-critical data, reduce business requirements, eliminate low value-adding work, restructure the jobs of any less-than-fully-busy employees and confront the problem of underperformers.

This will not only improve adaptability but will help in reducing the cost of doing business for overall sustainability.

Remember, one of the lessons learned during the COVID-19 pandemic is to differentiate between essential and non-essential.

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Business Relationship

February is known for celebrating love and relationships. And as we progress in 2021 one of the key things that would be essential in rebuilding many businesses is a relationship.

Relationship with workers, customers, suppliers, government agencies, and other stakeholders.

Misunderstanding, assumptions, and misalignment can damage good relationships. Efforts, therefore, should be put into reducing the information gap. Be clear on specifications and expectations. Show empathy and seek a win-win outcome.

And where relationship appears toxic and detrimental to the progress of the enterprise, it should be carefully evaluated using the RAST approach below:

1. Reconciliation
2. Adaptation
3. Separation
4. Termination

This approach carries different levels of effort, risk and consequence.

If businesses manage relationships properly, it will serve as a leverage to recovery.

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Product Development

The concept of marketing rests on four pillars which are:

– Product
– Price
– Placement
– Promotion

These variables are within the influence of an entrepreneur. The most important pillar is the PRODUCT. Without a quality product, every other marketing effort would be futile.

Every product passes through the introduction phase, the growth phase, the maturity phase, and the decline phase. This is considered its lifecycle.

As a business owner, having an interest in developing excellent products that meet customers’ expectations and also understanding strategies to maximize its lifecycle is crucial for business success.

Follow the link below to get a free download of “A Guide To Product Development for Startup Entrepreneurs”

“Any damn fool can make something complex, it takes a genius to make something simple.” – Pete Seeger, Product Director at Docusign

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Business Workout Session – The Art of Survival

The current state of the economy is taking a significant toll on businesses and individuals. Consumer confidence is reducing, whereas business expenses are increasing. Many companies had to tap their shareholders or borrow more to fund the operation. This situation leaves many entrepreneurs frustrated.

What can you do as a small business owner?

1. Activate your survival instinct
Assess your business situation objectively, visualize the future and draft the minimum objective function to take you there. Deal with only critical business issues.

2. Create a climate for success
Your employees or vendors may be disenchanted with you or the business. Sympathize with them and change the narrative to creating an atmosphere of possibilities. Activate and energize your team

3. Communicate
You must communicate with everyone who connects with the business and demand a sincere, accurate, and frequent flow of information.

4. Accelerate decision making
No time for unproductive meetings. Be agile and ready to take a calculated risk. If you miss the shot, learn from it and move on.

5. Negotiate
You should be ready to negotiate your survival. There would be a give and take. Keep your plans flexible and innovative.

6. High-performance team
It would be best if you had a performance-driven team—no room for sloppiness.

Know that survivors don’t quit, and they are always willing to bust their butts.

Think about this: “Survivors sometimes survive best by not surviving at all”…anonymous.

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Business Planning & Budgeting

Every year-end, businesses project and plan for another fiscal year. It is a crucial aspect of running a growth business, and owners/management of SMEs should consider the following:

There should be a long-term strategic plan that guides all other tactical plans.
There has to be a business planning process and cycle involving critical stakeholders in the business and deliverables.
The management or business owners must state clearly the key assumptions underlining the business plan.
The planning process must start with realistic revenue projections based on historical data and seasonal considerations.
The inflationary effect and the aspirational targets set by the management should guide expense projections.
The management or business owners should socialize the approved plan with the teams.
And there has to be a regular review and tracking of performance.

If carefully prepared, this document becomes the guide for running the next fiscal year.

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Building Alignment

Every entrepreneur needs to master the skill of building alignment. Relationships are the backbone of a business. Relationships between a vendor and a business, a client and employees, management and employees, etc., make a business. Conflict, miscommunication, and incorrect perceptions that result in terrible judgment are inevitable in any relationship. This problem is due to the possibility that the labels people use to describe their reality and how they structure their communications may compel others to interpret them differently.

Businesses cannot fulfill their goals if conflict or incongruence exists in every aspect of these connections. So it makes sense to become an expert in building alignment.

Alignment is not the same as agreement. Alignment focuses on comprehending how other parties perceive the situation and objectively analysing the issues to find practical solutions, resolving conflicts, and drawing lessons from experience. Alignment does not take a personal stance; instead, it seeks to comprehend the problems from the viewpoints of the other parties. Although the solution might not ultimately favour one party over another, it will still be the best to meet the business goals and strengthen relationships.

To achieve alignment, set a goal of making the other party feel valued, work to improve communication through various channels, show empathy, be willing to apologise, and accept criticism. Allow your values to guide your behaviour in whatever you do.