Saturday, 16 January 2016

How to manage small business- 7 practical guide

Few small business can stand the test of time. The most noticeable reason apart from lack of access to credit facilities is poor managerial skills. This is noticeable in the owner's display of inexperience, financial indiscipline. Hundreds of small businesses seldom stand the test of time.
However, few other small businesses has exceeded expectations. It is noble to write about the best ways those businesses are been managed.

Keep detailed book of account
It is practically impossible for any business to survive without good financial records. Financial Records entails details of asset and liability, income and expenditure, opening and closing stocks. The essence is daily, week and monthly review and adjustment when necessary.
 There are 3 basic ways of keeping financial records
1. Manual- recording the details in book
2. Digital- the use of computer which could include basic package like excel sheet.
3. Hybrid- the use of books and computers.
Hybrid is the safest method. However, if digital is used, it is highly recommended the data should be backup real time.

Practice good inventory management
Inventory includes stock, raw materials and work-in-progress. Two basic ways of managing inventory
1. Manual-depending on human
2. Digital- the use of computer and other device for inventory records.
Business size and type determines the best method to choose.
It is advisable for the business owner to pay for any stock taking for personal use.
The essence of inventory management is to determine opening stock and closing stock for real time update.

Device and perfect a clear business Strategy
Business strategies includes marketing strategy, customer service strategy and organization development strategy. Superior business strategy could improve brand perception and revenue. The difference between successful and failed business is 'strategy'. Irrespective of the size of business, good business strategy could do wonders.

Separate business from relatives and friends
Small business owners most are guilty of mingling business with interest. Businesses that offer free service to friends and relatives will definitely fail in the nearest future. It is also advisable to explain to friends and relatives 'why' you wouldn't be able to offer free service or products. Finally, pay for any gift and free products given out of the business.

Seek legal Advice
Professional expert advise about sensitive decisions and issues relating to employees could help avoid litigation.

Device a Strategic plan
Having a long term business plan could assist in the strategic direction of the business. Written answers about the long term future of the business could avoid policy gambling to policy specific.

Take Responsibility
Yes! It's your business- take some responsibility when it seems the strategy employed isn't the best. Learn and make adjustment quickly. Takes note of what has worked and stick to the winning strategy.


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