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 Business
Management Issues
Introduction to Business Management - today's
business managers need to have a range of skills and experience to
succeed. For owners of small businesses, maintaining up-to-date business
management skills and developing new ones, can be challenging exercise.
The time-consuming and day-to-day activities can sometimes get in the way
of pure thinking time, to plan for the future. There are lots of
soft people issues which sometimes require tact, diplomacy and business
management instinct. These business management issues may include employee
motivation and stress, training, morale and dealing with change. Spending
time thinking about the bigger picture can also be difficult to do in the
face of every day priorities....
Business Networking
- the power of word-of-mouth recommendation
from individuals in a business network, is a critical managerial skill. As
small businesses struggle against larger competitors, differentiating
themselves is becoming more and more important. By providing good quality
customer service and a 'personal touch', small businesses are more likely
to obtain an objective referral from a delighted customer, or like-minded
member of a business network.
Business networking is a term used to
describe an exchange of information, ideas and contacts between
like-minded business people, for the purpose of generating prospective
sales leads. Many business owners network all the time. In
fact, anybody who sells a product or service and wants to capitalise on
the goodwill generated from existing clients, can encourage their
customers to provide referrals. It is not a new phenomenon and has been
around ever since commerce began. Today, small business owners who
exploit the power of referrals from word-of-mouth can shorten sales
cycles and increase their overall sales pipeline. Compared to cold
calling prospects, the power of business networking means that the overall
cost of sale is reduced significantly, compared to cold calling.
Effective Supplier Management
- small businesses, rely on sourcing
products and services from a range of different suppliers, to deliver a
business service to their customers. Choosing a reliable supplier is
an essential business management decision, and may impact future
profitability. For small business start-ups, choosing which
suppliers to use to provide raw materials, products for resale, provision
of utilities, office supplies, or critical IT support services, can be a
bit of a challenge. The supplier evaluation process itself can be
time-consuming, (and with all of the various special offers), may feel
like 'comparing apples with oranges'. Consequently, many
managers do not spend enough time evaluating which supplies to deal with,
and which ones to avoid. It is important to have a good understanding of
your trade supplier's situation and needs, to minimise the risk of
instability and nasty surprises. Larger ones may allocate named
account manager you to build a personal relationship with. By
sharing information and establishing a day-to-day working
supplier
management relationship with the account manager, trade supplies can be
better maintained. Never assume your supply fully understands your
internal business workings and priorities. By undergoing joint
planning regarding stock levels, peaks and troughs throughout the year,
financial concerns and quality issues, trust is improved on both sides.
Managing the Workplace - managing
the workplace is also a key area of business management. It is vital that
business owners are aware of discrimination laws and employment best
practices to help look after employee's safety and well-being in
the workplace. But some operational workplaces may have hazards to manage.
In all workplaces, accidents do happen naturally through human error.
Therefore, proper implementation of safety policies and knowledge of the rues and
safety regulations is paramount. Business managers also have to
manage employee workplace stress, absence, sickness, disputes and office
politics. They have to make their people feel valued, happy, secure and
well looked after. For many small firms on-the-job training is also an
important area of ensuring their workplace runs efficiently and
productivity.
Leadership Skills Training - as
small businesses grow in size there is a need to begin to delegate tasks
which owners cannot do themselves anymore. Developing effective leadership
skills is a critical area of business management. Ensuring managers have
the right leadership communication skills, team building skills and
motivation is paramount. Sometimes leadership skills cannot be taught and
have to be learnt through one to one mentoring or practical industry
experience. It's imperative to build up junior staff's confidence and
understand and empathise with their needs and aspirations. Great
leadership has to encourage and inspire through example. While many small
businesspeople may be good specialists, they may be inexperienced at
motivating a larger team of people. To avoid staff problems such as low
morale and de-motivated employees, managers need to look inwardly at their
own abilities to lead and inspire good practice in others.
Production Activities - Make
or Buy - firms which manufacture, produce or distribute large
quantities of products or stock, need to choose whether 'make or
buy'. In other words, managers need to choose whether or not to buy in the
finished good from a third party, or alternatively convert raw materials
and manufacture the product in-house. These management decisions are
fundamental for manufacturers and production firms. Tying up valuable cash
in stock for long periods is key to choosing whether to make or buy.
Business managers should have an understanding of the overall cost of
the manufacturing process and its impact on the cash flow.
The Pros and Cons of
Outsourcing - deciding whether or not to outsource non-core
business activities, can be a crucial area of business management.
Outsourcing is simply seen by many as a way of reducing costs and freeing
up internal resources to concentrate on core business activity. For
example, many small firms choose to outsource payroll to an accountancy
firm, while others will outsource information technology services due to a
lack of technical expertise in-house. There are a huge number of firms
providing business services who can take the workload of manager's
shoulders. Full outsourcing usually entails commercial responsibility and
employment of staff to carry out all the tasks required to complete a
business activity. Yet most basic outsourcing involves employing the
business services of local suppliers who can carry out specific tasks,
without taking over employees payroll and employment.
Managing Business Risks - managing business risk is an
important business management function for small business owners.
Predicting the impact of external economic pressures on a firm is
essential in business management planning. For instance, rises in interest
rates, falls in market business confidence and currency volatility can all
disrupt a firms cash flow, cause loss of profits and increase overheads.
Managing business risk also entails assessing the likelihood that
disasters may happen inside the company which will also affect the bottom
line. These may include a company being sued, paying an employee following
an industrial accident or recompensing a customer for a product defect.
There are many business insurance policies set up to mitigate the impact
of risk which at a premium, can alleviate stress and worry in the mind of
the business manager. Nearly all business decisions involve some element
of risk and reward. So a practical and objective analysis of the
firm's business strategy should in include identifying the associated
risks, their financial impact and likelihood of occurrence.
Related Content: Business Networking Supplier Relationship Management
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