EDITOR: The second edition of BIZTORIALS MEETUP held today, 7th September, 2016 and the interactive section was quite intense. Mr. OLAMIDE B. FALASE, Business System Consultant at Infodigm was the resource person. Here are some of the striking points:
A Business Goal
A lot of times when asked why we do business, business owners give responses like the desire to make impact, bring services and goods to their clients and many other reasons. But the goal of every business is simply to make profit. If you are not making profit in your business it’s either a running charity or an NGO.
Every business axiom should be sales minus expenses equal profit. The goal of a business manager is to grow sales and reduce expenses and the result surely would be an increase in profit.
Every business model runs from CASH, to RAW MATERIALS, to WORK IN PROGRESS, to FINISH PRODUCTS, to SALES and then finally back to CASH with interest. This basically is simply converting cash to profit.
Money Is Not The Most Important Factor
Businesses fail not because they don’t have capital but because they don’t have clarity on the business. The know-how of the business is as important as the financing of the business. Every business idea should first be explored and understood by its operatives before embarking on.
Business is what you teach your business to do. Two companies can be delivering same goods or services but the differentiating factor is what they have informed the business to deliver. That is the business model.
You Can’t Get Rich Working For Somebody
A lot of persons must have heard that you can get rich working for somebody but that includes you too. You can actually get rich if something is working for you. Create a system, a product, services that would work for you and then build it to grow. When you are running your business, the business is working for you while you work for the business.
A Defined Production Plan
Every business must have a well-defined PRODUCTION DESIGN that every staff assigned can understand and operate with without uttering the result or end product. Your passion as a business owner is not enough to run the business. You must delegate persons to different aspects of the business and train them to work like you would if you were the one handling the task. While hiring staffs, you must delegate them to assignments and never leave them to operate by their own knowledge.
You Need A Good Budget
As stated before, money isn’t the most important factor. Having considered all that is said above, you require a good budget plan. Every factor must be considered from inception to the finished product. Your profit plan must account for every simple item that goes into production.
The Importance Of Pricing
Every business must learn to locate or create its clients. The price of your product should not necessarily be determined by your client’s response. You must understand and communicate the quality of the product to the clients first. Never price your product down unless you are ready to adjust the entire profit goal. The profit goal should always span a period of time and the nature of the product and production factors must be accounted for. Lowering Price will affect the profit goal and increases expenditure unless of course it is accompanied by volume sales.
Good Accounting System
Always use a well-organized accounting system that works. The accounting reports should be drawn often so you can monitor the growth of the company and be sure you are on the right part on actualizing your goal.
Standard Operating Procedure (S.O.P)
Always remember that an effective working process is the stability of any business. The STANDARD OPERATING PROCEDURE must be built from the beginning. The system must be handed down to every staff. Staffs must be taught what to do and how to do it, no assumptions. Processes must be well written and documented. Your SOP is your business. There must be a way to do a thing before you think of initiating a better way.
In conclusion, Planning is the most important thing in a business. As much as financing is important, it needs a working system to support it. So your system, structure and process are important and your finance enhances them to get to the goal of the business.