These short topical articles target specific areas of knowledge where a business owner's thinking and actions can make all the difference. Knowledge, coupled with the right actions, can and should increase your wealth through the power of your business!
Business owners who want to systematically increase the value of their businesses for themselves and their family, have learned that it takes knowledge, effectively planning, focused decision-making, and a consistent bias toward ... actions!
There is no substitute for gaining the required valuation knowledge and learning how to approach each day with the right mind-set. Once you can step back, reassess how you are managing your largest investment, and begin to "work on" your business...with a "proven value creation" process you will be way ahead of most business owners.
One of the hardest things to do for many business owners is to share financial information about the company with the management team. There is alway concern about confidentiality that relates to competition and personal issues. Such concerns are real and deserve consideration, but the benefits of providing the team with the "true" report card for the business are significant enough to argue for every owner to find the right way to include the management team in this way.
Timely distribution of monthly statements or portions of same that related to each manager's responsibility will put the managers in a better position to act to improve the results. There is also a hidden benefit. Once the managers feel that they are more "inside" the company they may react differently to various situations.
Think about the financial reporting...
"Business Intelligence" success comes form effective assessment of business lines and market segments to assure a positive match.
Market research is a critical function within any organization. Today the terms have broadened to "business intelligence". To succeed, every business should endeavor to learn "What it needs to know" and figure out how to acquire that information in a timely manner.
Information on markets or market segments should initially answer the following questions:
1. How big is the pie? (What is the estimate of the market size in $ and key potential customers?)
2. How big is the current slice of the pie held by your company? ($ or # of key customers)
3. Who has the biggest slice of the pie? (Who is the market segment leader in $ terms?)
4. What is the current market leader doing right?
5. What might this market leader be doing...
The strategies chosen will have the controlling influence on the successful accomplishment of any business plan. Consequently, it is essential to understand what strategy is and does...and what it is not.
STRATEGY focuses on EFFECTIVENESS...which is doing the
TACTICS by contrast emphasis EFFICIENCY...which is doing
Both are important, but becoming more efficient in doing the wrong things will only waste time and resources, so identifying the right strategies and constantly testing them is critical. There are huge costs to choosing the wrong strategies. Consequently, management must be open to changes or adjustments in corporate strategies when indicated. That is what it takes to continuously maximize the "return on effort" as well as the "return on investment" inside any organization.
Sound strategy development always demands
more THINKING...and better...
The late Senator Couzens was at one time the richest member of the United States Senate while Senator William Borah was reputedly the poorest. As Senator Couzens was leaving the Senate one day, he put his hand in his pocket to take out some money, and discovered that he had not a cent with him. He turned to Senator Borah, who was standing near him, and said: "Bill, can you lend me a dollar?" There are times when ONE counts.
The margin of one vote cast by Senator Edward A. Hannegan of Indiana made Texas a part of the United States in 1845. As a matter of fact, California, Oregon, and Washington were also admitted to statehood by margins of one vote. And the Draft Act of World War II passed the House of Representatives in Washington by one vote.
Thomas Jefferson and John Quincy Adams were each elected President by one vote in the Electoral College. Rutherford B. Hayes' election as President was contested and referred to an electoral...
The study reviewed six industries over a period of approximately ten years. The study left no doubt about the benefits of planning… planning of all types. The study results of planning vs. not planning are shown below:
Benefit of Benefit of
Too many managers are quick to chose a strategy and too slow to recognize the costs associated with execution of the wrong strategy. It pays to take a little more time to get on the right track and to then continously assess the results against expectations.
There are Six Big Costs that can be avoided by taking the time and doing the research and thinking to establish the correct strategies in each business area. Take a look at the costs you want to avoid. Start right and finish on target and on time. Start wrong; fail to assess and change and you will be dragged under by these Big Six Costs:
1. Direct project-related expenses that do not provide the desired result. (You can only spend it once.)
2. Man-hours of effort invested by all direct and indirect employees involved to execute the strategy. (In most...