We will not go into formal definitions of business. Let’s call business any activity within the legal framework, with the aim of generating income. From this point of view, reasoning about business improvement is extremely uncertain. This article has attempted to highlight the generalized characteristics of a business. If this succeeded, the advice will be abstract and can be applied to absolutely all types of activity. In this sense, business improvement is the complex measures that need to be applied to the activities of the enterprise in order to:
- to increase its financial efficiency, profitability;
- to reduce the risks accompanying any business activity;
- to minimize the time and effort to turn the business into real money;
- to ensure the future of business, that is, to rationally invest in its development.
The main thing that determines the characteristics of a business, regardless of its application, is the personality of the entrepreneur himself. It is on a specific person that both the success of the enterprise and the ways of achieving this success depend.
Over time, more and more situations occur when a person starts to manage an enterprise without having experience in this sector. Well, for example, there has been a reorganization of an enterprise, a re-profiling of activities, or a favorite topic of television series has arisen – a person has inherited a ready-made business. The activities of the company, in which he became the first person, is not familiar to him in the intricacies.
In this case, a person either hires a manager, transferring to him all the rights to manage the enterprise, or tries to restructure the work of the company “for himself”, in accordance with his understanding of the situation and character of the warehouse..
But in any case, “each broom sweeps in its own way,” and the profile of the enterprise directly depends on the character of the entrepreneur. Anyone can navigate only a certain amount of tasks. The larger this volume, the more centralized the management, the more clear and definite the functions of the “middle link” and specific performers. Employees at such an enterprise always know what they have to do, and labor discipline and the lack of free time among the staff is one of the indicators of the “correctness” of the boss.
The psychological portrait of the first person influences another important characteristic of entrepreneurial activity. A business based on the speculative movement of resources is different from a business based on long-term investments. “Speculative” business is characterized by high profitability, fast turnover of funds and high risk. “Long-term” – the opposite qualities, but it has its own advantages – stability, focus on the future.
But if we are talking about the influence of the head on the entire work as a whole, then from this point of view, the business can be divided into “active” and “passive”. The difference between them is significant. An “active” businessman decides for himself where to allocate resources, which project to promote and what to do in this project. “Passive” business is usually associated with investing. Transferring management of your own resources to other people is a separate and very complex activity that requires long-term forecasting of the market situation.
Now about the rules that an entrepreneur in general and an employer in particular need to know. Let’s start with the “speculative” business.
The first rule is efficiency, adjustment to external conditions and quick response to their changes. Constant (up to every second with the use of software) monitoring the situation in their area, tracking the demand for goods or services, searching for suppliers, buyers and intermediaries – this is what this type of business faces. Additional costs are associated with high promotion costs (promotions, presentations, etc.). However, with the skillful use of these funds, incomes turn out to be higher and bring the necessary profit. In this case, we are recommended to use slack sms as a solution for this rule.
Second rule, the ability to foresee the market situation in the short term. The specialist is obliged to predict the changes that will occur in the market over several operating cycles. Moreover, the specialist must take appropriate measures to anticipate possible changes. A specialist’s mistake can be costly for the company, but it also needs to be insured against a possible mistake. It is necessary to change the range of offered goods or services. At the same time, you need to maintain the ability to offer traditional, already proven products or services as a defense against the marketer’s mistake. The difficulty is that these two mutually exclusive actions must be done simultaneously. It is obvious that protective measures against their own steps distract finances, people from the developing business and require time expenditures. But this must be done, if the company does not have additional insurance methods. However, if the marketing is carried out correctly, the profit from the market remains with the one who guessed the trend and managed to restructure his work in time.
The third rule is the ability to use inside information. This rule applies to those who have this information or can get access to it. Using insider information, it is easy to prepare in advance for changes in the market and act in accordance with the second rule, even without insurance. However, those who use the third rule are teetering on the brink of the law. The third rule may or may not be used. If there is a professional specialist, he even without an insider understands what trends have developed in the market at the moment. This data can serve as a starting point for anticipating possible changes. Next, you need to rebuild the sales policy of goods (services) – and you can “cut coupons”.
The above rules can be used by both hired managers and business owners. But if an employee is responsible for his actions only by his workplace and “good name”, then the owner risks all his property. Therefore, the owner is always in an “active” or even “hyperactive” status. And he cannot go to another state either during the day or at night, or during work, or on vacation. Such psychological pressure should be taken into account by those who dream of the delights of “their own business”.
The fourth rule of “speculative” business can be called simply: maintaining maximum liquidity. “Speculative” business is least protected from external influences. Therefore, the owner is obliged to keep his business in a pre-crisis state. The business must be able to be sold at any time, and its cost must be high, and the sale time is minimal. Therefore, production with a sufficiently long operating cycle cannot be classified as a “speculative” business. The sphere of “speculation” is trade and operational services, better – with 100% prepayment and minimal overhead costs. This is a rule, but there are exceptions to any rule.
The fifth rule refers to the exception to the fourth rule, that is, to the sphere of production. “Active” business presupposes not only efficiency of management, but also efficiency in the development of new industries. The ideal case would be the production of different products on the same equipment. At the same time, the re-equipment of workplaces should take the minimum amount of time. At the same time, the costs should be minimal. A modular workshop equipped with easily reprogrammable CNC machines should serve as a benchmark for such production. But this rule also has a Russian version. The use of extremely cheap labor of illegal migrants is the basis for the cheapness of production “lines” and their low cost. The quality of the goods, of course, leaves much to be desired. But the modern buyer will go to the deterioration of the quality of the purchased goods,…