Firms overestimate the demand for the product or the product is priced higher in comparison to the service it provides. In either case the numbers do not match and the product ends up without a shelf. When setting a price the product needs to be profitable, for the firm to sustain itself over time. The cost needs to match up with value the service provides. Most failed businesses have not got the equation right. A business needs to understand the price a customer is willing to pay for the service rendered by the product.
Expansion should be a well thought of decision. Sometimes moving into unfamiliar or mismatched territory spells the downfall of a product. Before entering a new market a study of the pros and cons should be done. A new market
translates to a lot of investment as well as major funding for setting up the business. Too much borrowing can result in higher interest rates as well as lack of ready funds for the existing market.
Investing in the right CRM goes a long way in handling resources and customers. A flexible CRM solution like the Microsoft Dynamics CRM offers businesses a powerful tool to get closer to their customers. A good CRM will ensure that you get the most out of your marketing and sales efforts, and will enable you to provide best-in-class customer care. UXC Eclipse Microsoft Dynamics Partner offers a flexible CRM solution to meet the needs of a growing business.
Lack of cash buffers
Cash deposits are important. Most business ventures fail to capitalize on creating cash buffers. For a business to grow and expand having a buffer is important. The market is constantly changing and upgrading, so are the customers as well as the competitors. Having a cushion to fall back on during the hard times, keeps the business safe and helps it to tide over the difficult times.
A good accounting software as well as the right accounting firm are crucial for a business. A good financial consultant can steer the firm in the right direction and should not be compromised upon. If you cannot afford a Chief Financial Officer on board then tie up with a renowned financial consultant. The business owner should not try and wear this hat. The consultant will not only help with the taxation but will guide the business owner in investments, growth and expansion.
Entrepenuership has it’s numerous advantages. However, running the show requires discipline and an openness to change. As a business owner one has to understand the dynamics of the
market and be flexible to all that is happening around. Most businesses fail over time, as they refuse to adapt to change. The task of day to day management is enough to keep one on their toes and can lead to wrong decisions, due to unavailability of time and mindset.
Most business owners end up hiring more and more staff to handle everyday problems. This is not the best of solutions at all times. More staff means more hiring which means more decision making at the top level. Bringing in an enterprise management software leaves you with more time to do what you do best – run the business with a free mind.
An ERP System provides a business with easy management of new processes, departments etc. You can start small with an enterprise management system and scale it over time to accommodate the additional needs. Over time you will find that efficiency increases as reporting and data management become easy with the software giving you access, to different data. With an ERP system reporting follows an automated template system, allowing various departments to access information seamlessly.
A well run business results in happy and satisfied customers which results in more word of mouth marketing for your business. Referrals increase and the business prospers. Efficiency of a system results in better hiring of staff and reduces the cost of operations. Since delays reduce with efficient data collection and reporting, the cost of operations are lowered.
An ERP Software that includes an accounts payable (AP) and document processing automation software enables organisations to be more efficient and gain more control with an invoice processing automation. UXC Eclipse offers Readsoft to enable document capture and processing solutions. It’s major benefits include: A single point of entry for decentralized invoice processing, Straightforward access to invoices, Elimination of duplicate invoices, Assess cash flow more accurately, Faster invoice processing to take advantage of early payment discounts, Minimize costs and space required for paper storage – all leading to an efficient, well run business.
Words are important as they send a message and help communicate what is in our mind. However it is not just the written word that counts. The “how” is important, as it gives the right meaning to what is being said. These few lines as said by Walter D. Scott give the gist of communication. “Advertisements are sometimes spoken of as the nervous system of the business world … As our nervous system is constructed to give us all the possible sensations from objects, so the advertisenent which is comparable to the nervous system must awaken in the reader as many different kinds of images as the object itself can excite”.
In other words we advertise to bring forth a need in the consumers – a need that can be fulfilled or identified with the product being advertised. Ads have moved a long way from word of mouth advertising to printed messages on signs, street-car placards, booklets, calendars, almanacs, handbills to traditional advertising in magazines,newspapers and so on. Over the years mass advertising as given way to selective refined mediums of advertising such as digital advertising. This has led to the growth of a number of specialised agencies that address all advertising needs. If you own or manage outdoor advertising assets, or believe your property has potential as an advertising site, FM Digital will help you drive new income to your organisation. As independent outdoor advertising specialists, FM Digital Signs offers a full spectrum of advisory and advertising development services.
If advertising messages aim to satisfy a need, then it becomes important to understand how your product satisfies the need of a particular community. In other words the Unique selling proposition of a product with respect to an audience, becomes important in advertising. The advertisement picks up this USP and builds a story around the same to get the attention of the audience. Understanding your audience is important in choosing the words and how they are said. An advertisement targetting a group of 60 year olds is going to use very different words than an advertisement targeting a teenage group. Add to this the socio-economic background and you will again have different mindsets.
Going into the detail of the product, the audience allows the agency to show rather than tell a story. It makes for more productive and stronger advertising.
What makes one firm more successful than the other? Take the top private equity firms like Berkshire Capital, Bain Capital or Permira and you will find that the annual returns recorded are more than 50 percent – not just a one time case but delivered consistently year after year. What drives these firms? What gets them to rise above the rest? Maybe we can learn something from their success and create a path of our own. Some conistent steps that lead us to the goal of success would be:
There are a number of advisory companies that help you with the leagal issues. Steinepreis Paganin Commercial Lawyers provide advice to companies seeking a listing, listed companies, large private companies, investment banks, broking houses, high net worth investors and private equity firms on their general corporate and commercial matters.
Balance goals with expectations
A typical firm manages around 20 or so portfolio of companies. Understand the time taken to achieve a task and don’t be overly optimistic about the time frame for turning around the business. As mentioned by Spencer Stuart ” In most cases, portfolio companies must be strategically transformed and restructured to reach the level of profitable growth required to accomplish the exit strategy, whether it is selling the company or taking it public. What works is investing in an intensive “outside-in session” with management after the transaction closes. This ensures that all agree on a set of facts and data, and together define what full potential is for the business. This can then be converted into a blueprint that details who’s responsible for what and how fast.”
Keep the balance between debt financing and unproductive capital, fixed assets and working capital. Not all assets can become a source of financing. Maintain the debt equity ratio. There is capital which remains classified as unproductive. Identify and accept unproductive capital and be willing to let go when the right opportunity comes along.
Focus less on the stock-market
Don’t just limit the role of the firm to that of a shareholder and just focus on the value of the company stock. You will loose focus and move away from the growth of the firm. Stick with priorities where the first role is that of an employer and the second of a shareholder. Keep a close watch on rising shares and plummeting stocks but don’t make it the mantra of the firm.
Be a leader in the true sense
The key to leadership is not authority. True leaders lead by example and influence others to follow their path. Effective leaders help people understand what their contributions are and how the are an essential part of the growth of the organisation. Focus on inspiring your team to work willingly for the greater good of the firm. Inspire by enlisting the help of others and not through authoritative rules and regulations. Align equity holders and the management team around business objectives.