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How To Deal With Suppliers and Negotiate

Mon, 08 Jun 2009 13:33:00-0500

There is an old saying - buyers beware. The cost at which you procure goods has a huge impact on your profits as it is the single largest component of your overall cost. A service on the other hand may constitute a smaller portion of your overall cost and may have a great impact on your on profits yearly basis as well. When it comes to dealing with suppliers it is not only your negotiating skills that matter because price is not the only consideration. The first thing to do when dealing with suppliers is to set your objectives and prioritize them. Be absolutely sure in your mind on the things that you are ready to compromise on and the issues that you will not. The better way is to prepare a list. There are many things that you will have to consider while striking deals with your suppliers. Here are is a short list. ? Price: This is obviously the major thing on your mind but you may have to compromise on it o if you are looking for a faster delivery o if you are facing a liquidity crunch and want payment terms to be relaxed o if you want better after sales service ? Value for money: Value for money cannot be understood only as the minimum purchase price. Value for money is also based on the maximum efficiency, quality or effectiveness of a purchase. ? Bulk purchases: If you are buying in bulk you would want to find a buyer that gives you a discount. Dealing with such buyers can be tricky because you have to build a relationship first and look for better deals as you go forward. ? Building relationships: There are times when you know that a particular supplier is important to your business and you have to do business with in future also. In such cases your aim should be to negotiate a price that both parties are happy with. It pays to do a bit of research into a potential supplier. Check out if a potential supplier needs your business. Remember that your bargaining power depends upon this. If the supplier needs your business you can negotiate a better deal on the other hand the situation will be loaded in the supplier's favor if it is running a near monopoly. When you research potential suppliers check out the following things: ? If it is a new entrant in the market and has a number of competitors. ? If the supplier is stuck up with old stock and is constrained to dispose it off. ? Whether the supplier needs to fill production capacity. ? Whether you are the main customer. In all the above situations you have a strategic advantage and the power to negotiate from a strong position. While you are at it also check out the key staff members with whom you should negotiate. It is no use wasting your time with junior staff that is not in a position to take important decisions on policy matters. Besides all these things you should also make sure that you run your own business in a way that you are not at a disadvantageous position. Do not let you inventory of crucial raw materials to fall to levels that force you make panic purchases. If you have liquidity problems weigh the discounts on cash purchase against the interest you would have to pay if you borrowed from the bank. Always ensure that you have more than one supplier or service provider for each product or service. All said and done, regardless of your strength and weaknesses your relationship with your suppliers is very important. If you have relationship based on faith and mutual understanding you can be sure of getting a good deal from your suppliers. While negotiating, ensure that you leave something left on the table ? if your supplier makes a profit only then will he be interested to deal again with you.

Managing Human Resources

Mon, 01 Jun 2009 13:17:00-0500

If your new business has taken off, at some point of time you will have to think about hiring staff to assist you. Before you advertise a vacancy, the first step however, is to ascertain if you REALLY need help as it is an expensive business. While hiring new staff, keep in mind that your company is as good as your staff. Your employees are your representatives and every thing they say and do is going to reflect upon you. Basically your first meeting with a potential employee is the right time to assess whether s/he is the right kind of person you are looking for. Prepare a job description after assessing the nature of skills, experience you are looking for along with details of the nature and objectives of the job with main duties and tasks. You also have to consider whether you need part time staff or full time. Or you may be expanding into an entirely new area and require a completely different set of skills. Part time staff is obviously cheaper to hire. There are also many recruitment agencies that will do the job of finding the right candidate for you. You could also try employing a worker on temporary basis till you are sure you have the right one. Hiring temporary staff is lot easier as there are many agencies that will do all the legal work themselves and also pay the workers directly. There are also a large amount of legal issues involved, which you should be aware of before you advertise. While discrimination on the basis of gender and race are well known, the new age-related discrimination laws can also land you in trouble if you are not careful. To avoid getting into legal hassles, it is better to start a selection process. Ask for candidates without specifying any personal details other than name and contact number. Just as finding the right candidate is crucial, retaining efficient staff too requires a fair amount of effort. You have to keep in mind that although commonly termed as 'resources' humans are not a commodity but creative and social beings in a productive enterprise. There may be personal reasons behind what each individual wants from work. Some love to work, others work for personal fulfillment and/or to accomplish goals through meaningful work. Some truly love serving clients. Whatever may be the personal reasons, the bottom line, however, is that most people work for money. Fair benefits and pay are fundamental to recruiting as well as retaining staff by any company. Without a fair living wage there is always the risk of loosing your employees to a better paying employer. Beyond that you have to work towards motivating your staff. If you want productivity, quality and service from your staff you have to keep them motivated. At the end of the day, motivation is all about giving to people what they really want the most from work. The mantra of managing human resources is that the more you are able to give your staff what they want from work the more you can expect what you want from them. In turbulent times as well as during normal course of business, commercial success depends largely on your employees working to their full potential.

Delegation of Authority

Mon, 27 Apr 2009 13:44:00-0500

When you start a business on your own it is usually a small scale venture and you are able to handle everything on your own. Once the business starts growing rapidly, you may start to feel that the growth will continue only if you continue to be involved keenly in all the activities starting from finance to marketing and sales and even administration. This is one of the major mistakes that some budding entrepreneurs make. Many new businesses fail to grow after an initial phase simply because the owners are reluctant to delegate authority. Delegation of authority as the business grows is an important factor for maintaining the initial spurt in growth. When your business moves from a small venture to a medium or large scale enterprise, there is a commensurate increase in workload in all fields of business activity. If you continue to believe that you are the only one capable of managing all activities in the manner that they should be, you are likely to do a great disservice to yourself and your business. Delegation of authority is essential to ensure the smooth functioning of day to day business activities. Delegation of authority is basically the action taken to assign a part of your responsibility and authority to your juniors or those who are experts in the field. While you may assign the task for someone else, delegation does not mean washing your hands of the decision that is taken at the end of the day. Since you are dividing the task that was performed earlier by you, there is a need to specify the extent of authority that you are willing to pass on and the areas that you will continue to keep under your direct control. There is a need to ensure that: ? The decisions taken by your subordinates are in line with company policy ? There should not be any overstepping of authority by your juniors ? The targets set by you have been met Admittedly the human body and mind are capable of much more than what we normally think. However, despite that there is a limit to the amount of work that one person can handle. The desire to see a business grow rapidly and beyond the small scale of a one-man-operation, the art of delegation needs to be learnt and practiced. It is also important to remember that while the idea that you with regards to the niche that you wanted to operate was yours, the business becomes more than a personal asset once it starts to grow beyond a certain size. Letting go is extremely important while keeping a close eye on the essentials. You can then spend more of your time in developing newer strategies to ensure quantum leaps in business growth. By delegating authority to subordinates you are actually moving into the managerial domain, the right place that you should be in after having personally guided your fledgling enterprise to a position of strength. You may have ignored your family and friends in pursuit of success. You now owe some quality time with them and this time can also be used to socialize. Socializing, you must have realized by now, is as important as managing business as it helps in building contacts and developing new business relationships.

The Importance of Keeping Accounts

Wed, 18 Feb 2009 14:23:00-0500

Keeping track of expenses is an important part of managing your finances. This aspect of financial management is all the more important if you are running a business. While salaried people and housewives can do so in a mode of their choice? on a spreadsheet or a diary, businesses require proper books of accounts prepared in a way that relevant information is readily available. Although it is highly recommended that accounts should be updated on daily basis it depends largely upon the scale of your operations. Keeping business accounts is extremely necessary because managing your business requires you to view various reports from to time. If you have recorded your activities relating to purchases, sales, and expenses you are in a better position to control company finances. In fact, lack of financial control has often been quoted as one of the major reasons behind failure of business ventures. One of the major mistakes that people, especially new entrepreneurs, make is to overlook some items of expenditure before arriving at the correct cost. While cost of acquisition includes the basic cost plus expenses incurred on acquiring, the establishment and selling expenses too need to be taken into account. Unless proper accounts are kept it becomes extremely difficult to arrive at your cost and profits that you make on sales. Cost control is another important part of business regardless of whether you have recently started a new business or have been doing it for years. For that purpose it is important that accounts are maintained in a proper manner and format. Account keeping helps you to regulate expenses and view whether you are within targets or overspending. Business is as much about marketing, procuring/manufacturing, maintaining an establishment as it is about meeting commitments. Account keeping involves recording all these in a manner so as to record revenues, receivables and payables so that you make commitments that you can actually meet. One of the most important aspects of keeping accounts is claiming expenses against tax. There are numerous items of business expenditures that you can claim as deductions from your income. Unless you have prepared your accounts you are hardly likely to remember these items at the end of the year. Moreover, if you have already borrowed money or intend to, the lender will like to know the level of your profits to ascertain your repaying capacity. Your accounts are the only evidence that you can provide and without evidence there isn't going to be any loan. As mentioned before, cost control is a major factor behind the success of any enterprise. To save on an accountant's fee it will do you good if you do the basic bookkeeping yourself. The lesser time the accountant has to devote to prepare an annual summary the lower his/her fee is going to be. Nowadays, most businesses have done away with actual books and prefer computerized accounts. There is a wide range of accounting software available. You need not be a computer professional to use one. Get hold of a user friendly accounting software and all that you need to do is to feed in relevant data of purchases, sales and expenses. The software prepares reports and summaries automatically and they are there for you to see at any point of time.

How to Re-Strategize Your Business at the Beginning of the Year

Tue, 03 Feb 2009 11:13:00-0500

So you had a solid business idea and have decided to capitalize on it and have set up a business. You feel that you are doing well. But the trick to success is to ensure continuous evaluation of the business to ensure that you do not lag behind others or fall prey to new entrants into the niche. While your accounts may tell you the amount of profit you make in a year, the important thing to remember is that your new business idea is now out in the open and a lot of people in the industry have heard about the new offering. If your idea is actually resulting in a good return on investment, you can be sure of the fact that either competition already in the market or just around the corner. Since there are new challenges that always spring up in any business, it is essential to research the changing needs of the customer, what your competition is doing and ensure that you always stay a step ahead of both. Business is a continuously changing theme. It is criminal to continue 'business as usual' even if you have not had a bad experience with the current strategy. Successful businesses are built by analyzing where you are and where you need to get to before any strategic plans are made. Letting the guard down at any time can be a crucial 'death knell' for the business especially in a changing environment such as now. The real difference in why some people succeed and others fail in the same business is primarily to do with the fact he successful business owners continuously examine and re-examine their strategies. While examining strategy is a continuous process, it is best done at the beginning of the financial year to ensure that the strategic operational initiatives can be measures from a financial perspective at the end of the year. The first thing to do is to brain storm with your colleagues and arrive at where you want to be at the end of the year. It is important that you give your goal a financial and clearly measurable objective so that biases do not come in the way of evaluation at the end of the year. Once your objective has been decided the main goal, obviously, is to develop new strategies to reach that goal. To start of think of new strategies, a good idea is to evaluate the year gone by ensuring that you asses the various initiatives that were taken and the ones that paid off in a quantitative manner. All marketing, cost or price related and logistical initiatives can be measured quantitatively if you have thought through the manner in which each shall be evaluated. It is important that you take a serious and objective view at how you conducted your business in the year gone by to be able to arrive at the initiatives that you will continue into the next year and those that you will rethink, modify or drop. While you are carrying out this exercise, there are a few things that you should keep in mind. - Understand whether the goals set for the past year were attained or not. If yes, then update your goals and set more challenging ones for the next year. If not, then discuss the reasons why these were not met and then try and devise a new approach to the challenge. Go over each problem and find ways and means to over come them this time. - Try and avoid trying to find a scapegoat for every goal that is not met. While it is important to understand what the real reason for a failure was, 'witch hunting' should not be made the main objective of the task. This only results in mud slinging and divides your management team only to create unrest among peers. - Hiring and firing may seem the diktat of the day but remember there is a fair amount of money spent in the hiring process and precious time is also lost. Instead, assessing whether the morale of people is the real reason for poor performance and addressing that instead can ensure a turnaround at times. - Be frank and do not shy from accepting shortcomings. Remember no one is perfect. Instead of trying to be perfect, simply focus on weak points and devise methods to gain strength in those areas. - Discuss new ideas in detail. See the ones that can work and develop strategies around them to take your business to the next level. Your clientele is your best marketer. Pay attention to how to earn referrals, get repeat business and testimonials from them. It may appear to be an expensive proposition at first but consulting qualified professional experts is a good policy. The improvement in sales eventually compensates the extra expense. Finally, regardless of your line of business, keep your eyes open for newer acquisition options and ideas that you can adopt in your business. Sometimes these ideas can come from businesses in other niches as well. Reading about your industry and other business initiatives can allow you to get more ideas for future extensions of the brand or product that you can extend your business to.

Setting-up A New Business Venture

Tue, 20 Jan 2009 11:04:00-0500

Setting up even a small business venture involves a lot of things. However, such a statement should not discourage you from attempting to get creative about new business ventures. There are many people who prefer to work independently and be their own masters without an angry boss telling them what to do and when to work. Setting up your own business is one of life's ultimate learning experiences. Surviving in today's competitive market is not easy and you have to believe in yourself before you start. Once you have decided the niche or industry that you are going to operate in, your next step should be to know your competitors, their weaknesses and their pricing and marketing strategies. It is also important to remember that keeping an eye on competition is not a one-time project that you complete and archive the information for later reference. It is an on-going assignment that needs to be done all the time. Keeping your eyes and ears on the market ensures that you understand the direction in which your potential customers are moving and the response that your competitors are making to the changing external environment. You will need to modify your strategy as you move along to further the prospects of your business. Another thing that you should be ready to do is to put on hold or reschedule your personal and social arrangements. The amount of time that you will need to nurture your new baby is likely to leave you with no time for social visits, at least for some time. A good way to handle this is to plan your celebrations on the basis of thresholds that you achieve in your business. An extremely important aspect of starting a new venture is finding the most appropriate bank. This bank should be willing to handle your business affairs. Look for one that provides personalized service and is transparent about finance charges and rates for borrowing money in case of need. If you are looking for funding, you may actually have to prepare a formal proposal before your credit limits are approved. Personal finance is perhaps the most important aspect of setting up a new venture. This is because very strong business ideas also need money and time to grow into profitable ventures. You also need to be prepared for hard times in the beginning if you are investing on your own. The fact is that you need to come to terms with the fact that you are not likely to come home with a regular paycheck each month. The first few months can get pretty tight to start with even if you have adequate funds to fund your business. It is not advisable to try to do everything by yourself. As a good entrepreneur you should be able to understand and evaluate your strengths and weaknesses. If finance is your strength and marketing is not, then it is better to hire professionals who can help you do the job more efficiently. Having said that, the kind of people that you need for a new venture to start are those that are creative and can come up with creative solutions that may not always be too expensive. The same goes for other functions like sourcing or purchasing raw material in the case of products and experts in the case of services offered. Think of a company name and structure. Small businesses are better run as sole proprietorships or partnerships (that is if you have someone who is ready to take the plunge with you) rather than a limited company. Before deciding, consider this that as sole proprietorships are simple, do not involve lot of paperwork and you are in control of your own accounting but at the same time you alone are responsible for sorting out financial troubles. In a limited company, your liability is limited to the amount of money you have invested and you draw money through a salary. If you opt for a partnership, remember the old adage that 'one who has a partner has a master.' Once all this is in place you have to look for other factors like business planning, taxes, registrations, insurance, employing staff and legal issues related to it. You may also consider getting a website to promote your business. The Internet provides endless opportunities and it is criminal to ignore them.

Dream Big - The Bigger the Better

Mon, 19 Nov 2007 13:37:00-0500

The commercial sector has no financial limits. Right from small investment-low return sets ups to large million dollar turnover industries; every venture finds a place for itself. The important point is to create a niche for oneself in the higher bracket than the lower one. Often great dreams are shelved away due to an anticipated lack of funds. And though it is true that money begets money it should not stop a dream from being conceptualized. You can have big dreams and large plans despite lack of funds. Dreams are the stepping stone of ideas and restricting dreams has an immediate adverse effect on ideas. Finances are often the main concern of a business. Money needs to be invested to start an industry, while at the same time money in the form of profits is the final destination of every commercial set up. So of course finances play a large role when one is planning to launch a new business. However it is wise to remember that it should not play a 'restrictive' role when it comes to planning and dreaming about the future of the venture. Big dreams inspire a person and it is conviction in these dreams that leads to higher achievements. Once the financial barrier of dreams has been broken it is easy to conceptualize and plan larger undertakings. Every large business venture starts out as a dream, so do not hesitate to have high aspirations. Instead of focusing on the lack of financial support, concentrate on the availability of other stronger resources. Though finances are important in a commercial set up, there are several other factors which work towards realization of the business dream. Most biggies of the industry started out with very little or no financial support. All they had in the bag was the ability to dream big and work towards a conversion of that dream. The famous Bill Gates was just a college drop out doing odd jobs for a living. The large Indian Ambani industry was set up by a man who came from a small village and led a hand to mouth existence. In fact Laxmi Mittal worked in a low paying 9 to 5 job for the initial years of his adult life. As is clear all these men did not raise these flourishing multi-million dollar projects on pure financial support. Therefore do not hesitate to dream big even if the funds are small. Learn to convert the drawbacks into advantages. Lack of funds prevents the comfort and safety of luxuries from making life easy. This unease causes one to work harder and smarter towards a better life. Collect the various feasible commercial options available and execute the one most likely to succeed. Always remember that calculations on paper show larger profits than the actual conversion of these calculations. Therefore small dreams might give negligible profits. Dream large since when you aim for the stars, you might not get them, but you will not come up with a handful of dust either.

When the going gets tough

Thu, 15 Nov 2007 14:46:00-0500

It is when the profitability levels of a commercial venture dips that one is most likely to abandon it. However it is at this time that the resolve to see the business through is most important. Remember the rats are the first to abandon a sinking ship and jumping into the ocean is not much to look forward to in any case. Of course shutting the business may seem to be the easy way out when problems occur, but there are several benefits of sticking in there and seeing the problem through. To begin with one of the most important reasons to not abandon a ship in a storm is the experience gained. Every venture has its set of problems. Closing down the business when these problems arise will prevent the businessperson from gaining important experience. Solving these problems and learning to overcome them with ease ads to ones knowledge. This experience is highly valued in the commercial sector. Experience is very dear in every field and those who have invested time in a particular industry are likely to excel in it. Secondly, those who do not give up when the situation gets difficult emerge stronger. They also have a better organized business on their hands. Problems occur due to mismanagement and in solving these problems one is able to rearrange the management process of the business for better suitability and higher growth. Once the hard times are over, the chance of ending up with a better organized and process-oriented business are very high. It is thus advisable to remember the light at the end of the tunnel and continue to move ahead instead of withdrawing. Next, sticking with the business plan is imperative if one has to progress. Both novel and established ventures are likely to see hard times. Simply running away from the problem will not solve much. Since each and every business has its own set of issues, problems and difficulties, it is best to continue the work with conviction rather than starting a new one all over again. Progress is only possible when blocks are placed upon blocks. Shutting the building process and starting a new venture each time will result in several useless blocks but no high building. Remember Rome wasn't built in a day. Therefore when faced with hard times keep the faith and confidence. Assess the problem(s) and comprehend it completely. Accumulate both the short term and long terms solutions and then choose the ones that are most likely to work best. Even in desperate times keep a positive attitude and keep fighting against all odds and success is likely to come by. On the other hand closing the venture will defiantly lead to zero profits in any case. The moral of the story is no pain no gain so when the going gets tough, get going.

Success and Positivism go hand in hand

Wed, 14 Nov 2007 13:43:00-0500

Whether you are starting a new business venture or taking an existing one forward, the one crucial sentiment that is essential is positivism. Positivism is defined as a quality or state characterized by certainty, acceptance or affirmation and a dogmatic assertiveness. Without this belief it is impossible to take the risks that are an integral part of every commercial venture. Success depends largely on taking the risks with a positive frame of mind so that you can have the motivation to see it through and give it your best. The success of a commercial venture is essential is, in most cases, defined by the ability of the venture to generate finances in the short, medium or long run. However commercial success is not easy to come by. Several plans have to be conceptualized, finalized and executed before one can hope for conversions. The idea is to believe in these plans and be positive that they are worth taking the risk. Further still, keeping a positive outlook while you wait for the return to start pouring in is far more beneficial than antagonizing yourself with negativity. We shall go on to see how a positive attitude goes a long way in the commercial world. ? Confidence ? A positive attitude is the stepping stone towards high levels of confidence. Positive people believe that good will come out of the project at hand. This belief raises the confidence level of the person and attracts positive reactions from others interacting with such a person. The spill over of a confident person's personality into the commercial arena attracts clients and efficient co-workers. ? Conversion ? A positive and confident businessperson is confident about the basic feasibility of his concept idea. When the seller is confident about the success of his product, it inspires faith in the client too. This inspired faith tempts the client to buy the product, thus helping increase the rate of conversion. ? Courage ? Every business faces its ups and downs. Those who loose hope and fall into negativity traps usually end up with a closed venture on their hands. On the contrary keeping the faith and a positive attitude helps overcome the problems and provides courage. This courage helps make the business stronger. A stronger business is able to increase its profitability level rapidly. Therefore giving up during the dip season and loosing faith in the project is like digging your own grave. On the other hand, keeping a positive attitude and trying to find solutions that work well help in recovering the losses faster. ? Congenial ? Everyone prefers to work in a congenial set up as opposed to one where negativity is prevalent. Creativity and productivity are known to rise under congenial circumstances. Positivism ensures a congenial work environment. A congenial work environment ensures added productivity. Added productivity ensures success and added profits. As is clear having a positive attitude and a positive work environment is essential for the success of a business venture. Though the rule applies in the personal sphere too, it is absolutely essential in the commercial sector. Positivism forms the foundation of success in any working condition.

Having the right strategy in business

Sun, 11 Nov 2007 13:52:00-0500

The strategy of any venture is of utmost importance. A strategy is the systematic and elaborate plan that is followed by the business venture in order to achieve its goals. Without a sound business strategy it is impossible for any venture to progress. Having the right strategy in the business world is crucial if financial gains are to be achieved. A business without a strategy is like a boat drifting in the sea and therefore unlikely to ever reach the shore. Having established the need for the right strategy in business, the next step would be to decide the main points to be kept in mind while establishing such a strategy. An understanding of the aspects to be kept in mind while building the strategy for the business will help realize a potentially viable strategy. A potentially viable strategy if executed properly will result in the conversion of the speculated profits, which is the goal of any business venture. To begin with accumulate relevant data. Find out the various aspects that affect the business and collect the related data of these fields. Depending on the size of the business venture data accumulation companies may be hired or the process can be carried out single handedly. Once the data has been accumulated the next step would be to assimilate all the available information into comprehensive sheets. Prospective cliental feedback, financial information, marketing ideas, production procedures, etc need to be laid down on paper so as to be able to squeeze their essence. The assimilation of such data provides the right building ground for the strategy that maybe adopted for a successful business venture. Based on the facts that are clarified by the assimilation of the data collected, conclusions have to be reached. Decide on the strategy that is to be adopted for success in the various departments of the venture as well as the business collectively. These conclusions can make or break a business and therefore must be taken with great care. Common sense is of course very important since many novel business ideas seem common in hind sight. Take care to keep emotional aspects in mind too. Many businesses have failed since they did not provide for the human emotion while building their strategy. The conclusion reached must be simple and factual not to mention workable. The strategy that is to be followed must have repeatability since no business is a one time mission. Take care that the strengths of the business venture are accentuated while the weakness are under undermined. Finally after completing the initial study and building a desired strategy on paper the obvious next step is to execute this strategy. Execution of the developed strategy is of great essence. If the strategy built on paper is executed with equality then the chances of profitability rise immensely. On the other hand if the execution of the strategy is weak, the profits will plunge no matter how sound the strategy is on paper. Therefore is it important to give equal importance to both strategy development as well as strategy execution in order to prosper in the commercial sector.

Problem solving approaches

Sun, 11 Nov 2007 13:38:00-0500

There is no business venture which does not have its fair share of problems. A successful business is one where the problems faced by the venture are dealt with in an appropriate and profitable manner. When these problems are not given their due attention promptly they tend to snowball and may even cause the doom of the business. It is no wonder then that problem solving techniques form the backbone of almost all business studies. Comprehending these problems solving techniques and executing them at the required time will help make the business profitable and successful. An analysis of the problem solving approaches follows-

? Identify ? Much like a disease, a problem can also be cured only once its cause is identified. When faced with a problem, begin with locating its roots. Figure out whether the problem is a financial one, related to HR or any other compartment of the business.

? Segregate - Once the problem area has been identified set it aside from the other well functioning sections of the venture. Mixing with departments that are running smoothly will only cause confusion and make the solution difficult to execute.

?Understand ? Comprehend why the problem arose, what are the various areas of the business that it will affect and other relevant properties of the problem at hand.

? Break down ? Break the problem into smaller manageable portions so as to be able to delegate both time and man power according to the demand of the problem.

? SWOT ? Assess the strength, weakness, opportunity and threat of the business venture so as to be able to find the most suitable solution for the problem.

? Viability ? The solution that is eventually selected to harness the problem must be a financially and practically viable one. Choosing a solution that cannot be followed through or causes financial loss to the business will be adding to the problems rather than decreasing them.

?Risk ? Contemplate and evaluate the risk factor that is involved in the solution. The risk factor must be in proportion to the problem at hand. Taking unnecessary large risks to solve problems that are smaller in proportion may lead to a bigger problem than the one initially on hand.

?Larger picture ? Always keep the larger goal of the business in mind when solving a problem. If the solution adversely affects the ultimate goal of the business then it will be futile to adopt it.

?Execution ? Once the most feasible solution has been decided it is imperative to immediately execute it. Talk does not cook rice, so it is the final execution of the solution that will solve the problem at hand.

?Follow up - After the execution of the solution there must be proper follow up to assess if the chosen solution is helping in resolving the problem. If the solution is doing its job it can be allowed to continue and if not then the chosen solution shall be abandoned and another answer needs to be figured out. Approach the problem at hand with a clear and calm mind. Adopt the above discussed steps to emerge the winner in the battle with the problem.

Managing team conflicts

Thu, 08 Nov 2007 11:55:00-0500

For any business venture to prosper financially a sound and collaborative team is necessary. Constant conflicts delay decision making which in turn affects the prosperity of the business adversely. Business ventures much like machines need to have all parts thoroughly oiled to prevent friction if the best results are to be derived. The need for managing team conflicts is usually seen as a human resource agenda rather than a financial one. However, this is not always true. Managing team conflicts ensures increase of positive inputs, which immediately translates to a convertible financial gain. This is the reason why managers all over the globe undertake periodic team management trainings. An analysis of the various business gains that may be achieved by avoiding team conflicts will clarify the need for maintaining a frictionless working environment- ?Financial gain ? Team conflicts absorb financial resources, which add to the cost of production. Ensuring that the business team works in co-ordination with each other helps prevent this addition to the cost of production. With a lower cost of production the chances of reaping a larger profit margin automatically escalates. ?Time gain ? Apart from financial costs the organization looses precious time in resolving disputes amongst its team members. While HR managers and team members sit down to solve the issue at hand, the productive work which they were hired for is shelved. This results in gross waste of time which could have been utilized in adding to the productivity of the venture rather than taking away from it. Avoiding team conflicts ensures that the employee time is used productively. ?Turnover gain ? When team conflicts are prevented and managed efficiently it immediately translates into lower turnover for the company. Loosing trained staff is not a convenient option for the business and should be avoided at all costs. In fact 30% of average annual salary is wasted by businesses in hiring and training a replacement employee. Preventing this loss does well for a business which stands to gain financially by it. ?Production gain ? When the finances of the venture and the hired time of the employee are put to productive use only, it effects the production of the company positively. The product is bought into the market as a faster pace and thus prospective profits rise. Since no time and money is wasted on regressive procedures the business does not loose out on precious resources thus benefiting the venture tremendously. ?Mental gain ? With effective team conflict measures managers can ensure a pleasant and co ?operative work environment. Such a scenario helps the employees to give complete attention to the job at hand instead of the negativism of the conflict constantly pressing on their mind. An employee who is mentally relaxed is able to give much more to the business than one who is unable to focus due to conflicts and anger. Thus, one may conclude that managing team conflicts is highly beneficial for the financial prosperity of a business venture. The lower the rate of team conflicts the higher the chances of profits.

Master the art of profit making

Mon, 05 Nov 2007 14:40:00-0500

Profit making is the one common goal of almost every commercial venture. Even NGO's target profit making so as to be able to further their cause with the extra financial aid earned through these profits. In fact, the difference between a successful business venture and a failed one lies mainly in the profit making ability of the former. Given that profit is the one major target which everyone in the commercial world aims at, the next step is to evaluate the various methods of making such financial gains and execute them for best results. ?Commission basis sales personnel ? Instead of regular salaries, hire sales staff on a commission basis. Commissions act as incentives, which help spur the employees on to perform. Regular salaries on the other hand allow the employee to slacken the pace of work without effecting personal income. Extra performance by the sales force translates into higher sales, which of course has an immediate positive effect on the profits. ?Regular and accurate financial statements ? Never ignore drawing up the accounts. The balance sheet and the profit and loss account are a perfect way to study the financial position of the business and understand the areas, which need attention. Identifying the problem areas before they snowball into an unmanageable crisis and taking action to prevent the situation will facilitate in the profit making process. ?Calculate cost precisely ? Whether it is cost of production, marketing, overheads etc it is imperative to calculate all of these and then decide on an appropriate sales price for the commodity in question. A sales price that does not allow room for profits needs to be reworked in order to assure a profit margin. This can only be done once the cost has been calculated accurately. ?Disembarrass non-profitable items ? Undertake a study of the profitability margins of the sales product/s. rid the system of the items that are not profitable, not only do they hinder profitability but also absorb energy which could be used for other more profitable items. ?Employ qualified personnel ? Do not hire staff that will be unable to contribute to the profitability process. When hiring candidates ensure that they are qualified for the job and will be able to add to the business activity positively. Do not hire relatives and friends unless they are completely suitable to the job profile. ?Do not mix business and pleasure ? When at work focus only on work and set time aside for pleasure later. Mixing the two usually affects the business adversely. The concept that business deals are clinched during parties and golf games is a myth. A shrewd and successful businessperson will want to check all aspects of the work before launching into it and therefore will never execute an important deal based on social circumstances. A dedicated entrepreneur will always be preferred over one who is given to merry making. ?No payroll services ? Both annual and item transaction fee has to be paid to the payroll services by companies that use them. These takes money out of the business and so avoid using payroll services completely. Instead, adopt a pay roll friendly soft ware, which will facilitate in undertaking the job in-house itself. Following some of these rules and practices can ensure that your business turns into a profit making machine.