Archive for the ‘Business Goals’ Category
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No business firm is completely static, like a building or a machine with stationery framework and standard parts that may be replaced from the ready stock or got from outside. Instead shift in demand, in competition, and in other external forces call to continuous adaption, and the ambition and drives of executives within the company keep it evolving. And as changes are made in one part of the company, compensating adjustments are needed in other parts. Consequently, each company should be thought of as a dynamic, integrated entity. Each of these business entities develops character and an individual personality of its own. This personality is shaped, not only by physical resources and technology, or financial inputs but also by some basic objectives which may be set for it by the top management. Objectives are the ends towards which enterprise activities are aimed the end points of planning.
Policies are common proclamation of ideologies for the accomplishment of objectives which provide as a guide to action for the administrators at different levels. In other words, they are a wide path along which the subsidiaries move towards their goals. Policies have a chain of command, i.e., for each group of goals at every level of administration, there is an equivalent set of policies. For instance, fundamental overall business policies strong-minded by the vital management the corporate administrative polices single-minded by the top management, departmental and divisional polices strong-minded by their executives and sectional policies determined by the middle executives, etc. right up to the first line managers.
The policies delimit the area within which a decision is to be made and ensure that the decision will be consistent with and contribute to the objectives. However, they do allow some discretion on the part of the man on the firing line, otherwise, they would be mere rules. Too much discretion in matters on policy may prove harmful to the accomplishment of organizational objectives. Hence it is generally within limits. The amount of discretion allowed depends upon then policy, which in turn reflects the position and authority in the organization. In most policies, the discretion area is very broad, but in others, it is extremely narrow.
Policy making is one of the essential things of business planning. They provide perfect guidelines to take important decisions in business. It also business people to achieve business objectives. While objectives are a goal or an end to be sought, policies are a general rule of action or guideline which helps in attaining the goal. The objectives set a long-range target; a policy provides guides which assists the company in achieving this target.
Policy does not tell a person exactly what to do but it does point out the direction in which to go. Familiar policies are summed up in these statements. “We sell only for cash and allow liberal discount there on. “Our motto is to serve the customers in all possible ways in matters of quality, price, weight and contents”. In each instance, some important aspect of a recurring problem has been singled out, and a guide established for dealing with it.
High standard of living, which means an abundance of goods and services available for consumption by the people and a substantial amount of leisure which such abundance make possible. This goal requires the achievement of high productivity. Increase in productivity and efficiency, which goals indicates that good businessman are aware of the fact that they have an overriding obligation to be a productive and creative force in society and that they must build, expand and put forth goods and services in abundance. To achieve these expansions they undertake research and development programs, invest profits in the purchases of new tools and equipments adopt aggressive sales promotion schemes provide extra incentive and motivation to workers, and lower prices by the use of modern production techniques. Economic progress, which can be achieved by making an optimum utilization of the material and non-material resources of capital by developing inventiveness, administrative skills, craftsmanship, education and training of workers and conserving energy of the employees so that the natural resources are properly utilized. Economic stability which is and can be achieved by framing and adopting economic and fiscal policies, making accurate sales forecasts, preparing production schedules, diversifying products, and stimulating sales in off-season so that frequent fluctuations in economic activity, prices and cost of living are restricted.
Your own role is pivotal to the success of your business, and anyone who is asked to back your business is essentially being asked to back you and any team that surrounds you. Your business plan will, consciously or subconsciously, reveal to readers the aspects of you that will make the business succeed or not. No one is perfect, but consistently successful entrepreneur would be able to tick ‘yes’ to most of the statement below. The important word there is most
. I am determined to make my business succeed
. I control my own destiny
. I am not easily discouraged
. I observe and learn from others
. I always get something out of situations that go wrong.
. I want recognition for my achievements
. I am not motivated by money alone.
. I will sacrifice work-life balance to work long hours when needed
. I am able to take calculated risks.
. I can switch off and refresh my batteries when needed.
. I see the big picture but also focus on fine details
. I am good at ideas but I also finish things once I have started them.
The most effective predator in the tropical rainforest is not the tiger, no matter how powerful any single individual animal is. The really effective predatory species is the army ants that sweep across the forest floor in broad columns, consuming everything edible in their path. Each individual insect effectively comprising a tiny part of a huge and hugely voracious predator. The cascades of decisions needed to run any business are similar to armies of ants, small individually, but each contributing to a massive collective effect. Looking in from the outside, successful established businesses may most resemble individual large predators, but things are rarely as they appear. The underlying reality will be much closer to that of columns of ants with many separate operating units, combining together, united in a determined pursuit of a shared plan, and operating within the context of known business objectives. Continuing with an animal theme, there is an old joke about tow hikers who round a bend on the trail to encounter 50 yards ahead of them a grizzly bear.
As the first heaves off her rucksack and pulls on running shoes the second observes that she will never be fast enough to outrun the bear. But I don’t have to outrun the bear my dear friend’ replies the first, I only have to outrun you. That story is an appropriate metaphor for the process of working towards business success. A never-ending stream of business decisions, better decisions pilled upon earlier good ones, all made in order to keep you ahead of your rivals. The process of business planning allows you to keep stacking the odds in your favor so that you make many more right decisions than wrong ones, enabling you to make fewer mistakes than the competition. By being more alert than your rivals to what is happening, more open, more receptive, more willing to embrace change, you can ensure that whatever threats are out there on the business trail, you are more fleet of foot than they are.
You believe in your business, you need to be positive, but you must to keep both the tone and content objective, essential if funding is required. Any claims that you make must be supported by evidence, and that evidence must be able to stand up to unbiased scrutiny. Another potential benefit is that as you recruit someone to perform that role you can take the opportunity to rehearse elements of your elevator pitch. The pitch is your potent weapon in your business armory in many different situations. Benefits are arising from a team approach to business. The sounding board role should be distinct from that team, more objective; more of a business mentor finding a competent individual to act in that role can also become a long term investment for your business, since the right person can remain on tap as your business grows. To find the right person, you need to establish carefully whose views you trust, and why. Your own business technical background and your own personality type can help you to determine the type of person that you are looking for. If you have undertaken any of the psychometric tests outlined in my previous reviews, the results will be helpful to you now.
No one individual possesses all of the skills needed to set up and then grow a business, and you should remember the importance of having and drawing upon the skills of, the wider business team around you. Fortunately, that team will be larger than you at first imagine. In the final analysis, all business financial performance is driven by people, by their will and their expertise. No individual can possess all of the business skills needed, and the wider team brings an essential diversity to any business. That diversity is about the skills available, but also about personality traits and outlook on life. Your business plan needs to show that a balance of skills is in place. Just as you must seek to achieve constant improvements in your business, you can build your business experience and skills using methods that best suit your situation. Certainly, maximize your exposure to other business people, observe for yourself what works for them and what doesn’t and aim to understand why. Selling skills will come naturally when you believe that your business offering meets customer needs very well indeed. Get your business offering meets customer need very well indeed. Get your business plan right, particularly get your customer focus, and you will probably find that you become an able and persuasive sales person.
In real life, business ambition is normally quite modest. When you pause to think about it, it is doubtful that many of the founders of what are now global businesses started out with that level of ambition. Entry-level opportunities for new businesses always exist within smaller, localized markets, particularly in sectors that are quite fragmented. Examples include restaurants and hotels, alarm businesses and locksmiths, vehicle repairs businesses of various types, health salons, model shops, website designers, bookkeepers, minibus and taxi services, specialist building firms, and so on. In other words, in industries where there are many relatively small businesses competing with each other, gaps in the existing offerings available to customers can often be identified, occupied, and turned into successful businesses.
Those gaps may be geographical, but not always. Just doing things slightly differently to the competition is a key that can unlock so much, and the world being what it is, simply being better by doing what you say you will is often a very good start. New entrants can and do set up successfully in fragmented industries when they are determined to deliver greater benefits to customers than the existing players. In such situations new businesses are really founded on new business ideas, instead the focus will be that of reformulating existing business ideas slightly finding an angle that the existing players have overlooked or ignored. Being determined to exploit rivals’ complacency may seem arrogant, but successfully invading a fragmented local marketplace is often helped by a degree of inertia on the part of the competition. A fresh entrepreneurial spirit in a tired industry, welded to ability and determination, can carry a new business a very long way. Sometimes it takes a very long time even for the existing players to wake up and begin to notice what is happening.