THE BASICS OF BUSINESS - By Brian Tracy - Entrepreneur.com
Business is an art as well as a science. It's a matter of practical experience, judgment, foresight and luck. To be successful in business, you must master the basics of business success.
Fortunately, all business skills are learnable. You can learn anything you need to learn, to achieve any goal you can set for yourself. There are no limits--except the limits you place on your own imagination.
There are three major reasons why businesses fail: lack of money, lack of knowledge and lack of support. By mastering the basics of business success, you'll gain the knowledge necessary to acquire the support and money you need for your business.
So just what are the essentials of business success? There are seven key areas of activity that determine whether your business will live or die:
1. Marketing. Your ability to determine and sell the right product to the right customer at the right time
2. Finance. Your ability to acquire the money you need, and account for the money you receive
3. Production. Your ability to produce products and services at a high enough level of quality and consistency over time
4. Distribution. Your ability to get your product or service to the market in a timely and economic fashion
5. Research and development. Your ability to continually innovate and produce new products, services, processes and responses to your competition
6. Regulation. Your ability to deal with the requirements of government legislation at all levels
7. Labor. Your ability to find the people you need, deal with unions, establish personnel policies, training and organizational development
And from this list, comes the very specific, identifiable reasons for business success:
Having a product or service that's well suited to the needs and requirements of the current market
Developing a complete business plan before commencing business operations
Conducting a complete market analysis before producing or offering the product or service
Thoroughly developing advertising, promotional and sales programs
Establishing tight financial controls, good budgeting practices, accurate bookkeeping and accounting methods, all backed by an attitude of frugality
Ensuring that there's a high degree of competence, capability and integrity on the part of key staff members
Having good internal efficiency, time management, clear job descriptions, accompanied by clear and measurable output and responsibilities
Developing effective communication among the staff and an open-door policy for managers, especially the business's owner
Generating strong momentum in the sales department and placing a continued emphasis on marketing your product or service
Making concern for the customer a top priority at all times
Putting determination, persistence and patience at the top of the list on the part of the business owners
And now that you know the seven essentials of business success and the identifiable factors involved in helping your company succeed, let me share the top reasons for business failure. Thousands of companies were studied to determine the reasons businesses fail. Here they are, in order of their importance:
Lack of direction. Business owners often fail to establish clear goals and create plans to achieve those goals, especially before starting out, when they fail to develop a complete business plan before launching their company.
Impatience. This occurs when business owners try to accomplish too much too soon, or expect to get results far faster than is truly possible. A good rule to remember is that everything costs twice as much and takes three times as long as expected.
Greed. When entrepreneurs try to charge too much to make a lot of money in a short period of time, failure isn't far behind.
Taking action without thinking it through first. An entrepreneur acts impetuously and makes costly mistakes that eventually cause the business to fail.
Poor cost control. An entrepreneur spends too much, especially in the early stages, and spends all their startup capital money before achieving profitability.
Poor product quality. This makes it difficult to sell and difficult to get repeat business.
Insufficient working capital. An entrepreneur expects--and requires--immediate, positive cash flow that doesn't occur, leading to the failure of the business.
Bad or nonexistent budgeting. An entrepreneur fails to develop written budgets for operations that include all possible expenses.
Inadequate financial records. An entrepreneur fails to set up a bookkeeping or accounting system from the beginning.
Loss of momentum in the sales department. This leads to a decline in cash flow and the eventual collapse of the enterprise.
Failure to anticipate market trends. An entrepreneur doesn't recognize changes in demand, customer preferences or the economic situation.
Lack of managerial ability or experience. An entrepreneur doesn't know or understand the important skills it takes to run a business.
Indecisiveness. An entrepreneur is unable to make key decisions in the face of difficulties, or decisions are delayed or improperly made because of concern for the opinions or feelings of other people.
Bad human relations. Personal problems and conflict with staff, suppliers, creditors and customers can easily lead to business failure.
Diffusion of effort. An entrepreneur tries to do too many things, thus failing to set priorities and focus on high-value tasks.
Business success isn't a mystery waiting to be solved. It's an attainable goal, if you simply avoid the reasons for business failure and continually focus on improving the areas that are responsible for business success.
Brian Tracy is the "Success Secrets" coach at Entrepreneur.com and is one of America's leading authorities on entrepreneurial development. He's produced more than 300 audio and video learning programs covering the entire spectrum of human and corporate performance.
Material copyright © by Entrepreneur.com, Inc. All rights reserved.
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The Star Global Malaysians Forum - Response from Almerica - Posted: 11 August 2006 at 1:36am
Great stuffs nik!
Allow me to add. The main problem in today's businesses is that many top corporate owners still find it tough to delegate and trust even their fully competent and qualified generals to make a call. This slows down decision making process and one major fact today is that business is very much based on the speed of making things happen.
My company had the privilege of being appointed as an ad-hoc project manager and coordinator, handling everything from protocol communications to organising a huge MNC's official opening of its plant in Pg with our CM being the honorary guest. (see the link below). We were given just about 3 weeks from the word go to make it happen and the rate of their approval for our proposals were simply superb.
http://www.thestar.com.my/news/story.asp?file=/2006/8/10/north/15077905&sec=North
They are currently the fastest growing semicon company (as listed in Forbes). Our CM, Tan Sri Koh and everybody present were astounded when the CEO of the corporation mentioned that it was his first trip to Pg! He reiterated that he based his actions on the advices of his team of leaders here in Malaysia & S'pore. He went ahead to invest 100million here upon their advice and only made his trip here to witness the official opening of the plant. And the greatest achievement is that they built the plant and started its operations (with over 200 staffs) all within 3 months making them a record breaker! You know what their tagline is? Moving Forward Faster.
And here we sometimes see big local companies that has so much red tape that even a decision to approve a Rm 1000 purchase is delayed due to the green light required by the MD. Hmmm, we have always teased at the "kiasu-ness" of the Singaporeans but I wonder if we ever look at our own "kiasi-ness", hehe.
---------------------------------
Nik Zafri's Response - Posted: 11 August 2006 at 1:36pm
Business is an art as well as a science. It's a matter of practical experience, judgment, foresight and luck. To be successful in business, you must master the basics of business success.
Fortunately, all business skills are learnable. You can learn anything you need to learn, to achieve any goal you can set for yourself. There are no limits--except the limits you place on your own imagination.
There are three major reasons why businesses fail: lack of money, lack of knowledge and lack of support. By mastering the basics of business success, you'll gain the knowledge necessary to acquire the support and money you need for your business.
So just what are the essentials of business success? There are seven key areas of activity that determine whether your business will live or die:
1. Marketing. Your ability to determine and sell the right product to the right customer at the right time
2. Finance. Your ability to acquire the money you need, and account for the money you receive
3. Production. Your ability to produce products and services at a high enough level of quality and consistency over time
4. Distribution. Your ability to get your product or service to the market in a timely and economic fashion
5. Research and development. Your ability to continually innovate and produce new products, services, processes and responses to your competition
6. Regulation. Your ability to deal with the requirements of government legislation at all levels
7. Labor. Your ability to find the people you need, deal with unions, establish personnel policies, training and organizational development
And from this list, comes the very specific, identifiable reasons for business success:
Having a product or service that's well suited to the needs and requirements of the current market
Developing a complete business plan before commencing business operations
Conducting a complete market analysis before producing or offering the product or service
Thoroughly developing advertising, promotional and sales programs
Establishing tight financial controls, good budgeting practices, accurate bookkeeping and accounting methods, all backed by an attitude of frugality
Ensuring that there's a high degree of competence, capability and integrity on the part of key staff members
Having good internal efficiency, time management, clear job descriptions, accompanied by clear and measurable output and responsibilities
Developing effective communication among the staff and an open-door policy for managers, especially the business's owner
Generating strong momentum in the sales department and placing a continued emphasis on marketing your product or service
Making concern for the customer a top priority at all times
Putting determination, persistence and patience at the top of the list on the part of the business owners
And now that you know the seven essentials of business success and the identifiable factors involved in helping your company succeed, let me share the top reasons for business failure. Thousands of companies were studied to determine the reasons businesses fail. Here they are, in order of their importance:
Lack of direction. Business owners often fail to establish clear goals and create plans to achieve those goals, especially before starting out, when they fail to develop a complete business plan before launching their company.
Impatience. This occurs when business owners try to accomplish too much too soon, or expect to get results far faster than is truly possible. A good rule to remember is that everything costs twice as much and takes three times as long as expected.
Greed. When entrepreneurs try to charge too much to make a lot of money in a short period of time, failure isn't far behind.
Taking action without thinking it through first. An entrepreneur acts impetuously and makes costly mistakes that eventually cause the business to fail.
Poor cost control. An entrepreneur spends too much, especially in the early stages, and spends all their startup capital money before achieving profitability.
Poor product quality. This makes it difficult to sell and difficult to get repeat business.
Insufficient working capital. An entrepreneur expects--and requires--immediate, positive cash flow that doesn't occur, leading to the failure of the business.
Bad or nonexistent budgeting. An entrepreneur fails to develop written budgets for operations that include all possible expenses.
Inadequate financial records. An entrepreneur fails to set up a bookkeeping or accounting system from the beginning.
Loss of momentum in the sales department. This leads to a decline in cash flow and the eventual collapse of the enterprise.
Failure to anticipate market trends. An entrepreneur doesn't recognize changes in demand, customer preferences or the economic situation.
Lack of managerial ability or experience. An entrepreneur doesn't know or understand the important skills it takes to run a business.
Indecisiveness. An entrepreneur is unable to make key decisions in the face of difficulties, or decisions are delayed or improperly made because of concern for the opinions or feelings of other people.
Bad human relations. Personal problems and conflict with staff, suppliers, creditors and customers can easily lead to business failure.
Diffusion of effort. An entrepreneur tries to do too many things, thus failing to set priorities and focus on high-value tasks.
Business success isn't a mystery waiting to be solved. It's an attainable goal, if you simply avoid the reasons for business failure and continually focus on improving the areas that are responsible for business success.
Brian Tracy is the "Success Secrets" coach at Entrepreneur.com and is one of America's leading authorities on entrepreneurial development. He's produced more than 300 audio and video learning programs covering the entire spectrum of human and corporate performance.
Material copyright © by Entrepreneur.com, Inc. All rights reserved.
------------------------------
The Star Global Malaysians Forum - Response from Almerica - Posted: 11 August 2006 at 1:36am
Great stuffs nik!
Allow me to add. The main problem in today's businesses is that many top corporate owners still find it tough to delegate and trust even their fully competent and qualified generals to make a call. This slows down decision making process and one major fact today is that business is very much based on the speed of making things happen.
My company had the privilege of being appointed as an ad-hoc project manager and coordinator, handling everything from protocol communications to organising a huge MNC's official opening of its plant in Pg with our CM being the honorary guest. (see the link below). We were given just about 3 weeks from the word go to make it happen and the rate of their approval for our proposals were simply superb.
http://www.thestar.com.my/news/story.asp?file=/2006/8/10/north/15077905&sec=North
They are currently the fastest growing semicon company (as listed in Forbes). Our CM, Tan Sri Koh and everybody present were astounded when the CEO of the corporation mentioned that it was his first trip to Pg! He reiterated that he based his actions on the advices of his team of leaders here in Malaysia & S'pore. He went ahead to invest 100million here upon their advice and only made his trip here to witness the official opening of the plant. And the greatest achievement is that they built the plant and started its operations (with over 200 staffs) all within 3 months making them a record breaker! You know what their tagline is? Moving Forward Faster.
And here we sometimes see big local companies that has so much red tape that even a decision to approve a Rm 1000 purchase is delayed due to the green light required by the MD. Hmmm, we have always teased at the "kiasu-ness" of the Singaporeans but I wonder if we ever look at our own "kiasi-ness", hehe.
---------------------------------
Nik Zafri's Response - Posted: 11 August 2006 at 1:36pm
| Almerica wrote: |
| Great stuffs nik! Allow me to add. The main problem in today's businesses is that many top corporate owners still find it tough to delegate and trust even their fully competent and qualified generals to make a call. This slows down decision making process and one major fact today is that business is very much based on the speed of making things happen. |
This is the part that I will never understand. Despite we have all the sophisticated and up-to-date or 'state of the art' tools and technologies, yet, we are sometimes; as if; still 'too conventional and simplistic' in managing an organization. Correct me if I'm wrong...has this got something to do with 'fear of change'? (among the senior management level?)
| Almerica wrote: |
| My company had the privilege of being appointed as an ad-hoc project manager and coordinator, handling everything from protocol communications to organising a huge MNC's official opening of its plant in Pg with our CM being the honorary guest. (see the link below). We were given just about 3 weeks from the word go to make it happen and the rate of their approval for our proposals were simply superb. http://www.thestar.com.my/news/story.asp?file=/2006/8/10/north/15077905&sec=North They are currently the fastest growing semicon company (as listed in Forbes). Our CM, Tan Sri Koh and everybody present were astounded when the CEO of the corporation mentioned that it was his first trip to Pg! He reiterated that he based his actions on the advices of his team of leaders here in Malaysia & S'pore. He went ahead to invest 100million here upon their advice and only made his trip here to witness the official opening of the plant. And the greatest achievement is that they built the plant and started its operations (with over 200 staffs) all within 3 months making them a record breaker! You know what their tagline is? Moving Forward Faster. |
I'm impressed!! Here's what I think...your company has what I call the 'one-game-plan'...not 'multiple game plan'...meaning - the majority (I wouldn't say all) of your company's population is genuinely working according to the Company's vision, mission, objectives and goals. The effectiveness of your company's operation could may be well attributed to the effectiveness of leadership, resource management, information dissemination, A & P and good human resources/traning/development. Of course, you may still find 'hiccups' here and it's all about continual improvement. Only - I'm not sure about one thing..if you're willing to share with us here....what's your company's branding and most importantly, how did your company make everyone understand that they are carrying a big responsibility of 'enhancing the corporate image'?
| Almerica wrote: |
| And here we sometimes see big local companies that has so much red tape that even a decision to approve a Rm 1000 purchase is delayed due to the green light required by the MD. Hmmm, we have always teased at the "kiasu-ness" of the Singaporeans but I wonder if we ever look at our own "kiasi-ness", hehe. |
Memory serves, here's something that we've discussed a long time ago...
http://www.globalmalaysians.com/forum/forum_posts.asp?TID=465&PN=2
(perhaps you should 'reactivate' this topic)
---------------------------------
Response from Almerica - Posted: 12 August 2006 at 12:22am
It's largely due to inculcating the self belief in themselves. Here's my method of doing it on a step by step basis, from a new staff's day of entry into our fold (though a very small one that is, at the moment):
- Have at least an hour or two "get to know better session" with the person
- Exchange some stories about one another and find out their likes and dislikes
- Lend support to the causes they believe in
- Find out into more detail what they believe their strengths are
- Brief them about what the company's strengths and weaknesses are, and also where the company is heading
- Explore with them (we do not dictate) on how their strengths can be used to tie in with the company's plans and then assign that part of the responsibility of the workscope to them
- Work out a gameplan with them based on what they believe they can do which runs in line with what you want them to do
- Tell them it's ok to make mistakes (to eradicate the fear of making a mistake which could prevent them from exposing their true potentials) as long as it's not about anything illegal or malicious or involves self greed.
- Start a buddy system for them for the next few weeks
- Keep them involved in group conversations (to eradicate shyness as well as to make them feel at home)
and the list goes on......
Those are the compulsory stuffs we do cos I feel that there is no way we can know all about each other from just interviews no matter how many times we have done it.
Once the self belief is there, without the lingering fear of making mistakes, the passion on the job grows within them. And with passion comes commitment and the sincere desire to do it well, do it right and do it fast. And the ultimate outcome would be getting the results that we all need. We tell them that rewards will come on its own when we do what we have to but when one focuses on the rewards, one may do the wrong thing to get it because the priority becomes clouded, and they may end up getting no reward at all because of that.
Above all, be fair, compliment when it is due, point out effectively when they are wrong. It is not that we are being soft with them. Respect them and they will respect you and the company. Be transparent, allow your door to be always opened to anyone.
If you dont spend some time for your people, they won't spend much time for you or your company either. So patience and sincerity has to be shown on the part of the leader first. Good staffs don't need you, you need good staffs. They are the best form of investment any company can ever have. For me, my first assessment which forms my decision of any potential person is the heart. If its clean, pure and good, then every other thing can be developed from there cos that to me, is the foundation of a person's character.
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