The Business Environment
The Business Environment
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The worst time to start a new small business is during an economic depression when consumer incomes, and hence the general demand for products, are falling. Yet these are precisely the conditions that typically prevail when governments most vigorously encourage the establishment of new firms. Perhaps you started your enterprise during a tax regime that suddenly altered, or depended on government or local authority support that unexpectedly collapsed,[/column][/row] [row][column size=”1/2″]
or arrived at work one morning to find double yellow lines on the streets where previously your customers parked their vehicles. As a small business you are unlikely to experience strikes within your own organisation, but you could be affected by strikes (or other mishaps) among your suppliers, distributors or large industrial customers.[/column] [column size=”1/2″] [/column][/row]
Tips For Business. General Tips.
To be good at small business management you have to be able to diagnose accurately the basic causes of business problems, and relate such causes to their operational effects. You should set up an ideal model of how the business would function in the best possible situation and then compare this with your firm’s actual performance, analysing differences as you go along.[row][column size=”1/2″]
You may need to experiment and undertake considerable amounts of research prior to deciding on the measures necessary to improve profitability, but once you have chosen your actions you must stick to your plan, implementing tough new policies to overcome your difficulties. Beware of dirty tricks by competitors and continuously monitor their activities. List and describe current operational problems under headings for those created by outside influences, and those subject to your personal and immediate control. And be totally honest in your analysis.[/column] [column size=”1/2″] [/column][/row]
Planning is essential for successful small business management, particularly regarding the timing of receipts and payments. You need a system for relating current levels of spending to some measure of the business’s overall performance. And you must carefully examine the break even and cash flow implications of various selling prices.
Prosperous firms are usually those which in the longer term avoid overreliance on just a handful of customers or suppliers. They regularly seek out fresh markets and new supply sources. The chapter concluded with a brief description of some of the many things that can go wrong in a small business, citing particular instances of bad management and their effects. Later chapters suggest solutions for many of these difficulties.