Business Management
Business Management characterizes the process of leading and directing all or part of an organization, often a business, through the deployment and manipulation of resources (human, financial, material, intellectual or intangible). Early twentieth-century business management writer Mary Parker Follett defined management as “the art of getting things done through other people.”
One can also think of business management functionally as the action of measuring a quantity on a regular basis and of adjusting some initial plan, and as the actions taken to reach one’s intended goal. This applies even in situations where planning does not take place. From this perspective, there are several major management functions, namely: planning, organizing, leading, coordinating and controlling.
Management is known by some as “business administration”, although this then excludes management in places outside business, e.g. charities and the public sector. University departments that teach management are nonetheless usually called “business schools”. The term “management” may also be used as a collective word, describe the managers of an organization, for example of a corporation.
Today, we find it increasingly difficult to subdivide management into functional categories in this way. More and more processes simultaneously involve several categories. Instead, we tend to think in terms of the various processes, tasks, and objects subject to management.
One consequence is that workplace democracy has become both more common, and more advocated, in some places distributing all management functions among the workers, each of whom takes on a portion of the work. However, these models predate any current political issue, and may be more natural than command hierarchy.
All management is to some degree democratic in that there must be majority support of workers for the management in the long term, or they leave to find other work, or go on strike. Hence management is becoming less based on the conceptualization of classical military command-and-control, and more about facilitation and support of collaborative activity, utilizing principles such as those of human interaction management to deal with the complexities of human interaction.
The Business Plan: Why, Who, What?
The importance of planning should never be overlooked. For a business to be successful and profitable the owners and managers must have a clear understanding of its customers, its strengths, its competition, and must have the foresight to plan for future expansion. Whether yours is a new business or an existing business expanding, taking the time to create an extensive business plan provides you with greater insight into your business.
An effective business plan requires you to be objective, critical and focused. The finished project is an operating tool to help manage your business and enable you to achieve greater success. The plan also serves as an effective communication tool for financing proposals.
The are four major reasons for constructing a business plan are:
o The process of putting a business plan together is important; it forces the individual constructing the report to look at the business in an objective, critical and unbiased manner.
o It helps to focus ideas and serves as a feasibility study of the business’s chances for success and growth.
o The finished report serves as an operational tool to define the company’s present status and future possibilities. It can help you manage the business and prepare you for success.
o It is a strong communication tool. It defines your purpose, competition, your management and personnel. The process of constructing the plan can be a strong reality check.
Planning is very important if a business is to survive. An objective look at a business can help identify areas of weakness and strength. You may recognize needs that have been overlooked, spot problems before they escalate, and establish the path that leads to your business goals.
The plan is only useful if you use it. Ninety percent of new businesses fail in the first two years. Failure is often attributed to a lack of planning. To enhance your success, develop and follow a comprehensive, well-constructed business plan.
Finally, your business plan provides the information needed to communicate with others. This is especially true if you are seeking financing. A thorough business plan should have the information to serve as a financial proposal and should be accepted by most lenders.
Who should write the plan?
You, the owner of the business, should write the plan, whether you are using the business plan to seek financial resources or evaluate future growth, to define a mission or give guidance for running the business. You know the most about the business; and you have the most to gain from a well-constructed and insightful plan.
Some use software to assist in the formatting process. Consultants can be hired to assist in formulating the plan, but you must always do a majority of the work. Only you can come up with the financial data, the purpose of your business, the key employees, and management styles to mention a few items. So tackle the plan yourself; if you need further help in one area, then seek the assistance of a consultant.
The Product or Service
It is important for the reader to thoroughly understand your product offering or the services you currently provide or plan on providing. However, it is important to explain this section in layman’s terms to avoid confusion. Do not overwhelm the reader with technical explanations or industry jargon that he will not be familiar with.
It is important to discuss the competitive advantage of your product or service. If entering a new market, explain why there is a need for your offering. If appropriate discuss any patents, copyrights and trademarks the company currently owns or has recently applied for and discuss any confidential and non-disclosure protection the company has secured.
Discuss any barriers that you face in bringing the product to market such as FDA approval, EPA or government regulations, etc. Other areas that should be covered in this section include:
o Is your product or service already on the market or is it still in research and development?
o If in development, what is the rollout strategy or timeline to bring the product to market?
o What makes your product or service unique? What competitive advantage does the product or service have over its competition?
o Can you price the product or service competitively and still maintain a healthy profit margin?
What’s the Difference Between a Business Plan and a Marketing Action Plan?
Back during my short span as a business loan broker, reading financial statements and business plans was a daily affair. But for most business owners, a question that constantly came up was, what’s the difference between a business plan and a marketing action plan?
If you’ve wondered the same thing here’s a short answer…
Besides actual content, the primary difference that sets the two documents apart is the purpose of the document.
A business plan is what you create when you want to wow investors and bankers to give you money. A marketing action plan is what you create when you want to wow customers and clients into giving you money.
A good marketing action plan contains specific day-by-day marketing activities. This eliminates the guesswork of what to do today to bring in more clients, sell more to existing clients, and reactivate clients that may have drifted away.
The best marketing action plans contain everything needed to implement the plan. Perhaps there are ready-made ads, sales letters, email campaigns, and so on. All you do is deliver the components to your ad agent, web designer, or fulfillment company or staff. Everything is done for you and already in place to roll out. You just need to get the ball rolling by putting the pieces in play.
If you are looking to create a marketing action plan to increase sales and referrals, the 12 step business growth plan is a free white paper that outlines the steps in detail. The plan shows how any established company can make the maximum money in the shortest time possible.
A business plan lacks this level of day-by-day marketing detail. Instead, common components of a business plan are:
* Executive Summary
* Market Analysis
* Company Description
* Organization & Management
* Marketing & Sales Management
* Service or Product Line
* Funding Request
* Financials
* Appendix
A company might also use a business plan to map out company goals and mission statements for internal use. Aside from these uses, a business plan is pretty much useless. The majority are fluff. And they fail to be action-oriented from a marketing perspective.
If you are seeking to get investors or creditors to give you money, visit the SBA’s site at http://www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/index.html
There are tons of sample business plans just sitting and waiting for you to emulate over there.
But don’t expect to use the SBA’s business plan templates to attract new sales or clients. You’ll need a strategic marketing action plan for that.