Do Business Well

13. Eliminate unnecessary partitions

Factories and offices, particularly old ones, often have too many nooks and crannies, cubby holes and partitions. The more of these there are, the less visibility there is of personnel, stocks, machinery and production in general. Partitions and walls take up too much space.

14. Re-allocate space per department/function to save money

Work carried out by separate departments could be merged following physical re-allocation of work areas. For example, a combined despatch/goods inwards department could be less costly.

15. Dispose of obsolete items

Storing obsolete items in the stores and on the shop floor takes up costly factory and warehouse area. Continue Reading »

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1. Control the size of the establishment

Large-scale production brings certain economies with it especially in times of stability or growth, but in periods of retraction large-scale facilities can be too costly. Ensure that establishment costs are affordable for both high and low levels of activity.

2. Assess the minimum/optimum establishment size for your present activity level

Firms often work with facilities which have grown over the years as demand has developed. But are they what you really need now and for the future? Assess your ideal facilities objectively and compare them with what you have at present; you will at least have a picture of the changes you might make. Continue Reading »

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9. Strategic divisionalising of the policy

Your pricing policies are first and foremost intended to result in a profit for your company. There are several instances where an adjustment in price can achieve a particular objective, such as:

• the maintenance of present activity levels;
• to dispose of slow moving stock;
• to introduce a new product to the market;
• to deter the competition;
• to increase the sales of other products by the use of loss leaders.

You should always proceed with utmost caution and remember that the main objective is to achieve a profit for each and every item you sell. Continue Reading »

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Companies can increase profit either by cost reduction or by margin improvements. Margin improvement or improvement in the gross profit can be achieved either by increasing unit selling prices or by increasing sales volume (this includes the possibility of reducing unit selling prices in order to be more competitive and increase sales volume).

Selling prices are affected by supply, demand and cost conditions. All companies need to ensure that their pricing policy gives the best opportunity for maximising sales and profits.

1. Keep pace with inflation

The inflation rate is the percentage rate per period that prices are increasing and should provide a guideline to the level of price increases generally. Continue Reading »

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You will usually need a business license. This is a requirement of the city or county where the enterprise will be located. You will almost certainly need this license if you plan to operate out of a commercial facility such as a storefront, office building, or warehouse. You may not need a business license if you have a home-based business that provides professional services, such as a manufacturers’ representative or business consultant, or if you are part of a multilevel organization.

When you begin to research your location, you’ll see the major disparity in business climate from city to city or county to county. Some are very eager to have businesses of your type locate in their area. You may be bringing jobs for their citizens and additional tax revenues for their coffers. In these cities you may find that getting a license is a ten-minute exercise in filling out a form and paying a small (under one hundred dollars) fee. Continue Reading »

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Many companies find that after their first few years they hit a sales plateau. Up to a certain volume, business comes easy. Then there comes a time when it seems as if the next sales dollar is very elusive. Ironically, the sales ceiling usually hits just at the point where profits start.

A variation of this dilemma is the seasonal sales phenomenon. I know of one motorcycle parts distributor who made huge profits eight months out of the year, only to lose almost all of it in the winter months. Continue Reading »

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Set the Example

Your attitudes, priorities (or lack thereof), and business practices will have a way of trickling down. You shouldn’t be surprised to learn that the negative ones will trickle down in torrents, while the positive ones will try to defy gravity.

If. you feel that managers should not be clock watchers, then you can’t work nine to four-thirty with a two-hour lunch and every other Wednesday off. If you’re the first to arrive and the last to leave, it becomes embarrassing for a top manager to see your car in the lot when he comes and when he goes.

Do you want others to turn in reports on time? You’ll need to do likewise. Do you want your people to answer the phone professionally and cheerfully? Make certain you do. Is quality or service important? Can those in your organization tell that by seeing your reactions to quality or service issues? Ask yourself these questions on an ongoing basis. Continue Reading »

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Both buying low and selling high are possible because owners know less about the value of their business than any other item in their portfolio. The market price of a house is usually known within a range of 5 percent or so. Check the current listings and the recent sales, and you can get a good idea of how much your home is worth.

If you own stocks, bonds, rare coins, or a car, there are exchanges, experts, or blue books that will give you an accurate picture of their worth. Even less liquid items such as art, collectibles, or raw desert land are rarely sold very far below some established market price. Continue Reading »

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5. Building a solid foundation: infrastructure required to manage your business

Just as you need a solid foundation for a building, so you need theright infrastructure for your business. This needs to be addressed ahead of time. Seriously, many businesses fail because they become too successful. Their infrastructure can’t cope with their growth and so their business literally falls apart. Don’t make that mistake. Clearly define what infrastructure will be required to run your business, both in the short and long-term. Let’s look at the different components of your business infrastructure:

• Premises: What is the physical capacity your business will require? What will be the optimal location for you in terms of closeness to your customers, major roads and the location of the competition.

Continue Reading »

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Where have all the customers gone? If the bad news is that your competitors have got them, the good news is that you can win them back or attract new ones.

As we have emphasized, the starkest challenge facing business today is customer scarcity: too many sellers for too few buyers.

In our democratized marketplace, practically anyone can participate in the competitive fray, and to harried managers it sometimes seems that practically everyone has. The result is that despite the fact that customers are more plentiful and richer than ever, each of them is being pursued by more suppliers than ever before. In addition to their traditional rivals, managers face new competitors that have transcended industry boundaries or erupted from the Internet with a new concept that threatens whole lines of existing products. And with the rise in the number and quality of suppliers, it’s no longer production that is the bottleneck to growth. It’s consumption. Continue Reading »

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