9 TOOLS FOR CREATING A SUCCESSFUL BUSINESS...Continues.

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 Why I call these 9 facts of creating a business- TOOLS ? 

Despite the fact that they are not tangible, they are the things you should use to carry your business. Web definition of a tool is: A device or implement, esp. one held in the hand, used to carry out a particular function.

In this post, we are going to complete discussion of the remaining 4 tools

Right Contingency plan

Sometimes we get carried away by our ‘beautiful business ideas’, great deals or ‘once a life time’ opportunity. We focus only the positive side and don’t consider what if things go wrong. It is better to have a backup plan say contingency budget to cover unforeseen expenses,  plan for human capital assistance in case you need more assistance, or another source of income when this ‘great business idea’ doesn’t work out as planned. Some people faced a lot of problems after borrowing money to start a ‘great’ business, which turned into ‘the worst’ business; they had to sell their personal belongings to repay the business loan.

Right Budget for everything

You should consider that you need to provide right goods or services, have the best process of delivering your product, and have sound marketing strategies for the product. To do all that you should remember you need the right people who must be fairly compensated. You know that for your business to have the best process of service delivery, and the best product you need appropriate technology that can do all that. That is why I say, right budget for each and everything from marketing budget, fair compensation to your staff, acquiring and maintaining right equipment and tools, to day to day running expenses such as security, cleaning, transportation and communication.

Right Profit and Loss Consideration  

Profit is your reward for putting your capital and all your efforts to turn the business idea into a business. However, profit is not just the total income of your business. From the Incomes you must deduct ALL expenditures you incurred to generate such income. Here is when the problem may arise. You may forget or ignore some expenses that were incurred during a particular period, resulting in wrong figure of profit for that particular period. Sometimes mistake can be made even before starting a business, when you want to decide whether you should start a business or not, you will list down possible incomes from that business, then list down expenses for a particular period. If calculations both estimations and actual are wrong, your decisions on state of your business will be wrong too. You may need service of a qualified accountant or financial adviser to analyze incomes and expenses correctly so that you can have the picture of how your business is moving.  One of many advantages of correct accounting records is that they may help you detect financial problems early before they break down your business.

Right Management

Management is the team of people who will run your business. These are decision makers, people to forecast the future of your business and control day to day activities to ensure goals of the business are met. You may be a part of the management team, or decide to stay as a non executive member.

To make sure they perform their jobs well, firstly they must be right people – as described earlier on the point of right people. Secondly they must be compensated well as discussed in point right budget for each and everything. Then there should be a way to measure their performance and control their decisions.

Management decides strategic direction of the business, control human resources, and manage marketing strategies of the business.

You  should remember that there should also be an appropriate succession program of management meaning that you know if someone in your management team can no longer work as a member of a team, you know who else within the organization can take his or her chance, and if not from the organization, then you have in place mechanism to employ from outside.