It has been discovered that most new businesses fail due to inadequate understanding of good business management techniques.
As a result, commercial banks and other financial institutions are reluctant to lend to them.
Experts note that fundamental business management skills can assist these business owners in making good business decisions.
According to them, not all business management skills can be acquired in the classroom because most are acquired as the business owner becomes consistent in its operations.
They say new entrants into the business world are susceptible to mistakes, but the most important thing is for them to learn from the mistakes.
As a result, experts have highlighted some strategies to managing start-ups and growing them into a more profitable venture with larger market share.
Develop a business plan
It has been discovered that business plan is an indispensable tool in locating potential investors, making improvement on the existing business and applying for loans.
A business consultant, Mr. Caleb Makinde, says the content of a business plan should include the target demographic group, the conditions of the market, the risk envisaged in the business, the initial capital investment and its source among others.
He says research has proved that businesses with good plans are more likely to succeed than those without one.
Implement the business plan
After designing a good business plan, it should not be set aside but used at every stage of the business, Makinde says.
According to him, the business plan can be used to measure the progress of the business and determine the next line of action to take.
He says, “As years go by, the business plan can be updated every time in order for it to be in line with conventional business management techniques. If your business grows as planned, you can be sure that the content of the plan will achieve your overall goals. But if things are not developing as planned, you can make appropriate corrections.”
Get access to finance
No business can be successful without the requisite start-up capital needed to run it.
However, experts note that most business owners misuse the funds after getting it, due to its mismanagement.
The Managing Director, Royal Services, Mrs. Deborah Adegbola, says apart from having a brilliant business idea, one of the basic preparations entrepreneurs should make is getting funds through personal efforts.
According to her, this may be in form of savings that have accrued over the years or the sale of unused properties, landed properties, vehicle or rent.
She says, “When personal savings and liquidated assets form the initial funds used in starting a business, it shows a form of commitment and dedication to the venture. The first place to start looking for start-up funds is from your personal savings and asset base. To further support what you already have, you can approach banks and other financial institutions for loans.”
She adds that when applying for a loan, the funds should be treated as a business investment and not a gift.
According to her, funds should be utilised in ventures with low risk and high probability of huge financial returns within the stipulated time frame.
Fix reasonable prices
Most business managers are often at a dilemma on how to fix prices for services rendered or for goods offered for sale.
Experts observe that the confusion arises when the competitors sell the same goods of equal quality at lower prices.
In order to set prices that will be attractive enough to draw the attention of clients, Adegbola advises that ensuring that the costs are minimal as much as possible is the first step.
According to her, an easy approach is researching the prices of services or goods of competitors in the industry and using the information to fix comparable price for similar services and goods.
She says, “Reducing cost will ensure that the business will not run at a loss when the price is eventually fixed.”
She adds that an alternative way of fixing a price is to calculate all costs incurred in rendering the service or producing specific goods, then adding expected profit for efforts put in will give the selling price.
Most consumers view cheap services and goods as ones of low quality, therefore, Adegbola advises against using low prices to attract clients but promotional discounts or other sales incentives can be introduced to encourage increased patronage.
Build a strong business structure
Inability to meet customer demands in terms of quality and quantity and at the right time can be detrimental to the success of businesses.
Therefore, experts suggest building a strong business structure that takes care of unexpected challenges.
Such a system, according to Adegbola, should cater for getting new customers and retaining them as well as creating awareness for the business using different marketing techniques.
She urges organisations to establish a culture that every employee should respect and adhere to.
She says, “Refine them and put them down on paper for every employee to use. Establish a system for addressing customer complaints in a timely manner.
“Develop a system for answering the phone, responding to email, and handling customer service. Have an operations manual that gives answers to all the questions people ask over the phone.
“Your business should be built in such a way that when you are not there, the employees will do things the right way and nothing will go wrong. A sense of ownership and commitment should be built in the employees. Ensure that every transaction is done with evidence and the records kept.”
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