THE MAIN PROBLEM FOR MICRO ENTERPRISES IS BUSINESS MANAGEMENTMANY OWNERS OF MICRO ENTERPRISES – SMALL SHOPS, ETC. – BELIEVE THAT THE MAIN PROBLEM WHY THEIR BUSINESSS HAVE DIFFICULTIES TO SURVIVE IS THE LACK OF ADEQUATE FINANCING. ALTHOUGH FINANCING PLAYS A VERY IMPORTANT ROLE FOR YOUR BUSINESS, I BEG TO HAVE A DIFFERENT OPINION, AT LEAST TO SOME EXTENT.
THE MAIN PROBLEM FOR THESE OWNERS IS THAT THEY DON’T MANAGE THEIR BUSINESS IN A PROPER MANNER. IT STARTS WITH THE PLANNING OF THE BUSINESS, WHICH IS ESSENTIAL BEFORE YOU EVEN START YOUR ENTERPRISE.
TO REMAIN WITH THE FUTURE SHOPOWNER: IT IS NOT ENOUGH TO RENT A SHOP, BUY SOME GOODS, PUT THEM IN THE SHOP, AND SELL THEM FOR A HIGHER PRICE, FOR WHICH YOU PURCHASED THEM. INSTEAD, YOU MUST INVESTIGATE WHICH GOODS WOULD SELL BEST, AND IF YOU COULD GET THEM CHEAPER THAN WHERE YOU PURCHASED THEM. IF YOU ARE LUCKY, YOU WOULD EVEN BE ABLE TO GET A WHOLESALE CONTRACT FOR SOME GOODS.
LET’S ASSUME THAT NOW YOU HAVE YOUR SHOP, AND YOU ARE STARTING TO SELL THE GOODS YOU HAVE.. NOW YOU MUST ALSO BEGIN ACCUNTING FOR YOUR BUSINESS. AS A MICRO BUSINESS OWNER STARTING YOUR BUSINESS, IT IS SURELY NOT NECESSARY TO APPLY DIFFICULT ACCOUNTING METHODS LIKE DOUBLE-ENTRY ACCOUNTING. BUT A SIMPLE INCOME/EXPENSES ACCOUNTING IS AN ABSOLUTE NECESSITY FOR YOUR START-UP BUSINESS, WHICH YOU SHOULD APPLY FROM THE FIRST DAY ON. ONLY BY DOING SO, YOU WILL HAVE A CLEAR OVERVIEW OF THE FINANCIAL SITUATION. AND IF LATER ON YOU DECIDE TO TAKE A LOAN FROM A BANK, OR MONEY FROM AN INVESTOR TO EXPAND YOUR BUSINESS, THEY WILL SURELY ASK FOR INFORMATIOIN ABOUT THE FINANCIAL SITUATION OF YOUR BUSINESS – CASHFLOW, MONTHLY NET PROFIT, AND SO ON. AND PLEASE, DIFFERENTIATE THOROUGHLY BETWEEN EXPENSES FOR YOUR SHOP AND PRIVATE EXPENSES, IF YOU TAKE MONEY OUT OF YOUR BUSINESS FOR YOUR PRIVATE USE.
TALKING ABOUT BANKS; I ALSO CONSIDER IT VERY IMPORTANT TO HAVE AT LEAST ONE BANK ACCOUNT THROUGH WHICH MOST OF YOUR INCOME AND EXPENSES WILL FLOW. THE STATEMENTS OF ACCOUNT YOUR BANK WILL SUPPLY YOU WITH WILL SURELY HELP YOU TO WORK OUT AN EXACT BOOKKEEPING. FOR A MICROBUSINESS ESPECIALLY IN THE RURAL AND SEMI-RURAL AREAS, YOUR LOCAL RURAL AND COMMUNITY BANKS SURELY OFFER SERVICES THAT WILL ASSIST YOU IN GROWING YOUR BUSINESS.
RELATED TO ACCOUNTING – AND PART OF BOOKKEEPING – IS KEEPING AN INVENTORY. THE INVENTORY GIVES YOU AN OVERVIEW HOW MANY GOODS YOU HAVE IN YOUR STORE AT A CERTAIN POINT IN TIME. THIS POINT IN TIME CAN THEORETICCALLY BE ANY DATE, BUT IN ORDER TO HAVE A BETTER MANAGEMENT BASE, IT IS ADVISABLE TO ALWAYS USE THE SAME DAY IN EVERY MONTH, E.G., THE LAST DAY OF THE MONTH. ON THIS DAY, YOU MUST REGISTER HOW MANY GOODS YOU STILL HAVE IN STOCK. IF YOU DO THAT EVERY MONTH, YOU WILL SOON HAVE AN IMPORTANT INFORMATION ON HOW YOUR STORE DEVELOPS. IF YOUR INVENTORY IS TOO SMALL, THERE IS A PROBLEM WITH THE SUPPLY; IF YOUR INVENTORY IS TOO LARGE, THERE IS A PROBLEM WITH THE DEMAND.
BUSINESS MANAGEMENT GENERALLY COMPRISES FIVE ELEMENTS: PLANNING, ORGANISING, STAFFING, LEADING, AND CONTROLLING. SOME OF THOSE WON’T PLAY A BIG ROLE, OR EVEN NO ROLE, IN YOUR MICRO BUSINESS, IF YOU MANAGE IT , STAFFING AND LEADING ARE THEN MORE OR LESS OBSOLETE. BUT AT LEAST THE REST OF THESE ELEMENTS MUST BE OBSERVED CONSEQUENTLY, IF YOU WANT TO BE SUCCESSFUL IN YOUR BUSINESS.
RECKLING ENTERPRISE IS CURRENTLY WORKING ON A BASIC COURSE IN BUSINESS MANAGEMENT, WHERE WE DEAL WITH ALL THOSE ELEMENTS. YOU CAN THEN HAVE A MORE THOROUGH IDEA OF WHAT IS IMPORTANT FOR YOUR BUSINESS SUCCESS.
