Tag: BUSINESS MANAGEMENT BASICS

BASICS OF BUSINESS MANAGEMENT

LESSON 1

INTRODUCTION; THE FIVE COMPONENTS OF BUSINESS MANAGEMENT

 

MORE A FOREWORD: AS USUAL WITH MY COURSES, THIS ONE ALSO DOES NOT GO DEEP INTO THEORY OF BUSINESS MANAGEMENT, ALTHOUGH THEORY PRINCIPALLY PLAYS AN IMPORTANT PART OF BUSINESS MANAGEMENT. THIS COURSE SHOULD GIVE NEW WOULD-BE ENTREPRENEURS SOME HINTS WHAT TO DO IN MANAGING THEIR BUSINESS, AND WHAT THEY JAVE TO EXPECT.

BEFORE WE START GETTING INTO DETAILS, WE NEED TO KNOW WHAT BUSINESS MANAGEMENT IS.

MANAGEMENT OR MANAGING IS

the process of coordinating and overseeing the activities of an organization to achieve its goals

(COURTESY OF BING)

WHERE BUSINESS IS ANY ECONOMIC ACTIVITY.

WE SEE THAT BUSINESS MANAGEMENT IS NOT A ONE-TIME APPEARANCE, BUT A PROCESS THAT LASTS AS LONG AS THE ECONOMIC ACTIVITY EXISTS.

THE PROCESS “BUSINESS MANAGEMENT” IS IN ITSELF DIVIDED INTO FIVE COMPONENTS WHICH THEMSELVES ARE PROCESSES. THESE COMPONENTS ARE:

— PLANNING,

— ORGANISING,

— STAFFING,

— LEADING, AND

— CONTROLLING.

THESE FIVE COMPONENTS DO NOT EXIST SEPARATED FROM EACH OTHER, BUT THEY ARE USUALLY OVERLAPPING. THAT MEANS THAT ONE OF THE COMPONENTS COMES INTO ACTION WHILE OTHERS ARE ALREADY ACTIVE. FOR EXAMPLE, YOU MIGHT BE PLANNING A NEW PART OF YOUR BUSINESS WHILE YOU ARE CONTROLLING THE EXISTING ONES. OR YOU MIGHT BE STAFFING A NEW PART OF YOUR BUSINESS WHILE YOU ARE LEADING THE EXISTING STAFF OF YOUR BUSINESS.

TO BE A SUCCESSFUL MANAGER, YOU MUST FOLLOW THESE FIVE COMPONENTS OF BUSINESS MANAGEMENT IN THEORY AND PRACTICE. IN THE NEXT LESSONS, WE WILL LOOK AT EACH COMPONENT MORE THOROUGHLY.

 

 

AND NOW TO THE QUESTIONS:

• DEFINE IN YOUR OWN WORDS WHAT MANAGEMENT IS.
• WHAT CAN BE MANAGED?
• HOW CAN BUSINESS BE DEFINED?
• WHAT ARE THE FIVE COMPONENTS OF BUSINESS MANAGEMENT?
• GIVE TWO EXAMPLES HOW YWO COMPONENTS OF BUSINESS MANAGEMENT CAN OVERLAP.

THE NEXT LESSON WILL BE PUBLISHED BEGINNING OF NEXT WEEK.

BASIC COURSE IN BUSINESS MANAGEMENT

LESSON 2

PLANNING

GOOD AND EXACT PLANNING IS ESSENTIAL FOR EVERY SUCCESSFUL BUSINESS. WITHOUT THOROUGH PLANNING, YOUR BUSINESS IS SURELY ABOUT TO FAIL. BUT LET US FIRST OF ALL LOOK HOW BUSINESS PLANNING IS DEFINED:

Planning is the primary function of management that involves formulating a future course of action for accomplishing a specific purpose. Planning enables managers to decide what task to do, how to do the task, when to do the task and by whom the task has to be done.

AND TO ACHIEVE A PLSNNING WHICH BENEFITS YOUR BUSINESS, YOU WILL NEED A BUSINESS PLAN.

A business plan is a roadmap for your business. It outlines your goals, strategies, and how you plan to achieve them. It’s a living document that you can update as your business grows and changes.

(COURTESY wisebusinessplans.com)

BUT NOBODY EXPECTS YOU TO WRITE A BUSINESS PLAN JUST LIKE THAT. YOU WILL NEED GUIDANCE HOW TO WRITE SUCH A BUSINESS PLAN. AND THERE ARE LOTS OF TEMPLATES TO BE FOUND ON THE INTERNET. IN MY OPINION, ONE OF THE BEST TEMPLATES IS THE PRINCE’S TRUST BUSINESS PLAN PACK. YOU CAN DOWNLOAD IT HERE:

BUSINESS_PLAN_2015.pdf (ctfassets.net)

WHEN YOU WRITE SUCH A BUSINESS PLAN – NO MATTER WHERE YOU TAKE THE TEMPLATE FROM – YOU MUST BE AWARE THAT SUCH A BUSINESS PLAN IS NOT A ONE-TIME EVENT. AS MUCH AS YOUR BUSINESS EVOLVES OVER TIME, THE BUSINESS PLAN HAS TO DO THE SAME. THAT MEANS THAT YOU HAVE TO REVIEW YOUR BUSINESS PLAN REGULARLY TO SEE WHETHER IT STILL REFLECTS REALITY, OR WHETHER YOU REALISED CHANGES FOR YOUR BUSINESS THAT NEED A CHANGE IN YOUR BUSINESS PLAN.

YOU SEE THAT THE BUSINESS PLAN’S PURPOSE IS NOT ONLY FOR EXTERNAL USE – THAT MEANS IF YOU WANT TO APPLY FOR A LOAN, OR YOU ARE LOOKNG FOR AN INVESTOR – BUT IT IS ALSO IMPORTANT FOR YOU PERSONALLY.

 

QUESTIONS:

• WHAT IS THE MAIN FUNCTION OF PLANNING?
• WHAT IS THE BEST WAY TO ACHIEVE THE FUNCTION OF PLANNING?
• WHAT IS THE PURPOSE OF A BUSINESS PLAN?
• WHAT IS ONE OF THE BEST TEMPLATES FOR A BUSINESS PLAN?
• WHY DO YOU HAVE TO REVIEW YOUR BUSINESS PLAN REGULARLY?

BASICS OF BUSINESS MANAGEMENT

LESSON 3

ORGANISING

 

BEFORE WE GO INTO THE DETAILS WHAT ROLE ORGANISING PLAYS IN BUSINESS MANAGEMENT, WE WILL FIRST OF ALL LOOK AT THE DEFINITION:

Organizing in management is a pivotal function that produces the harmonious collaboration of human efforts and resources, aligning them purposefully to achieve set objectives. It entails structuring, grouping, and coordinating resources – be it finances, materials, machinery, or manpower – to work collectively toward a particular goal.

(COURTESY OF BING)

ACTION WITHOUT PLANNING IS FATAL, BUT PLANNING WITHOUT ACTION IS FUTILE, AN OLD BUSINESS MANAGEMENT SAYING TELLS US. THAT IS BECAUSE EVEN IF YOU HAVE THE NICEST PLAN FOR YOUR BUSINESS, IT WON’T BE WORTH ANYTHING IF YOU WON’T PUT YOUR PLAN INTO REALITY. AND THE BEGINNING OF THIS REALITY IS TO ORGANISE YOUR UPCOMING BUSINESS. YOU HAVE A GOAL WHICH – ACCORDING TO YOUR PLAN – YOU WANT TO ACHIEVE, AND NOW YOU MUST START TO MAKE IT THE REALITY YOU WANT IT TO BE.

AS WE SEE FROM THE DEFINITION, ORGANISING YOUR BUSINESS MEANS THAT YOU GATHER ALL RESOURCES YOU HAVE AND MAKE THEM WORK FOR YOUR BUSINESS EFFICIENTLY. TO ACHIEVE THIS, YOU HAVE TO LAY OUT AN ORGANISATIONAL STRUCTURE; THIS ORGANISATIONAL STRUCTURE CAN ALREADY BE PART OF THE BUSINESS PLAN WHICH WE DISCUSSED IN AN EARLIER LESSON. THERE ARE MANY EXAMPLES FOR ORGANISATIONAL STRUCTURES ON THE INTERNET (FOR EXAMPLE 7 Organizational Structure Types (With Examples) – Forbes Advisor ), JUST CHECK IT OUT.

LET ME GIVE YOU AN EXAMPLE FOR ORGANISING YOUR BUSINESS:

LET’S ASSUME YOU WANT TO OPEN A SHOP SELLING BABY ARTICLES. YOU HAVE A SHOP IN A VERY GOOD AREA (REMEMBER: LOCATION, LOCATION, LOCATION IS ONE OF THE MOST IMPORTANT ISSUES RUNNING A SHOP). YOU HAVE ENOUGH CAPITAL TO PURCHASE GOODS TO SELL, AND YOU HAVE ONE EMPLOYEE (IT MIGHT BE ADVISABLE TO HAVE A FEMALE EMPLOYEE, AS YOU WANT TO SELL BABY ARTICLES; MOST OF THOSE ARTICLES MIGHT BE BOUGHT BY WOMEN, AND THEY MIGHT TRUST A FEMALE EMPLOYEE MORE THAN A MALE; YOUR BUSINESS IS NO SPACE FOR GENDER EXPERIMENTS).

NOW YOU MUST FIND THE BEST SUPPLIER FOR THE GOODS YOU WANT TO SELL. GET OFFERS FROM VARIOUS SUPPLIERS, AND COMPARE THE OFFERS. REMEMBER THAT THE CHEAPEST OFFER IS NOT ALWAYS THE BEST. THERE ARE MANY OTHER MATTERS  THAT PLAY A ROLE WHEN CHOOSING YOUR SUPPLIER, E.G. DELIVERY TIME FOR GOODS SUPPLIED, REPLACEMENT OF SPOILT OR OUTDATED GOODS, ETC,  IT MIGHT ALSO BE THAT YOU NEED MORE THAN ONE SUPPLIER, DEPENDING ON THE RANGE OF ITEMS YOU INTEND TO SELL. IN ONE SENTENCE: BE VERY CAREFUL AND THOROUGHFUL WHEN CHOOSING YOUR SUPPLIER(S).

MAKE ALSO SURE THAT YOUR INVENTORY IS UP-TO-DATE, AND THAT THERE ARE ALWAYS ENOUGH GOODS IN YOUR SHOP. FIND OUT HOW MUCH TIME IT TAKES FOR YOUR SUPPLIER TO DELIVER NEW ITEMS, AND ORDER THESE NEW ITEMS IN TIME.

THE SAME ACCOUNTS GENERALLY FOR YOUR EMPLOYEE. WELL, NOW THAT YOU FOUND A RELIABLE AND LOYAL EMPLOYEE (WE DISCUSS THE MATTER OF STAFFING IN A LATER LESSON), YOU MUST DISCUSS THE WORKING HOURS WITH HER. THE WORKING HOURS FOR YOUR EMPLOYEE MIGHT NOT BE IDENTICAL WITH THE OPENING HOURS OF THE SHOP, ESPECIALLY IF YOU INTEND TO BE PRESENT IN YOUR SHOP YOURSELF, IF YOU HAVE MONEY ENOUGH TO EMPLOY MORE THAN ONE STAFF, YOU MIGHT EVEN OPT FOR  SHIFTS. YOU MUST GIVE EVERY EMPLOYEE A JOB DESCRIPTION WHICH DEFINES EXACTLY THE ROLE THE EMPLOYEE WILL PLAY IN YOUR BUSINESS.

ORGANISING ACCOUNTING IS VERY CRUCIAL FOR YOUR BUSINESS. WITHOUT A PROPER ACCOUNTING, YOU MIGHT FACE A LOSS IN YOUR BUSINESS SOONER THAN LATER, AND THEN A BANKRUPTCY OF YOUR BUSINESS MIGHT NOT BE FAR AWAY.

WHEN YOU LOOK AT THE DEFINITION OF ORGANISING IN MANAGEMENT, YOU MIGHT THINK THAT IT IS VERY COMPLICATED. WELL, IT CAN BE COMPLICATED, BUT WE CAN TAKE INTO CONSIDERATION THAT YOUR BUSINESS IS A RATHER SMALL ONE, AND ORGANISING IT IS NOT TOO COMPLEX. IT WON’T TAKE MUCH OF YOU TO ARRANGE THE COOPERATION BETWEEN THE VARIOUS PARTS OF YOUR BUSINESS. THAT IN MIND, YOU MUST BY ALL MEANS HAVE A CLEAR VIEW THAT ALL THE COMPONENTS OF YOUR BUSINESS ARE DOING THEIR CONTRIBUTION FOR THE SUCCESS OF YOUR BUSINESS. HABING A SMALL OR MICRO BUSINESS DOES NOT MEAN THAT IT SHOULD BE ORGANISED BADLY, OR EVEN NOT AT ALL ORGANISED.

ALSO KEEP IN MIND THAT ORGANISING YOUR BUSINESS IS NOT ISOLATED FROM THE OTHER PARTS OF BUSINESS MANAGEMENT. AS WE HAVE DEALT WITH PLANNING BEFORE, THERE IS ALWAYS A CONNECTION BETWEEN ORGANISING AND PLANNING. IF YOU SEE ANY MISHAPS IN THE COOPERATION OF THE VARIOUS PARTS OF YOUR BUSINESS, YOU MUST ALWAYS PLAN HOW TO MAKE IT BETTER.

 

AND NOW TO THE QUESTIONS:

• WHAT IS THE MAIN PURPOSE OF ORGANISING IN MANAGEMENT?
• WHY IS IT NECESSARY TO HAVE AN ORGANISATIONAL STRUCTURE FOR YOUR BUSINESS?
• GIVE EXAMPLES FOR ORGANISATIONAL STRUCTURES!
• WHY IS ACCOUNTING IMPORTANT IN ORGANISING IN MANAGEMENT?
• HOW ARE PLANNING AND ORGANISING CONNECTED IN BUSINESS MANAGEMENT?

BASICS OF BUSINESS MANAGEMENT

APPENDIX TO LESSON 3: ACCOUNTING

 

ACCOUNTING PLAYS AN IMPORTANT ROLE IN ORGANISING YOUR BUSINESS. WITHOUT A PROPER ACCOUNTING, YOUR BUSINESS MIGHT COLLAPSE WITHIN THE FIRST YEAR OF EXISTENCE.

WELL, I KNOW THAT MOST PEOPLE BECOME AFRAID WHEN THEY HEAR THE WORD “ACCOUNTING”. THEY ASSOCIATE THE ITEM WITH DOUBLE-ENTRY ACCOUNTING, CALCULATING DEPRECIATION, AND OTHER HORROR IMAGINATIONS.

BUT FOR YOU AS OWNER OF A MICRO OR SMALL BUSINESS, THAT DOES NOT NEED TO BE THE CASE, AT LEAST NOT FOR THE BEGINNING. WHEN YOUR BUSINESS GROWS, YOU MIGHT NEED TO OCCUPY YOURSELF WITH ISSUES LIKE SPROGRAMMES ON THE INTERNET. OR YOU CAN USE SOME GUIDES OF HOW TO USE MICROSOFT EXCEL FOR ACCOUNTING PRACTCES.

BUT LET US GET BACK TO THE START OF OUR ACCOUNTING. FOR THE BEGINNING, IT IS SURELY ENOUGH TO USE A SIMPLE INCOME/EXPENSES METHOD TO SEE AT THE END OF THE MONTH WHETHER YOUR BUSINESS MADE A PROFIT AT THE END OF THE MONTH, OR A LOSS.

YOU MAKE A LIST WHICH UOU SEPARATE INTO THREE PARTS UP DOWN. ONE SMALLER PART ON THE LEFT IS RESERVED FOR THE DATE, THE NEXT PART WILL SHOW THE INCOME (KEEP IN MIND THAT YOUT INITIAL WORKING CAPITAL IS YOUR FIRST INCOME). THE INCOME MUST CONTAIN THE AMOUNT YOU RECEIVED, AND FOR WHAT YOU RECEIVED IT THE LAST COLUMN IS FOR THE EXPENSES AND MUST CONTAIN THE AMOUNT OF EXPENSES AND FOR WHAT. FOLLOWING IS A SAMPLE:

 

DATE	INCOME (IN GHC)	EXPENSES ( GHC)I
1ST JANUARY 2025	10,000 INITIAL WORKING CAPITAL	2,500 RENT
2ND JANUARY 2025		5,000 PURCHASE OF GOODS FOR SHOP (SPECIFY)
3RD JANUARY 2025	1,575 SALES OF GOODS ON THAT DAY (SPECIFY; GHC 500 PROFIT)
	AND SO ON	AND SO OM
TOTAL JANUARY 2025	TOTAL INCOME AT THE END OF JANUARY	TOTAL EXPENSES AT THE END OF JANUARY
TOTAL JANUARY	INCOME MINUS EXPENSES

 

IF YOU USE THIS SCHEME FOR THE ACCOUNTING, IT WILL SURELY BE SUFFICIENT FR YUR MICRO BUSINESS.

 

BASICS OF BUSINESS MANAGEMENT

LESSON 4

STAFFING

 

COMPARED WITH THE OTHER FOUR COMPONENTS OF BUSINESS MANAGEMENT, STAFFING MIGHT NOT BE EASIER TO ACCOMPLISH, BUT IT IS AT LEAST EASIER TO UNDERSTAND. HERE IS FIRST OF ALL THE DEFINITION:

An effective staffing process helps you find and retain strong candidates who are a good fit for your organization. More specifically, you can keep refining your staffing. Successful programs establish a continuous system of evaluating and developing your relationship with employees and selecting for qualities that are most effective. Ideally, the process of staffing can help you find great employees and maintain strong relationships with them.

DEFINITION IS COURTESY OF INDEED

OF COURSE, THE BASIC ASSUMPTION FOR EFFECTIVE STAFFING IS THAT YOU WILL NOT RUN YOUR BUSINESS ALONE, BUT THAT YOU TAKE ONE OR MORE EMPLOYEES.

THE FIRST STEP TO FIND THE SUITABLE EMPLOYEE FOR YOUR BUSINESS IS TO INTER VIEW CANDIDATES. YOU MIGHT FIND THESE CANDIDATES AMONG YOUR FRIENDS AND ACQUAINTANCIES, OR YOU MIGHT PUT AN ADVERTISEMENT IN LOCAL AND/ OR SOCIAL MEDIA.

WHEN ONE OR MORE CANDIDATES HAVE CONTACTED YOU FOR THE JOB, WE WILL GET TO THE INTERVIEWS. BUT BEFORE YOU START THE INTERVIEWS, IT IS ADVISABLE TO DEVELOP A SO-CALLED “QUESTIONNAIRE”. A QUESTIONNAIRE IS A LIST OF QUESTIONS WHICH YOU CONSIDER IMPORTANT TO FIND THE RIGHT EMPLOYEEYOU’RE YOUR BUSINESS. BASIC QUESTIONS SHOULD BE THOSE FOR AGE AND EDUCATION LEVEL. FOR SOME JOBS, IT MIGHT ALSO BE NECESSARY TO KNOW WHETHER THE CANDIDATE – NO MATTER WHETHER FEMALE OR MALE – IS MARRIED AND HAS CHILDREN, OR – ANOTHER ADRA OF IMPORTANCE – HOW THE CANDIDATE’S KNOWLEDGE OF THE ENGLISH LANGUAGE IS. OTHER QUESTIONS MOSTLY DEPEND ON THE KIND OF JOB YOU WANT TO HAVE AN EMPLOYEE FOR.

BUT MOST IMPORTANTLY – AS YOU CAN ALSO SEE FROM THE DEFINITION – YOU MUST BE ABLE TO ESTABLISH A POSITIVE RELATIONSHIP WITH YOUR FUTURE EMPLOYEE. BE CAREFUL: DON”T MISUNDERSTAND A POSITIVE RELATIONSHIP AS LEADING TO AN INTIMATE RELATIONSHIP WITH YOUR FUTURE EMPLOYEE! AN INTIMATE RELATIONSHIP COULD LEAD TO AN INCORRECT JUDGMENT OF THE EMPLOYEE’S HANDLING OF YOUR BUSINESS.

SO, WHAT IS A POSITIVE RELATIONSHIP THEN? THERE ARE FOUR PARTS THAT CONSTITUTE A POSITIVE RELATIONDHIP. THESE ARE:

— MUTUAL RESPECT,

— TRUST,

— COOPERATION, AND

— UNDERSTANDING.

IN PRINCIPLE, THESE FOUR SHOULD CONSTITUTE THE BASIC OF EVERY RELATIONSHIPL UNFORTUNATELY, THEY DO NOT. MOREOVER, THEY ARE EXTREMELY IMPORTANT IN AN EMPLOYER-EMPLOYEE RELATIONSHIP,THE EMPLOYER MUST SHOW RESPECT TO HIS EMPLOYEE (AND VICE VERSA), AND ONLY WITH A TRUSTFUL COOPERATION BETWEEN THE TWO THE BISINESS WILL BE SUCCESSFUL FOE THE MUTUAL BENEFIT OF THE TWO.

AND NOW TO THE QUESTIONS:

• WHEN – ACCORDING TO THE DEFINITION – WILL A STAFFING PROCESS BE EFFECTIVE?
• IN WHAT WAYS CAN YOU LOOK FOR CANDIDATES FOR A JOB IN YOUR BUSINESS?
• WHAT SHOULD YOU PREPARE BEFORE THE INTERVIEWS WITH THE CANDIDATES?
• WHAT ARE THE BASIC QUESTIONS IN EVERY JOB INTERVIEW?
• WHAT ARE THE FOUR COMPONENTS OF A POSITIVE RELATIONSHIP BETWEEN EMPLOYER AND EMPLOYEE?

THE NEXT LESSON WILL FOLLOW SOON – WATCH OUT!

BASICS OF BUSINESS MANAGEMENT

LESSON 5

LEADING

 

 

BEFORE WE GO INTO DETAILS OF THIS LESSON, HERE FIRST OF ALL THE DEFINITION OF LEADERSHIP IN BUSINESS MANAGEMENT:

Leading in management is typically taking control of a team to provide direction and make decisions that help achieve the goals they have set. It can involve motivating, inspiring and empowering those around you to follow your lead. Leaders can be essential for the good of all members within an organisation that they manage.

AS YOU SEE FROM THIS DEFINITION, IT COVERS THE LEADERSHIP IN REGARD OF A TEAM. BUT I AM OF THE OPINION THAT SOMETIMES YOU ALSO NEED SOME KIND OF LEADERSHIP WHEN YOU WORK ALONE IN YOUR BUSINESS. THEREFORE, I WILL FIRST CONCENTRATE ON LEADING WITHIN YOUR BUSINESS WHEN YOU WORK ALONE, AND THEN SWITCH TO THE QUESTION OF LEADERSHIP IN A TEAM (KEEP IN MIMD THAT EVEN IF YOU ONLY HAVE ONE EMPLOYEE, YOU BOTH FORM A TEAM).

WHEN YOU HAVE A MICRO OR SMALL BUSINESS – AND YOU WORK ALONE AND DON’T HAVE ANYONE WITH WHOM YOU CAN SHAREIT WHEN A PROBLEM OCCURS – YOU HAVE TO “LEAD” YOURSELF OUT OF THE PROBLEM. YOU MUST LOOK AT WHAT YOU WANT TO ACHIEVE – THAT’S WHY IT IS GOOD IF YOU HAVE A WRITTEN BUSINESS PLAN -, AND LOOK AT THE PROBLEM WHICH YOU ARE FACING. REFLECT OVER THE PROBLEM – WHICH IS MORE OR LESS DISCUSSING THE PROBLEM WITH ONESELF – AND THEREBY LEAD YOURSELF OUT OF THE ISSUE.

TO FOLLOW THIS PROCEDURE, YOU MUST DEVELOP SOME KIND OF LEADERSHIP. LET’S HAVE A LOOK AT THE DEFINITION AGAIN: LEADING IN MANAGEMENT IS TAKING CONTROL OF A TEAM – THE TEAM IN THIS CASE IS YOU – TO PROVIDE DIRECTION – SOLVING THE PROBLEM – TO MAKE A DECISION FOR THE SUCCESS OF THE BUSINESS, YOU CAN SEE THAT EVEN IF YOU ARE WORKING ALONE, YOU MUST PRACTICE SOME KIND OF LEADERSHIP FOR THE SUCCESS OF YOUR BUSINESS.

OF COURSE, THAT ACCOUNTS EVEN MORE IF YOU REALLY HAVE PEOPLE WORKING FOR YOU. YOU HAVE A REAL TEAM, AND YOU WANT TO ACHIEVE SOMETHING TOGETHER WITH THEM.IUTO BE ABLE TO LEAD YOUR TEAM, YOU MUST BUILD UP A RELATIONSHIUFFFFP OF TRUST. YOU HAVE SURELY CHOSEN PEOPLE IN THE “STAFFING” SEGMENT OF WHOM YOU THINK THAT THEY WILL BE ABLE TO ASSIST YOU IN ACHIEVING YOUR GOALS. NOW YOU MUST  BE CONVINCING THEM IN DETAILS –GENERALLY YOU ALREADY HAVE TO DO IT IN “STAFFING” – WHAT THEY HAVE TO DO WITHIN THEIR WORKFRAME TO ACHIEVE SUCCESS IN THE BUSINESS. YOU MUST BE ABLE TO TELL THEM CONVINCINGLY THAT WHENEVER THEY HAVE A QUESTION, YOU WILL ALWAYS BE THERE FOR THEM TO ANSWER AND TO ASSIST THEM IN FINDING THE CORRECT SOLUTION.

AT THE SAME TIME, YOU SHOULD ALSO NOT FALL INTO A BLAMING MOOD WHEN THEY MADE A MISTAKE. EXPLAIN WHAT THEY DID WRONG, AND HOW THEY CAN DO IT BETTER OR CORRECTLY. BUT ALSO, IF THEY DO THE SAME MISTAKE SEVERAL TIME,  AND THEY WON’T ACCEPT YOUR CORRECTION ATTEMPTS, YOU SHOULD NOT HESITATE TO DRAW THE CONSEQUENCES AND RELEASE THEM FROM THEIR DUTIES. KEEP IN MIND THAT A TEAM IS ONLY AS STRONG AS ITS WEAKEST LINK, AND IN ORDER TOSTRENGTHEN YOUR TEAM, YOU MUST BE CONSEQUENT.

THIS IS ESPECIALLY DIFFICULT IF YOUR EMPLOYEE IS A RELATIVE OR A GOOD FRIEND. BUT IF YOU WANT TO BE SUCCESSFU L IN YOUR BUSINESS, YOU HAVE TO BE CONSEQUENT IN ALL ASPECTS.

BUT LEADING IS NOT ONLY LOOKING FOR MISTAKES AND CORRECTING THEM. A BIG PART OF LEADING YOUR TEAM IS MOTIVATING THEM, REWARDING THEM FOR WHAT THEY HAVE DONE RIGHT. THAT WOULD GIVE THE TEAM AND EACH MEMBER THE FEELING THAT THEY ARE NEEDED FOR THE SUCCESS OF THE BUSINESS.

THIS REWARDING OR MOTIVATING CAN BE IN INCENTIVES – MOSTLY FINANCIAL -, BUT CAN ALSO BE IN GIVING THE EMPLOYEE(S) MORE RESPONSIBILITY.

LOOKING AT THE END EFFECT, A GOD AND RESPONSIBLE LEADERSHIP IS ABSOLUTE ESSENTIAL FOR A GOOD BUSINESS.

 

 

 

QUESTIONS:

• WHAT ARE THE ESSENTIALS OF A GOOD LEADERSHIP IN MANAGEMENT?

 

• HOW ARE LEADERSHIP QUALITIES NECESSARY WHEN YOU ARE WORKING ALONE IN YOUR BUSINESS?

 

 

• WHAT DO YU HAVE TO DO IF AN EMPLOYEE MAKES A MISTAKE?

 

• WHAT ARE THE DIFFICULTIES IN YOUR LEADERSHIP IF THE EMPLOYEE IS A RELATIVE OR A GOOD FRIEND?

 

 

• GIVE A BRIEF SUMMARY OF THE LESSON!

BASICS OF BUSINESS MANAGEMENT

LESSON 6

CONTROLLING

 

AS USUAL IN THESE LESSONS, WE START WITH THE DEFINITION OF CONTROLLING IN BUSINESS MANAGEMENT:

Control is a primary goal-oriented function of management in an organisation. It is a process of comparing the actual performance with the set standards of the company to ensure that activities are performed according to the plans and if not then taking corrective action.

WE SEE THAT CONTROLLING IS A PROCESS, WHICH MEANS TWO  DIFFERENT THINGS:

• YOU PERFORM A PROCESS IF YOU COMPARE THE PERFORMANCE AT A CERTAIN POINT IN TIME WITH THE STANDARDS OF THE COMPANY, WHICH MEANS THE RESULTS THAT YOU WANT TO ACHIEVE;
• THE JUST MENTIONED COMPARISON IS AN ONGOING PROCESS UNTIL THE PERFORMANCE REALLY ACHIEVES THE INTENDED TARGET IS FINALLY ACHIEVED.

 

LET’S TAKE AN EXAMPLE: WE ASSUME THAT YOU HAVE THE STANDARD TO BE THE BEST-SELLING GROCERY SHOP IN TOWN. WHAT YOU WILL DO FIRST IS TO INVESTIGATE WHICH THE BEST-SELLING GROCERY SHOPS ARE AT THE MOMENT. YOU COMPARE

THEIR SELLING PERFORMANCE WITH YOURS. THIS IN ITSELF IS A    PROCESS, AS IT TAKES YOU TWO DIFFERENT ACTIONS WHICH YOU   COMBINE: THE INVESTIGATION ABOUT THE PERFORMANCE  F OTHE GRCERY SHOPS, AND THE COMPARISON WITH YOUR PERFORMANCE.

AS YOU SURELY HAVEN’T REACHED YOUR GIVEN STANDARD, YOU WILL REPEAT THIS PROCEDURE OVER AND OVER AGAIN UNTIL THE STANDARD YU WANT TO HAVE IS REACHED.

HERE IS ANOTHER EXAMPLE FROM A DIFFERENT INDUSTRY: A CAR MANUFACTURER DOES NOT PRODUCE ENGINES BY IT SELF, BUT ORDERS THEM FROM A SUPPLIER. FOR THESE ENGINES, THE CAR MANUFACTURER DEMANDS A CERTAIN STANDARD. WHENEVER A DELIVERY OF ENGINES ARRIVES, THE CONTROLLER CHECKS WHETHER THE ENGINES FULFIL THE STANDARD THE COMPANY DEMANDS. AS THIS PROCEDURE IS REPEATED OVER AND OVER AGAIN, WE HAVE THE OTHER – THIS TIME GENERAL – PROCESS.

GOING BACK TO YOUR EXAMPLE, WE CAN SEE THE NECESSITY OF A WELL-ELABORATED BUSINESS PLAN, AS IT WAS MENTIONED IN THE “PLANNING”  LESSON. THE BUSINESS PLAN SETS THE STANDARDS YOU WANT TO ACHIEVE IN YOUR BUSINESS. HERE YOU ALSO HAVE THE STEP-BY-STEP GOALS WITH WHICH YOU CAN COMPARE YUR CURRENT PERFORMANCE UNTIL YOU REACH THE STANDARDS SET BY YOUR BUSINESS PLAN.

ON THE OTHER HAND YOU MUST REVIEW YOUR BUSINESS PLAN REGULARLY TO FIND OUT WHETHER THE STANDARDS YOU HAVE SET ORIGINALLY ARE STILL VALID. IN THIS WAY, YOU WILL FIND OUT WHETHER THESE STANDARDS MUST RE-ORGANISED BACKWARDS, BECAUSE YOU WILL NOT BE ABLE TO REACH THEM, OR IF YU CAN SET IMPROVED STANDARDS, BECAUSE EITHER YOU HAVE ALREADY ACHIEVED THEM OR YOU ARE ON THE BEST WAY TO DO SO. IN THIS CASE, YOU MUST SET NEW STANDARDS TO REFLECT YOUR AMBITIONS.

HERE WE SEE HOW IMPORTANT IT IS TO HAVE A VALID BUSINESS PLAN, FOR THE CONTROLLING ASPECT OF THE BUSINESS MANAGEMENT AS WELL AS FOR THE OTHER COMPONENTS.

 

QUESTIONS:

• WHAT DO YOU COMPARE WHEN PERFORMING THE CONTROLLING COMPONENT OF BUSINESS MANAGEMENT?
• WHAT IS THE IMPORTANCE OF SETTING STANDARDS FOR YOUR BUSINESS?
• GIVE TWO EXAMPLES FOR COMPARING PERFORMANCE OF A BUSINESS WITH ITS STANDARDS!
• WHAT IS THE IMPORTANCE OF A BUSINESS PLAN FOR CONTROLLING?
• WHY IS IT IMPORTANT FOR CONTROLLING TO REVIEW YUR BUSINESS PLAN REGULARLY?

BASICS OF BUSINESS MANAGEMENT

LESSON 7

CONCLUSION – WHAT HAVE WE LEARNT?

 

FIRST OF ALL, YOU MUST KEEP IN MIND THAT BUSINESS MANAGEMENT GENERALLY CONSISTS OF FIVE COMPONENTS:

• PLANNING,
• ORGANISING,
• STAFFING,
• LEADING, AND

ALTHOUGH EACH OF THESE COMPONENTS IS FUNDAMENTAL FOR A SUCCESSFUL BUSINESS, STAFFING WILL NOT APPLY TO YOU IF YOU ARE WORKING  ALONE. BUT EACH OF THE OTHER COMPONENTS IS EQUALLY IMPORTANT, NO MATTER HOW BIG YOUR BUSINESS IS. ONLY THE DEGREE HOW DIFFICULT THE COMPONENT IS DEPENDS ON THE SIZE OF THE BUSINESS.

FOLLOWING ARE DEFINITIONS OF EACH COMPONENT IN ONE SENTENCE:

• PLANNING MEANS WHAT YOU WANT TO ACHIEVE WITH YOUR BUSINESS, AND HOW YOU WANT TO ACHIEVE IT.
• ORGANISING MEANS TO ALIGN HUMAN LABOUR AND AVAILABLE RESOURCES SO THAT THE PLANNED SUCCESS CAN BE ACHIEVED.
• STAFFING (ONLY IF IT APPLIES TO YOU) MEANS CHOOSING THE RIGHT PEOPLE WITH WHOM YOU WORK TOGETHER FOR THE SUCCESS OF THE BUSINESS.
• LEADING MEANS TO SHOW THE PEOPLE YOU ARE WORKING WITH – OR YOURSELF IF YOU ARE WORKING ALONE – THE RIGHT STEPS TO ACHIEVE A SUCCESSFUL BUSINESS.
• CONTROLLING MEANS TO HAVE THE OVERSIGHT OVER PEOPLE AND PROCEDURES SO THAT THE EXPECTED SUCCESS IS ACHIEVED.

AT THE BEGINNING, IT MIGHT BE DIFFICULT FOR YOU TO CORRECTLY ALL THESE FIVE COMPONENTS, BUT IF YOU ARE CONSEQUENT, YOU WILL SEE THE SUCCESS IN NO TIME.

AND REMEMBER THAT A WRITTEN BUSINESS PLAN IS AN ESSENTIAL FOUNDATION FOR YOUR BUSINESS.

 

AND NOW I WISH YOU GOOD LUCK IN THE DEVELOPMENT OF YOUR BUSINESS!

 

MORE A FOREWORD: AS USUAL WITH MY COURSES, THIS ONE ALSO DOES NOT GO DEEP INTO THEORY OF BUSINESS MANAGEMENT, ALTHOUGH THEORY PRINCIPALLY PLAYS AN IMPORTANT PART OF BUSINESS MANAGEMENT. THIS COURSE SHOULD GIVE NEW WOULD-BE ENTREPRENEURS SOME HINTS WHAT TO DO IN MANAGING THEIR BUSINESS, AND WHAT THEY JAVE TO EXPECT.

BEFORE WE START GETTING INTO DETAILS, WE NEED TO KNOW WHAT BUSINESS MANAGEMENT IS.

MANAGEMENT OR MANAGING IS

the process of coordinating and overseeing the activities of an organization to achieve its goals

(COURTESY OF BING)

WHERE BUSINESS IS ANY ECONOMIC ACTIVITY.

WE SEE THAT BUSINESS MANAGEMENT IS NOT A ONE-TIME APPEARANCE, BUT A PROCESS THAT LASTS AS LONG AS THE ECONOMIC ACTIVITY EXISTS.

THE PROCESS “BUSINESS MANAGEMENT” IS IN ITSELF DIVIDED INTO FIVE COMPONENTS WHICH THEMSELVES ARE PROCESSES. THESE COMPONENTS ARE:

— PLANNING,

— ORGANISING,

— STAFFING,

— LEADING, AND

— CONTROLLING.

THESE FIVE COMPONENTS DO NOT EXIST SEPARATED FROM EACH OTHER, BUT THEY ARE USUALLY OVERLAPPING. THAT MEANS THAT ONE OF THE COMPONENTS COMES INTO ACTION WHILE OTHERS ARE ALREADY ACTIVE. FOR EXAMPLE, YOU MIGHT BE PLANNING A NEW PART OF YOUR BUSINESS WHILE YOU ARE CONTROLLING THE EXISTING ONES. OR YOU MIGHT BE STAFFING A NEW PART OF YOUR BUSINESS WHILE YOU ARE LEADING THE EXISTING STAFF OF YOUR BUSINESS.

TO BE A SUCCESSFUL MANAGER, YOU MUST FOLLOW THESE FIVE COMPONENTS OF BUSINESS MANAGEMENT IN THEORY AND PRACTICE. IN THE NEXT LESSONS, WE WILL LOOK AT EACH COMPONENT MORE THOROUGHLY.

 

 

AND NOW TO THE QUESTIONS:

• DEFINE IN YOUR OWN WORDS WHAT MANAGEMENT IS.
• WHAT CAN BE MANAGED?
• HOW CAN BUSINESS BE DEFINED?
• WHAT ARE THE FIVE COMPONENTS OF BUSINESS MANAGEMENT?
• GIVE TWO EXAMPLES HOW YWO COMPONENTS OF BUSINESS MANAGEMENT CAN OVERLAP.

THE NEXT LESSON WILL BE PUBLISHED BEGINNING OF NEXT WEEK.

 

ACCOUNTING PLAYS AN IMPORTANT ROLE IN ORGANISING YOUR BUSINESS. WITHOUT A PROPER ACCOUNTING, YOUR BUSINESS MIGHT COLLAPSE WITHIN THE FIRST YEAR OF EXISTENCE.

WELL, I KNOW THAT MOST PEOPLE BECOME AFRAID WHEN THEY HEAR THE WORD “ACCOUNTING”. THEY ASSOCIATE THE ITEM WITH DOUBLE-ENTRY ACCOUNTING, CALCULATING DEPRECIATION, AND OTHER HORROR IMAGINATIONS.

BUT FOR YOU AS OWNER OF A MICRO OR SMALL BUSINESS, THAT DOES NOT NEED TO BE THE CASE, AT LEAST NOT FOR THE BEGINNING. WHEN YOUR BUSINESS GROWS, YOU MIGHT NEED TO OCCUPY YOURSELF WITH ISSUES LIKE SPROGRAMMES ON THE INTERNET. OR YOU CAN USE SOME GUIDES OF HOW TO USE MICROSOFT EXCEL FOR ACCOUNTING PRACTCES.

BUT LET US GET BACK TO THE START OF OUR ACCOUNTING. FOR THE BEGINNING, IT IS SURELY ENOUGH TO USE A SIMPLE INCOME/EXPENSES METHOD TO SEE AT THE END OF THE MONTH WHETHER YOUR BUSINESS MADE A PROFIT AT THE END OF THE MONTH, OR A LOSS.

YOU MAKE A LIST WHICH UOU SEPARATE INTO THREE PARTS UP DOWN. ONE SMALLER PART ON THE LEFT IS RESERVED FOR THE DATE, THE NEXT PART WILL SHOW THE INCOME (KEEP IN MIND THAT YOUT INITIAL WORKING CAPITAL IS YOUR FIRST INCOME). THE INCOME MUST CONTAIN THE AMOUNT YOU RECEIVED, AND FOR WHAT YOU RECEIVED IT THE LAST COLUMN IS FOR THE EXPENSES AND MUST CONTAIN THE AMOUNT OF EXPENSES AND FOR WHAT. FOLLOWING IS A SAMPLE:

 

DATE	INCOME (IN GHC)	EXPENSES ( GHC)I
1ST JANUARY 2025	10,000 INITIAL WORKING CAPITAL	2,500 RENT
2ND JANUARY 2025		5,000 PURCHASE OF GOODS FOR SHOP (SPECIFY)
3RD JANUARY 2025	1,575 SALES OF GOODS ON THAT DAY (SPECIFY; GHC 500 PROFIT)
	AND SO ON	AND SO OM
TOTAL JANUARY 2025	TOTAL INCOME AT THE END OF JANUARY	TOTAL EXPENSES AT THE END OF JANUARY
TOTAL JANUARY	INCOME MINUS EXPENSES