Tag: CONCLUSION

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!

FINANCING BASICS COURSE

LESSON 7

CONCLUSION

 

IN THIS COURSE, WE HAVE FIRST OF ALL LEARNT THE DIFFERENCES BETWEEN DEBT FINANCING AND EQUITY FINANCING. THE MAIN WAY OF DEBT FINANCING OCCURS IF YOU TAKE A LOAN FROM A BANK, THE MAIN WAY OF EQUITY FINANCIN OCCURS IF YOU TAKE AN INVESTOR – WHETHER PASSIVE OR ACTIVE – AS A PARTNER INTO YOUR BUSINESS.

THERE ARE SEVERAL ORGANISATIONS IN GHANA APART FROM BANKS WHICH GIVE OUT LOW-INTEREST LOANS – OR EVEN GRANTS – MAINLY TO START-UP BUSSINESSES. ON THE OTHER HAND, THERE ARE ALSO ORGANISATIONS OF SO-CALLED “ANGEL INVESTORS” THAT WOULD INVEST IN SMALL AND MEDIUM ENTERPRISES, ALSO FOR START-UP BUSINESSES.

THERE ARE ADVANTAGES AND DISAVANTAGES FOR BOTH FORMS OF FINANCING. ONE ADVANTAGE OF DEBT FINANCING IS THAT IS THAT IT IS MORE SHORT TERM THAN EQUITY FINANCING, ONE DISADVANTAGE – ESPECIALLY IN GHANA – IS A HIGH INTEREST RATE FOR LOANS. ONE ADVANTAGE OF EQUITY FINANCING IS THAT YOU DOM’T NEED TO PAY ANT INTEREST, AND THE RISK IS SHARED. ONE DISADVANTAGE IS THAT YOU GIVE AWAY PART OF YOUR BUSINESS, AS LONG AS THE BUSINESS EXISTS.

AT THE LONG RUN, WHETHER YOU PREFER DEBT FINANCING OR EQUITY FINANCING DEPENDS ON THE NATURE OF YOUR BUSINESS, AND ESPECIALLY ON YOUR OWN RISK PROFILE. WHETHER YOU ARE READY TO TAKE A BIG RISK OR YOU ARE A LOW-RISK TAKER, ONE THING YOU MUST DO BY ALL MEANS: YOU MUST ANALYSE YOUR INTENDED BUSINESS, WHETHER AS OBJECTIVELY AS POSSIBLE THE BUSINESS WILL BE SUCCESSFUL.