Chances are, you’ve had to make some changes to your company’s internal structure in response to the economic downturn (and in preparation for the slow recovery). As with everything in business, restructures can be done well and they can be done poorly. Here are seven principles to help you avoid unnecessary complications.
Even as the economic outlook appears to brighten, the fact remains that many organisations can no longer operate as they had been. A key feature of this changing landscape is the need for organisations to restructure.
Here are seven broad restructuring principles to help make any restructure a successful one.
1. Align structure to strategy
All restructures must align to strategy. This may seem self-evident, yet a significant number of organisations fail to do so. For example, if local conditions are a predominant factor, then stress local sales and marketing functions rather than a centralized behemoth that then tries to matrix with local elements.
2. Reduce complexity
Simply put, complexity costs. Whether it is a complex organisational structure, a complex product offering or complex transactional processes, the added cost of complexity can be a drag on performance.
To mitigate complexity, there are three considerations that help with organisational design:
Design structure for strategy before you design for specific personnel. Organisational redesigns which are a compromise between strategic intent and line management preferences inevitably add complexity. So, while internal political intrigue is unavoidable, at least start with a clean and clear design that matches to strategy.
Avoid making leadership roles too complex (see principle #5).
Minimise the use of matrices. They introduce measurement overhead and a lack of clear direction to the staff.
3. Focus on core activity
A Good Business Consultant Has Extensive Experience
A good Business Consultant has experience working in and working with a broad range of businesses. It is the accumulated business history of a Business Consultant which makes the consultant valuable. A good Business Consultant is experienced in a lot of different types of businesses and industries, while also having very specific experience in running companies, in the financing of a company and most importantly in the marketing and sales of a company. Experienced Consultants have experience with companies in all stages of Growth: Existence, Survival, Success, Take-off and Maturity. The business consultant may also have a specialty as a Business Turnaround Consultant, helping struggling companies to turnaround and succeed again. In other words, a good Business Consultant has broad and narrow stroke experience and typically, 20 years or more of accumulated business experience. Having an MBA from a good business school isn’t enough. The Business Consultant must have solid real world experience with many types of companies in order to be an effective consultant.
Exactly What Does a Business Consultant Do?
First and foremost, a Business Consultant gets to know and understand your business. As the business owner, you know more about your business than anyone else. For this reason, a good business consultant will take the time to learn from you, your department heads and key employees what the ins and outs of your business entails. It is only until a complete understanding of your business that a Business Consultant can begin to help you.
Identifies Problems and Opportunities
Deciding to startup your own company is an exciting time. It can also become a headache if you don't have the experience needed to tackle all that needs to be done. The initial decision to start a business sets off a chain of events and lists of things to do in order to get the business off the ground. If you aren't sure what needs to be done, maybe you should hire a consultant to help.
A business consultant is a person who specializes in a particular field or area and offers advice to clients in various ways. For instance, a business consultant experienced in running a sporting goods store would have a wealth of information for a person who is planning to open a retail shop. From the startup process all the way through basic record keeping procedures, the sporting goods store business expert will be able to consul the new retail business owner and guide them along the way.
In order to be a good business consultant, a person needs to have the experience and expertise for a specific type of business. If you have run a service-type business for several years, it does not necessarily mean you will make a good consultant for a retail business. Being experienced and skilled in the specific industry of the business is best.
Finding a good consultant can seem like an overwhelming task on its own, but there are many avenues to explore. Being able to find a business consultant that can assist you and guide you through the startup process is well worth the effort. Begin your search by asking other business owners with whom you are friendly. If you do not know any, start with the local phone directory or online. Search for business consultants or business advisors and create a list of companies to contact.
Visit the websites of all the business-consulting firms you have listed. Do they seem to have a professional image?
Companies benefit immensely from corporate restructuring. They restructure with a view to improve the present state of affairs. They review all the systems, process and policies of the company then they make necessary modifications so the company functions more efficiently.
Corporate restructuring is all about drastically altering the company's interval environment and hierarchies. Through this process, the management may consolidate the company's debts. Management also may decide to sell off the company's redundant assets.
Corporate restructuring almost always increases shareholders' value.
Concentrating on the Pluses
With corporate restructuring, management can dramatically and radically change the face of the business. Many times, corporate restructuring involves merger with another company in the same line of trade. Both the companies have pluses and minuses in their styles of functioning. Corporate restructuring sees to it that the strengths of the two companies get accentuated and that they curb weaknesses. When the functioning improves, the new company will likely make more profits than the two companies merge. Shareholders' value in the company increases.
Shareholders' Decision
Many times, shareholders force management to consider restructuring the business. When the value of their investment in the company constantly depletes, the shareholders put across this proposal. Periodically, management apprises the shareholders of the state of the company's affairs, its growth and expansion plans. The shareholders learn the company's market share. They are able to comprehend if the competitors are eating into their market share. The shareholders then decide and force the management into correcting the present state of affairs.
Communicating to Stakeholders
How do I build a business team for my small business? How do I assemble a business team when I can’t afford them? Are you interested in building your own business team from scratch? Do you want to know what it takes to build a strong business management team? Well, if you are interested in finding an answer to any of the questions asked above; then please read on as I share with you the pros and cons of building a business management team from scratch.
1.Outline your personal objectives
The first step to building a business team is to outline your own personal objectives but I prefer to this your primary aim. Every entrepreneur must have a primary aim in order to succeed in business; without a primary aim, you have nothing worth dying for.
Now what has your primary aim of building a business got to do with a business management team? While I have no direct answer to that question, I want to point out that the main reason why entrepreneurs build business to use that business as a leverage to achieve their primary aim. That primary aim may be freedom, self actualization or anything.
Now it’s the duty of your business team to work towards the growth of your business, which will in turn fulfill your primary. So directly or indirectly, your business team has a role to play in the actualization of your primary aim and if they are not going to help you achieve that aim; then they are not worth being a team.
2.Outline your business objectives
After outlining your personal objectives, the next you will need to outline are your business objectives. You need this because it will help determine who is worth being on your business team. When assessing your proposed business management team members; you must make sure that their various skills will add to the bottom line and help the business achieve its objectives.
If a proposed member possesses a skill that doesn’t add to your bottom line; then bypass him/her no matter how skillful that person may be.
3.Identify your strength and weaknesses
A business is an ongoing activity that doesn't run itself. As the manager you will have to set goals, determine how to reach those goals and make all the necessary decisions. You will have to purchase or make your product, price it, advertise it and sell it. You will have to keep records, and determine costs. You will have to control inventory, make the right buying decisions and keep costs down. You will have to hire, train and motivate employees now or as you grow.
Small Business Management - Setting Goals
Good business management is the key to success and good management starts with setting goals. Set goals for yourself for the accomplishment of the many tasks necessary in starting and managing your business successfully. Be specific. Write down the goals in measurable terms of performance. Break major goals down into sub-goals, showing what you expect to achieve in the next two to three months, the next six months, the next year, and the next five years. Beside each goal and sub-goal place a specific date showing when it is to be achieved.
Plan the action you must take to attain the goals. While the effort required to reach each sub-goal should be great enough to challenge you, it should not be so great or unreasonable as to discourage you. Do not plan to reach too many goals all at one time. Establish priorities.
Plan in advance how to measure results so you can know exactly how well you are doing. This is what is meant by "measurable" goals. If you can't keep score as you go along you are likely to lose motivation. Re-work your plan of action to allow for obstacles which may stand in your way. Try to foresee obstacles and plan ways to avert or minimize them. This also pays off in the long run, as positive impact through management reduces need for PR management firms.
Business Management - Buying
Do you want to learn how to write a business plan for small business? Are you in the process of starting a business or raising capital but don’t know how to write a business plan that can attract investors? Then this article is for you.
I was motivated to write this article because I realized that telling you how to develop a small business plan is just not the same as showing you exactly what needs to be included in one. I hope you know that building a business without a business plan is like flying a plane without your radar.In this article, I will be providing you with a quick nine step small business plan outline that can serve as a guide to writing a simple business plan that attracts investors. If you are ready to learn, let’s get started.
1.The executive summary
The executive summary is what introduces your business to the reader and probably is the most important section for lending institutions. If you can’t convince an investor in the first two or three pages that you have got a good business proposal for them to listen; then just forget about trying to raise capital because your business plan is never going to produce any tangible result. The executive summary is also important as a communication tool to employees as well as any potential customers who need to understand your goals and ideas.
2.A small section on company start up
This section of your business plan is where you have to clearly explain the thought behind the company’s creation and how you or your business associate came up with the idea to start your business. In this section of your business plan, you are expected to explain in detail the business idea, research result, location analysis, organizational structure, corporate structure and so on. You are also expected to explain the business type, industry and Business phase.
3.Your company goal
You will have to use this section to explain in a few paragraphs, what your short and long-term goals for the company are. How fast do you think it will grow? Who will be your primary customers? Also to be included in this section is your company’s vision and business Mission statement. This is very vital and must not be ignored.
4.Biographies of management
Do You Seek Business Success?
How is your business doing these days? If you say that it’s not doing too well, you aren’t alone. This downturn has affected us one way or another, but mostly in the pocketbook. I thought to share this interesting article on what to do about a struggling or failing business. Are there productive ways to deal with such a financial albatross?
Here are a few tips for trying to get it back on track.
1. Understand the influence of the economy.
You may have a business that’s done really well in the past, but it may no longer be the case these days. Before you beat yourself over how your business is doing, take into account how your business may be affected by current economic cycles. Think about some positive financial strategies you can employ during this down economy. If you have a way of weathering the next few years, you may emerge better and stronger when the economy recovers. Having an emergency fund — possibly in a high yield savings account during a time like this will help tide you over.
2. Check out the competition.
Maybe there’s been some changes in the marketplace. Take a look at your competitors and see what they’ve been up to. During a downturn, the competition usually gets tighter, as businesses go after a smaller pool of customers. Maybe you’ll need to do something to reinvent yourself or keep up with the new market environment.
3. Peg down your business model.
When the markets change, there’s a need for an entrepreneur to go with the flow and learn how to evolve his or her business. Taking a little risk to see if something works better may be worth a try, especially when business is slow. Though it’s a lot of work,
There are many ways to guide a business through a period of expansion.
Turning a small business into a big one is never easy. The statistics are grim. Research suggests that only one-tenth of 1 percent of companies will ever reach $250 million in annual revenue. An even more microscopic group, just 0.036 percent, will reach $1 billion in annual sales.
In other words, most businesses start small and stay there.
But if that's not good enough for you—or if you recognize that staying small doesn't necessarily guarantee your business's survival— there are examples of companies out there that have successfully made the transition from start-up to small business to fully-thriving large business.
That's the premise behind the search Keith McFarland, an entrepreneur and former Inc. 500 CEO, undertook in writing his book, The Breakthrough Company. "There has always been lots of books out there on how to run a big company," says McFarland, who now runs his own consulting business, McFarland Partners based in Salt Lake City. "But I couldn't find one about how to maintain fast-growth over the long-term. So I studied the companies who had done it to learn their lessons."
What follows are some of the lessons McFarland learned from his study of the breakthrough companies and how they can help you create a growth strategy of your own.
Developing a Growth Strategy: Intensive Growth
Part of getting from A to B, then, is to put together a growth strategy that, McFarland says, "brings you the most results from the least amount of risk and effort." Growth strategies resemble a kind of ladder, where lower-level rungs present less risk but maybe less quick-growth impact. The bottom line for small businesses, especially start-ups, is to focus on those strategies that are at the lowest rungs of the ladder and then gradually move your way up as needed. As you go about developing your growth strategy, you should first consider the lower rungs of what are known as Intensive Growth Strategies. Each new rung brings more opportunities for fast growth, but also more risk.
They are:
Restructuring your business is a huge responsibility. Not only do you have the livelihoods of your employees in your hands, you also have the future of your business. They key is to take an objective look at your aims and goals over the long-term, and not be caught up in office politics, favouritism, or sympathy for those who work for you. It sounds harsh but it's the right way to get your business back on track.
Firstly, you need to think about the different roles within the company. Which roles are necessary and which are superfluous? Sometimes jobs get created and after a while they're simply not needed any more. Sometimes an external circumstance means your business starts to lack a particular aspect - if all your customers have been asking for a certain service, why don't you offer it yet? The restructuring allows you to get rid of roles that don't perform well, and to create roles that would drive the business in a great new direction.
The second thing to do is to outline a job description for each of your roles. Include the duties that the employee would have to carry out, who they would liase with as part of their role - for example, will they work closely with people in another department or will they manage staff, or will they report to management? These job descriptions will help you see how your company will operate and give you a chance to see if there are any roles you've missed out. For example, is one particular job description too long and complex? Perhaps this would be better as two roles, or perhaps you should create a secretary's position so that several staff have some help with their admin.
Now you're in a position to take a look at your existing staff. Which of them have both the skills and relevant seniority to fulfill the new roles? Create a pool of potential candidates for each role. If some roles are direct swaps that's great but it could be the case that some people will have to take on different responsibilities. Talk to managers and find out which people would be best suited to the job.
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Today’s post is on practical tips to being successful as a new consultant. A former manager once said to me, “do well in your first project, and you can write your own ticket for the next few years.”
To that end, here’s a tactical list for getting off to a fast start
on a new project. Follow the 11 steps below and you’ll be a management
maven in no time:
1. Set up Google Alerts for your client and its competitors
This is an absolute must. Google Alerts feed you the latest online
information (collected primarily from news sites and blogs) related to keywords that you specify.
Setup these alerts for your client and its top 3 competitors.
This will help you stay current on client and industry developments,
which will come in handy through the project. Many people are too
pre-occupied to do this regularly, and it’s a quick win for new consultants to add value.
2. Know basic financial data for your client
I can’t tell you the number of times basic questions like “What’s
Client X’s total annual revenue?” have come up in internal discussions.
You want to be the one that can provide an accurate answer, as
opposed to “Oh, I think it’s something like $10-20 billion…let me
check.”
Some key numbers include:
-Market cap
-Overall revenue
-Gross profit
-Margins (profit and operating)
Memorizing them doesn’t take long. It will come in handy.
3. Familiarize yourself with the client CEO and senior management
There are many stories of newbie consultants having a casual
conversation with an employee in the company cafeteria, only to realize a
week later that it was an Executive VP. Don’t let this happen to you.
You can find most executive profiles on the client website.
Read them thoroughly and become familiar with the faces. Not only will
it prevent foul-ups like the above, it will also help you understand and
manage client relationships.
4. Familiarize yourself with the competitors
This shouldn’t take more than a few hours. Simply have a grasp on the following:
-Who are the top 5-10 competitors
-Relative sizes (eg, number of employees, overall revenues)
-Key products/services (especially what differentiates each competitor from the client)
-General grasp of their strengths and weaknesses
Good ways to get a quick handle on this include:
-Internal firm research reports (if available)
-Analyst reports (eg, JP Morgan, Credit Suisse, etc)
-Yahoo! Finance
-Hoover’s
Periodically review this information to make sure you’re fresh. While it’s important to know this info, it’s even more important that you don’t confuse one competitor with another.
When there was still a frontier, Americans were pioneers. In the 21st
century, they need to be “visionaries” -- especially when it comes to growing and maintaining successful businesses.
What do I mean by "visioneering?" It is nothing less than the embrace of constant change.
The change needs to be accepted and capitalized on because it is happening.
The recession made it painfully apparent that the Internet,
smartphones and other new technologies are causing huge disruptions. The
economy has changed, the world has changed and with these changes
business has also changed dramatically.
The only question is whether you are going to change too in order to capitalize on it, or be left behind.
You may be a natural when it comes to adapting to chaos and change.
But even those who are not can still thrive by consciously changing
their daily thinking and planning to stay one step ahead.
Here are some strategies to get you started:
1. If you need to, consider a debt workout. It can
be a game-changer. To be sure, defaulting and the likely ensuing
foreclosure, concluding in total loss, is a recipe for chaos. But chaos
is the name of the game. Sometimes you need to clear out the old
vegetation before you can grow anew. Removing the debt from the business
and reducing the personal guaranties to affordable losses can allow you
to operate the business at given revenue, giving you the freedom to
make necessary changes to succeed.
2. Track, monitor, control. How can you change if
you don’t know what’s going on with your business? You must diligently
track, monitor and control how your business performs and with this
information make rapid and appropriate adjustments to enhance
profitability. Key indicators to follow include profitability by the job
or product, costs, overhead ratio and payroll ratios. Follow these
measurements and then manage by the numbers.
3. Make change part of your business model. Constant
reinvention is the way to win, because stability and predictability are
no longer a reality. You should honor your core mission and be who you
are. But you also have to adjust with the times. This comes from
frequently reconsidering and questioning your business strategy,
experimenting and stepping outside what you “normally” do. Specialize,
find your niche, provide amazing service, be the best, the most, the
go-to business. It is no longer gross revenue; it is net profit that we
pursue.
4. March to the beat of a different drummer. There
are all kinds of routes to consider: importing instead of manufacturing,
adding services, focusing on a niche, emphasizing a competitive
advantage, expanding horizontally or vertically, allowing employees to
telecommute from home. The possibilities are infinite. The idea is to
determine what works and does not on a daily basis and then make the
adjustments required to stay profitable. Lead or get out of the way.
5. Get your marketing online. If you haven’t done it
already, Internet marketing is a big change to consider as you reinvent
your business. The Internet has already changed the world, so it’s time
for it to change your business too. Options to consider include: a
beefed-up website and online sales operation, search-engine
optimization, blogging, deal-of-the-day services such as Groupon and
LivingSocial, Facebook and Twitter. The Internet can help a small
micro-business compete with the largest international business. Budget
no longer controls the outcome, but neither does price alone. But
perceived value and niche marketing will win, developed and enhanced
with the community support that social networking provides. This can
best be accomplished via the Internet.
Adapting to change is not a new challenge. American entrepreneurs in
the past found ways to reinvent their businesses amid mind-boggling
changes: the settling of the frontier, railroads, steel, antibiotics,
electricity, automobiles, telephones and airplanes.
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