HOW TO MANAGE A BUSINESS
Management is the skillful use and coordinartion of all the business's resources
Money
Facilities
Equipment
Technologies
Materials
Employees
Management functions
Planning
Ongoing process of setting goals, deciding when and how accomplish them
Types
Strategic plan
Long term goal. 3-5 years in the future. About what needs to be done and the general way in which it will be accomplished
Tactical plan
Specifics major steps for carrying out the strategic plan. It can cover a period of less than a year and includes target dates for acomplishing goals
Operational plan
Details the everyday activities that will achive goals of the tactical plan
Organizing
Ongoing process of arranging and coordinating resources and tasks to achive specific goals. It puts people and other resources of a business in the right places to maximece production
Directing
Ongoing process of leading, influence and motivating employees so they will work together to achive specific goals
Types
Athoritarian
When a leader tells what needs to be done and how to do it without seeking for advice
Democratic
When the leader seeks input from the employees about the task but taking the final decisions
Delegating
When the leader gives complete freedom to the employees to achive the task
Controlling
Ongoing process of setting performance standards, mesuring actual performance, comparing it to the standards and taking corrective action if actual performance does not meet the standards
Cash flow, credit and expenses
Managing expenses
It is a 2 step process that involves
Knowledge
A manager must be knowledgeable about the expenses the business incurs
Action
Once a manager knows the extent of existing expenses, he or she can act to reduce future expenses
Credit
It is the granting of stended time to pay off a debt. To buy on credit means buying now, paying later.
Types
Trade credit
When one business gives to other an extended payment time for purchased goods or services
Consumer credit
When a business gives consumer extended payment time for purchased goods and services
Cash flow
The cash that is coming into a business must be sufficient to cover the cash that is flowing out
Cash budgect
Record of which a business owner forecast incoming and outcoming in a period of time
Three-step process
1-List and total any expected incoming cash payments over the next month
2-List and total expected outgoing cash payments for the next month
3-Sustract expected cash outflows from expected cash inflows
Improving cash flow
Take advantage of trade credit offered by other businesses
Collect payments from customers as soon as posible
Offer discounts to the customers who pay in cash
Don not allow customers to buy on credit is they have overdue nills
Be insistent on collecting overdue payments
Do not tie up cash in excess inventory
Make sure inventory is not lost, damaged or stolen
Reduce cash paid out on salaries and wages