Date Posted: 11/13/2012 8:53:05 AM
Posted By: moff J Membership Level: Silver Total Points: 485
Many businesses, especially the small and medium enterprises (SMEs), normally start as very promising business ventures but they get extinguished with time leaving the entrepreneur discouraged and heartbroken. One of the major causes of business failure is poor management in the running of the business. However, managing a business is not rocket science and everyone can actually manage a small business enterprise successfully. This a simple guide on what needs to be done to run a business successfully.• An accounting system- this could be in the form of a simple record keeping system, double entry book system, to the more complicated accounting software. The main objective of an accounting system is to control the activities of the business and to provide checks and balances which will enable the owner determine the profitability of the business and ascertain that the assets owned by the business are being used optimally.The bottom line here is that as a business owner you ensure that you keep a record of all the activities in your business. This will enable you to account for every shilling spent or earned by the business.• Avoid operating in debts- a business that carries out its transactions on credit is exposed to a lot of risks because in case the business is unable to pay the creditors they will not hesitate to liquidate the business so as to recover their debts. A business should only use debts that it can effectively sustain, or if it is able to avoid debts all together, then that is the best case scenario.• Only lend customers who have an established record of creditworthiness- as a matter of fact, it has been shown that many start up businesses fail because of lending too much to non-creditworthy customers. When such customers default in settling their debts, the business is left in financial distress due to diminishing returns. The survival of the business therefore becomes very unlikely in such a scenario. You should even make your relatives and friends understand that your business does not recognize your relation or friendship. Hence, they should pay for the commodities just like any other customer. • Treat your customers well- this makes them satisfied and will always come back to you and also tell their friends about how satisfied they were with your service or product. This develops customer loyalty and ensures that the business is able to sustain itself.• The employees that you have should also be qualified. On top of that, let them know of the need to serve customers well and to always safeguard the assets of the business. There are businesses which fail because of untrustworthy employees who embezzle the business’ resources. Your employees should therefore have dignity and be honest so as not to steal from the business.
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