Slide 1LMT•SOM
Thorough Business Model
Finance
Most entrepreneurs go into business with inadequate capital hoping to secure more capital once business begins to grow.
But face capital challenges a few months after operation.
When capital challenges are not addressed in time most businesses fall flat on their face.
Entrepreneurs must do necessary research before starting a business to avoid facing capital challenges before the first year of operation.
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Preparing conservative cash in flow and liberal cash outflow projections
Developing funding proposals or applications to be written and/or presented for loans/equity
Meeting Venture capitalists or Angel investors
Debt or Equity
Sticking to a budget.
Starting small and letting a business grow at its own pace also ensures that the capital generated from doing business can adequately cover all operational expenses and future expansion plans.
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Permissions & Policies
Entrepreneurs confront with mazes of ambiguity when they try to navigate the corridors of:
Permissions
people
Policies
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Cash flow and financial management
May need to pass up promising opportunities if pursuing them would mean starving your core business of essential funding.
Every element of working capital should be carefully controlled to maximise your free cash flow.
Effective credit management and tight control of overdue debts are essential.
You may also want to consider raising financing against trade debts.
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The implementation stage is real make-or-break point of an entrepreneurial venture.
A wide variety of skills needed at implementation stage, that no one person can have the skills to manage all the functions well.
One way to look at this implementation stage is to look at how many different skills are involved in operating a business.
The real talent is for entrepreneurs to recognize what they do well and then find employees or subcontractors who can fill the gaps.
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Discussion groups
Educational resources
Professional associations
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Inventory Management
Good stock control and effective supplier management tend to become increasingly important as businesses grow.
Holdings of obsolete stock may become a problem.
Work with suppliers to reduce delivery cycles, or switch to suppliers and systems that can handle just-in-time delivery.
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Lack of Marketing
Keeping up with the market: Dynamic Market Research not as a one-off activity at time of launch.
The more you succeed, the more competitors notice - and react to - what you are doing.
Apparently loyal customers can be quick to find alternative suppliers who provide a better deal.
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Understanding where your products are in their lifecycles can help you work out how to maximise overall profitability.
At the same time, you need to invest in innovation to build a stream of new, profitable products to market.
Identifying the key drivers of growth
Carry out extra research as well to test customer reaction to a new product.
Marketing vis-a-vis Sales
Published information can provide useful insights into market conditions and trends.
Build up an in-depth picture of what customers want, how they behave and which of your marketing approaches work best.
Taking the time to talk to key customers pays off.
Suppliers and other business partners can be important sources of market information.
Encourage your employees to share what they know about customers and the market.
Effective IT systems can help to share and analyse key information such as customers' purchasing behaviour and preferences.
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Human Resources:
vis-a-vis
Need to revisit and update your business plan regularly.
Strategy needs to evolve to suit your changed circumstances.
Watch out for being too opportunistic – ask whether new ideas suit your strengths & overall vision of where the business is going
Focus might need change from winning new customers to building profitable relationships and maximising growth with existing customers as they often have greater potential for profit and can also provide reliable cash flow.
Newer relationships may increase turnover, but the profit margins may be lower, which may not be sustainable.
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vis-a-vis
Ignoring problems complicates the process further.
In other words you need to take care of things today instead of putting them off until tomorrow
So if you feel the need to dump something. Don’t wait – Do it today!
If you are thinking about cleaning out your fridge after the weekend. DO IT RIGHT NOW!
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Poor organization
Leads to lack of focus
They can’t be able to create goals for their business.
Lack of focus also eliminates innovation as an entrepreneur doesn’t brainstorm with staff to come up with better ways of doing business.
LACK OF FOCUS IS COUNTER-PRODUCTIVE IN EVERY SENSE OF THE WORD. SUCCESSFUL BUSINESS KNOW WHAT ORGANIZED IS AND NEVER LOSE FOCUS!
An entrepreneur needs to write down business goals and deadlines for meeting the goals to ensure that focus is generated. Well written goals eliminate procrastination which is among the most common organizational challenges facing entrepreneurs. It is common to find that many entrepreneurs have numerous exciting things that they should accomplish for their business however they fail to take the actual step of doing these things because of factors such as procrastination. It is possible to stop procrastination by focusing on the goals of a business. This way an entrepreneur concentrates on the excitement of getting his business to the next level other than the boredom of actually doing it.
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Lunch meeting with key resources
E-mail management: Logging on for fixed one hour in morning and evening
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Implementation people
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Skills that you would like to develop in yourself in this Trimester: Develop an Action Plan
Skill
Effort to be made
Planning
Decision-making
Leadership
Team-spirit