The Sunday Mail
Arguably the question above is asked by many business owners whose ventures are in danger of failing.
With hard economic times affecting everyone’s budget, companies in a number of different sectors sometimes have difficulty meeting financial goals. When that happens, small problems can snowball into larger ones. If those problems aren’t addressed as quickly as possible, then that means trouble for the business.
There are certain questions one has to ask themselves when analysing their business: Why are we failing? How is the company spending money? How is the performance of the team? Are we marketing the business enough? What is our market share and are we targeting the right market? How can we penetrate new markets? Is our product or service good enough? Are we adding value to the consumer? Are we up to date with the international trend? Why did we make a loss? Is my business adequately financed?
To answer the above questions, a thorough financial analysis is required on the business. Unnecessary costs can be cut through this process and the company will surely save money. This process involves analysing if your company is getting the best deals on materials and services being provided from suppliers. Thorough analysis of the company’s spending habits should be looked into. For a doctor to know what you are suffering from, he or she needs to do tests and examine you. Same applies with a business. Before you think of any strategies, first of all identify where the sickness is.
Team effort is also critical. It is vital to measure one’s performance based on tangible results one brings. Companies are in business to make money and there is no point keeping someone who does not bring value into the company. Companies should set up realistic targets and key performance indicators for their employees and weekly or monthly performance appraisals should be done. If your company does not review the performance of employees regularly, then I would arguably say the HR section is weak. How far have you gone in terms of targeting your customers? Analyse your business and choose the most effective way of marketing your company. Be it in the newspapers, on billboards, internet, on radio and TV, fliers or on modes of transport. Your target market needs to know of your existence and how they can benefit from what you offer. You also need to assess your competitors and do a market research to determine your market share. There is a reason why Coca Cola still markets its product despite their success over the years.
It is good to assess the need of your product or service to the consumer. There is a rapid change in the market we live in today and a good business leader need to be on the watch all the time to determine what the best in their industry is doing. Always strive to be better than the best in the market. To give an example, if you are in baking industry and still use machinery which was manufactured in 1984, do not expect to compete and make money. If your company is making money right now, my advice is utilise the opportunity and keep improving your business to cope with the international market. Adequate financing is very crucial for proper operations in a business. If your company requires, say, US$1 million dollars to fully utilise operations and you only have US$200 000 and decide to go ahead with the project with inadequate funding, I would say that is already a route to a failed project.
If a company’s performance deteriorates from the previous year’s performance, that should be a cause for concern. In our Zimbabwean market, some companies are now comfortable with losses and point fingers blaming the economy? Is it really the economy or it is bad management? How come some companies are making profits in the same economy?
Nothing beats a good product and a good service. If you dissatisfy your customers, they will simply go for a better product. Heads should roll if a company’s performance drops by even 1 percent.
Good business relationships are also vital. Nothing beats a good attitude and good business ethics and conduct. If your attitude and character is bad, people would not want to work with you and you can simply loose good business because of that.
Taurai Changwa is an articled accountant in Zimbabwe and ACCA finalist. He is managing director of SAFIC Consultancy and can be reached at [email protected]
