Overcome these three stumbling blocks: your business would progress well

Firms are in business to make money and more of it too. Also it needs to survive and do well in terms of growth and profitability. In doing so firm faces three stumbling blocks. Business strategy must adequately provide safeguards to jump over these hurdles:

1. Not focusing on core business

In every business there is an area known as core business. A tobacco company has core business in the form of cultivating, processing and making cigars or cigarettes or tobacco for pipes. When such a company sees there is opportunity for inter-cropping tobacco with other vegetation well and good and it is good business strategy to go ahead. What happens is after sometime the other vegetation demands more time, resources and management attention. It is a classic Pareto Rule. Twenty per cent of the production takes eighty per cent of the management time. Finally, the core tobacco cultivation suffers resulting in business downswing.

2. Relationship is in shambles

Most cases business fails because it did not handle the human relation within the business properly or customer relationship outside the business properly or both. Today there is immense value placed on the relationship angle. A good

Relationship model should cover the stakeholder concept. Business stakeholders include: owners/directors, staff, customers, creditors, government, and society at large.

Business strategy paper must demand that the owners/directors conform to standards and ethics and give proper directions to staff and make human resource pool happy and contended. Satisfied staff performs duties well, resulting in: Retention of customer loyalty; Retention of human resource pool; Improvement in profitability & growth of company; contribution of taxes and revenue to government; involvement of the society at large. When this does not happen the relationship is in shambles and the business retards.

3. Cash-flow is dethroned

There is no doubt cash-flow is the one that keeps everybody going: owners, staff, creditors and debtors, government and society. Constant monitoring and progress chasing keeps the cash-flow intact and is enthroned as part of business strategy. It is like oiling a machine to be in good state of repair. If you do not oil, the machine breaks down one day. Cash-flow monitoring must be a continuous activity. Production can take a short-break in between shifts; sales can take a holiday. No interruption in Cash-flow, never. Business suffers because it dethrones the cash-flow and allows it to trickle and dries out finally.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist