How To Manage Your Own Business

PART 1

Managing Your Own Business

Introduction

Running a Business is a creative, flexible and challenging way to securing one future. Itb is about creating a life, and making a living.

It takes courage, determination and foresight to decide and become an entrepreneur.

Getting started as an entrepreneur involves leaving the relatively safe certainty of the corporate world, where pay checks arrive regularly at the end of the month, and venturing into the uncertainty world of business.

The reality of the Nigerian economy today has shown that the private sectoer has a role to play as the engine of economic development because government alone cannot create the desired economic environment.

The sector that is set to revolutionalise the economy is the Micro, Small and Medium Enterprises

Initial Steps or Decision

In setting up a new business, the entrepreneur has to make several decisions and take certain initial steps, these include the following:

·        Identification of business opportunities or ideas

·        Selecting an opportunity

·        Preparing a business plan

·        Gathering resources

·        Selecting the legal form of the business

·        Obtaining licenses, permits and approvals from the relevant government agencies

·        Launching your business

Identification of business opportunities or ideas

The starting point of the establishment of a new business is an idea of a product or service which can be used to satisfy identified needs of individuals, families, or organizations.

Such a product or service must offer a viable solution to a problem experienced by potential consumers for whichn they are willing to pay.

It is only if potential consumers can see the benefits of the product or service and are willing to pay a price satisfactory to the entrepreneur  that we can say that a business opportunity exists.

The factors to consider in screening business opportunities are:

·        The skills you will need for successful operation of the business

·        Relevant experience

·        Personal interest and preferred life-style of the entrepreneur

·        Support of the family

·        Capital

·        The desired level of income

·        Risk tolerance

Choosing Name For Your Business

To be useful to the business, it should be easy to pronounce, easy to remember, reflect the nature of the business and should be unique.

But thye name you call your business has legal implications. If you choose a name, such a name must be registered with the Corporate Affair Commission.

Selecting the legal form of the Business

In Nigeria, all business enterprises must be registered with the CAC ( Registrar of Companies). Business activities in Nigeria may be undertaken as:

1.     Sole proprietorship

2.     Partnership

3.     Liability Company

4.     Public Corporation

5.     Cooperatives

6.     Joint venture        

Business failure in Nigeria

A number of reason have been advanced to explain the causes of business failures. Most factors of  business failure have been identified from both external and internal perspectives. 

External factors

1.     Poor Macroeconomic Environment

2.     Inconsistency in Government industrial policies

3.     Lack of infrastructural facilities

Internal factors

1.     Lack of proper planning

2.     Poor management practices

3.     Poor Customer Services

4.     Insufficient Marketing Strategy

5.     Owner/Manager’s attitude towards the Enterprise

6.     Excessive Expenditure

7.     Owner neglect of business

8.     Lack of business knowledge

9.     Excessive salaries

110. Obsolete products or services

Common Problems of small businesses are:

·        Getting established in the first or two years, finding and keeping customers, developing products or services.

·        Consolidation in the next period- finding and keeping competent staff, delegation, controlling the business.

·        Problems of expansion in the next phase-attracting investors, competing with much bigger firms in their markets

·        They have few employees and managers, skills are limited and expertise scarce.

·        Money is always a problem, but their managers also have few skills to make the best use of what exists;

·        A small management team usually the partners in  the business with highly specialized skills which is often also learning the main problems of the business as it goes and therefore always experiences time pressures.

·        A fairly  narrow defined geographic and industry sector

·        Premises that are not totally suitable for the particular business

·        Inappropriate use of information for decision making by management, managers relying on historic information, which is often based on externally prepared annual accounts that may be at least one year out of date.

Creating A Winning Business Plan

Without a plan, it is easy to get side tracked by things that seem to be important but have little to do with achieving your original dream.

·        Planning identifies areas of the business that are not completely under control but which need urgent action before a realistic approach can be made to outside investors.

·        Planning is an important source of information about a company’s prospects for funding trading organizations, such as banks and other finance houses.