Key points of running a business

Key points of running a business

There is no martingale for a company to be successful. And even if this is there, it is the consequence of a particular situation, rarely renewable and which may not be permanent. The elements listed below are only leads, generally considered to be positive.

Serenity in corporate governance

A company that is created and wants to develop must make initial choices that will impact the conditions of its existence and its development:

  • its legal status and corporate purpose;
  • his name, his logo and its registered office;
  • the terms and conditions for changes in shareholdingswhich can be linked to the status (e.g. partnership limited by shares) or at the option of the founders (approval or not of new shareholders, for example);
  • its privileged partners such as its advisers, its chartered accountant, its auditor, etc.

Of course, shareholder (or even stock market) battles can make a company grow, but in general they are neither without risk nor without damage.

And being (well) supported also promotes the company’s resistance to the vagaries of the economic situation.

Competitive positioning

Two related concepts are fundamental to ensure the profitability (and therefore the sustainability) of the company:

Of course, offering a good product/service is essential, but it still has to be offered at a price that is accepted by the market, that is competitive and that allows the company to cover its costs.

And then the danger is to remain static. Know how to adapt to a change in the market or regulations, being on permanent watch, training your staff, innovating to always remain competitive is essential (and avoid continuing to manufacture slide rules in the age of electronic calculators).

Also pay attention to the associated services: after-sales, spare parts, customer service, etc.

To verify this good competitive position, the easiest way is to listen to customers, particularly via their complaints, but also via the sales network or, if necessary, via satisfaction surveys.

Very careful cash management

Managing the company’s working capital and cash flow requirements covers the most frequent risk of the company’s disappearance. This goes through :

  • an action on stocks, making it possible to limit fixed costs;
  • action on suppliers, to obtain optimum payment terms and more generally more attractive offers (price, delivery times, quality, etc.);
  • an action on customers, to collect the proceeds of sales as quickly as possible.

These actions make it possible in particular to limit bank charges (agios, etc.).

Good relations with its partners

A company cannot live in autarky. It has suppliers, customers, regulators, partners…

Of course, the addiction vis-à-vis one (or a limited number) of customers and/or suppliers is to avoid. And the financial situation of customers and suppliers should be monitored regularly.

But the establishment of real partnerships with customers (especially in BtoB) and especially suppliers, but also other entities (which can be very varied: public bodies, schools, etc.) is often the key to detecting trends, taking advantage of progress, etc.

And of course the relationship of trust with his accountant and/or its auditor makes it possible to optimize the resources devoted to accounting, financial and tax management and to deal with crisis situations more quickly and more effectively.

Adapted financial management

To be able to grow or simply resist, a company must constantly invest in different areas such as research, (quality) equipment, employees (recruitment, training, etc.).

To make these investments successful, resources corresponding must be available. To be sure, the prerequisite is to have a realistic and relevant forecast vision of your situation. This requires in particular knowledge of its expenses, its sales, its profitability, etc.

To make appropriate decisions, the company develops dashboards, simple or complex depending on its size, organization and means.. Cost accounting and management control are the tools that make it possible to measure and analyze the activity of the company as well as its financing capacities. If it does not have in-house skills, the company relies on its chartered accountant to have these dashboards, these key indicators, etc. which must be analyzed very regularly (frequency to be adapted to the size and type of company and up to a daily examination for large companies). In particular, avoid postponing decisions that must be taken quickly, particularly in the event of a crisis (emergency plan, request for assistance, etc.).

Finally, the strategic plan (3 or 5 years) underpins and ensures the consistency of these investments.

Structured organization

As the company grows, its organization is structured around functions that the creators assumed at the beginning, including:

  • strategy ;
  • marketing;
  • commercial ;
  • finance, management and accounting;
  • information system ;
  • human ressources ;

And she gets methods work, project management, decision-making… without losing flexibility and responsiveness. Having agile methods and processes is not dispensing with them.

At the same time, in addition to its production tools, it uses (in forms to be adjusted according to its situation such as purchase, rental, subcontracting, etc.) more comprehensive management tools, for example to measure its quality production or to manage its cash flow.

The company does not necessarily always have the means to carry out everything internally; it may be in its interest to seek external advice, to have others carry out tasks that do not constitute its core business, etc. balance between buying and doing is to be found.

Careful communication

Communication is an important vector of the notoriety of the company. It can start with a good location for a business, for example. But, in all its forms, it allowsattract customers, employees… Its consistency with the image and actions of the company must be respected. Among the mediums:

  • Internet and, in particular, social networks – it is no longer “reasonable” not to be present there;
  • direct marketing – avoid it being felt as too aggressive, consumers getting tired of phone calls from distant platforms and flyers thrown in their mailboxes;
  • press with its various channels;
  • events or information reserved for a few customers or partners.

To ensure maximum impact at the lowest cost, the objective is to be defined : the targets, the message, the calendar…

Internal communication also plays an important role in team mobilization and cohesion.

Effective team

The success of a company is primarily the result of the men (and women) who make it up.

This requires an ability to attract and recruit the best, without having the corollary of wage inflation (and therefore company costs):

  • rigorous recruitmentwhich is an investment, with a long process…
  • the company’s image (example: its position in terms of social and environmental responsibility) and its business, the additional benefits, the corporate culture (supported by internal communication) are good levers;
  • personal development prospectsincluding training and the degrees of freedom left to creativity are also appreciated criteria.

Then Human Resource Management is one of the elements allowing the coherence of the teams, the motivation of each one. Among the topics to be covered:

  • the mode of operation: a “silo” structure does not promote exchanges, but a matrix organization dilutes responsibilities. Each company has its own dosage to ensure internal cohesion, effective teamwork, etc.
  • mobility and promotion: the time is no longer for advancement based on seniority. To guarantee the maintenance of everyone’s motivation and the use of skills, individualized management proves to be the most effective, relying on training;
  • the social climate: the material conditions, the level of digitization of the professions, the quality of life at work, with in particular the fight against discrimination or the framework of teleworking, are not to be neglected.

The Human Resource Management is not an exact science. Even if methods (sometimes, alas, subject to fads) help leaders, it is impossible to foresee everything, especially in a changing societal and legal (social law) environment. But it is not possible not to devote one’s attention to it (while weighing the advantages and disadvantages of solutions such as outsourcing, subcontracting, etc.).

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