Ask SCORE: New Year's resolutions for businesses
New Year's resolutions for businesses
A series of ideas for success in 2011
By Richard Walton, Assistant District Director, SCORE, W. Maryland
The idea of resolutions for the new year gives us an opportunity to focus on making changes in both our personal and business lives. The list below is our way of looking at some key areas in business and suggesting that we stop doing what isn't productive and start doing what is productive of improved outcomes.
SEE CHART ABOVE
The areas of concentration are based upon the most significant functions in business operations.
Finance, of course, is as usual first on the list, primarily because without an understanding of costs and whether the firm's individual products are profitable, one cannot plan effectively for total business profitability. It is even more important to have this data available when seeking credit from lenders, trade suppliers, or any other funding agency. Even in today's tight credit economy, funds can be obtained, but only if the business is truly viable and will be able to pay back its loan. Pay back is based upon profitability, and that is what we need to be able to demonstrate and maintain.
The second area in which resolutions are important is Marketing, but not by focusing on products alone. We need a new focus on customers and their needs. We find it through the use of Customer Relationship Management (CRM) which enables the firm to focus on what customers want and need, and then develop product offerings to meet those needs. All too often our focus in the past has been on products, and trying to find customers who need them. The real focus should be on customers, and then finding (or building) products that meet their needs.
The third area is Production. Some managers may claim that the inevitable trend of costs is upward, but evidence from progressive organizations shows that the reality of a well organized firm is to reduce operating costs through constant attention to productivity and quality improvement. This should occur in all areas of firm operations, not just in the final the final product. A focus on process, rather than product alone, can help in accomplishing this. Everything we do in a business is a process, and anything we do can be improved. This year is the year of improvement.
Innovation is our last area for resolutions. Innovation is not just for large firms or new businesses. It is for every firm, all the time, on a continuous basis. And it should focus on process improvement also (see third area above, Production). And it should involve managerial processes. All too often we are focused on managing the present. The real innovations will come from adapting successfully to the future, and creating innovations that meet future needs. But we can't see the future if we are working only in the present. Another way of saying this is that working in the business (the present) is different from working on the business (the future).
Whatever is going to happen will happen in the future, so we had better be there in our thinking and actions.
SCORE can help local businesses both in the startup and going concern phases to meet these challenges. Make a New Year's Resolution to work smarter by contacting SCORE.
Mr. Walton teaches Entrepreneurship and Quality Management at Frostburg State University. He is also Assistant District Director for SCORE, Western Maryland, and the President of ERMACORP, a Hagerstown based Management Consulting Firm. He may be reached at 301-462-9850, or by email to Richard@ermacorp.com.