BASIC BUSINESS RULES

BASIC BUSINESS RULES.

In every endeavour there is what is fundamentals or basic rules which forms the foundation and you always need to have a good grip on the fundamentals to be successful. However sophisticated you become in your knowledge of business, you must not forget the basics.
Basic Rule One:
Your product or service must be what people want, need and are willing to pay for. As simple as is sounds, it is very important. One of the basic weaknesses that we have in our society is the fact that our economy is disoriented. We make money without really creating product and services. But things are fast changing. We have to align our mind with the fact that people have needs. This country has about 150 million people and all of them have basic needs that they meet everyday whether they are rich or poor. They spend money everyday and we have to begin to create product and services that will meet their needs but please let those things you have to offer be what people want, need, and are willing to pay for. Products and services that are not ideally suited to the market will die a natural death. You cannot to sell just what you like. You have to sell what people like or want. There are loads of businesses that have failed because their owners were not sensitive to the peculiar needs of their environment. The fact that someone is selling something and doing well in business does not mean it will work well for you, because the needs of the people where you are may not be exactly the needs of the people where that person is. So, we need the ability to recognize people’s needs. There is a disease that I call “People Blindness” and if that disease strikes you, you can’t do well in business. To do well in business, you have to know people. You have to understand people and how they think. The interesting thing sometimes is that what people really need, they do not think they need it. And when you want to sell what people do not think they need, you may have a tough time selling. So, the product and market must be ideal for the environment. Remember, you don’t catch a fish on your own terms. If you want to catch a fish, you don’t put the food you like on the fishing hook and put it in the river; you put the food the fish likes.
Basic Rule Two:
Everybody in your organization must focus on sales, marketing and income generation. That is why you are in business. If you are not selling, you are not in business. Nothing happens until you sell. Business is not about renting a shop or getting a beautifully furnished office space it is more than that; business is selling. Until you make your first sale, you are not yet in business. A wealthy man gave his grandson some money to start a business. The young man rented an office in the choicest part of town, a top class business district. He furnished the office and hired staff. Three months down the line, when his grandfather asked him how business was doing, he told him that although they had a good office space and staff, they had no customers yet. The old Man looked at him and said, “Son, you don’t need an office, you need an office, you need customers”. That gave the young man a complete paradigm shift. You need customers. I am not saying that you do not need an office, sometimes you really need an office to start, but it is not every business that needs an office to start up. However, you certainly need customers to start up. Without customers and without selling, you are not in business. Every business owner needs to find a way to communicate that to everybody in the organization. Every staff has to be interested in the bottom line which is sales. Is the turn over increasing? Every body in the organization should be a marketer. Every opportunity to market the organization’s vision and ideas must be effectively utilized irrespective of department. In fact, I will advise, that you focus your best and most talented staff on sales and marketing. And as you begin to sell, you need to be sensitive to the products that are most profitable. Focus your best hands on your most profitable products and go for the best results.
Basic Rule Three:
You must maintain a strong sense of purpose and vision. Vision is the key to motivation and for vision to motivate; it has to be focused on people. To want to become the biggest in town is not a compelling vision because it is focused on your wanting to succeed. Vision must be focused on the customers. Within your organization, you must maintain a strong sense of vision and purpose and ensure that there is synergy. What each department is doing must contribute to the overall purpose and vision of the organization. It is your responsibility as the top man or woman to ensure there is synergy. What each unit does should not be an end itself. Also, keep the morale high. Then, ensure that you locate each of your in their area of strength.
Basic Rule Four:
Maintain Strong Internal Control Systems. I would suggest areas that are critical for you to monitor. The first, being Cost Control. You must have a handle on your company’s finances. If you do not any accounting background, buy a book that deals with the subject from a non- professional’s perspective. You have to be able to understand figures because you will be in serious debt before you realize it if you are not able to interpret figures. There is always more to it than what you read on papers. What most people call profit is not profit. If you buy an item for two hundred naira and sell it for four hundred naira, don’t conclude that your profit if two hundred naira; it is not. Your profit is less than that because cost such as transportation, electricity bill, rent, staff salary and others have not been factored in.
The prevalent mentality in our society is that of the civil service culture. People are paid to spend money, but not to earn it. Infact, your not spending all the money allocated in a month is an indication that you are not efficient. When that is the prevailing mentality in a country, there is a problem. Your staff may develop the habit of writing requisitions without caring whether the company has the money or not. It is your business to manage your cash flow.
Inventory management is also critical to maintaining strong internal controls. If you are selling goods, you have to be able to define the point at which you must restock. When you find it difficult to meet the demands of your clients, it sends a subtle message that you are not serious about your business. You lose money and considering the fact that they have alternatives, you have an opportunity to keep customer.
The third critical factor in maintaining strong internal control is People dynamics. You will have observed that if you put inanimate objects together in the same room for ten years there will be no quarrels between them. However, if you put two people there, you can be sure that the atmosphere will change. If you allow negative negative emotions to run within your business, it will adversely affect your business. It is important that you manage how people relate with themselves in the office. Set up policies to control the people dynamics and establish rules for conflict resolution in your organization.
Basic Rule Five:
Your organization must never stop learning, improving and innovating. There are loads of businesses that have been grounded, that are being grounded and that will be grounded because of the violation of this basic rule. You must never stop thinking ahead. It must be your corporate culture to continually innovate because if somebody comes along with a better idea of how to do your business, then, he or she will take the market from you. The moment you feel that you have arrived, you have arrived. What works today may not work tomorrow. Human psychology thrives on new experiences and even your staff will lose their edge if you are stuck with the old routines. You have to be flexible in bringing about changes and forging new frontiers in your field. Be ready to experiment. Try new ideas and things. You cannot afford to have a rigid corporate structure at this stage. People are not sensitive to change, most especially when it is gradual. Understand that something is constantly changing about your business and about the taste of your customer. Build a learning organization.