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How To Effectively Manage Your Business (Infographic)

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How To Effectively Manage Your Business (Infographic)

How To Effectively Manage Your Business (Infographic)

The business management involves the management of all the tasks that arise in a business, from strategic planning through technological innovations, through financial management, implementation, and monitoring of results and evaluation of the performance of activities. Most important, however, is to understand that efficient and effective management is critical to any business, whether microenterprises or large economic groups.

Organize The Financial

There are those who think that financial management is a concern that should be left only when problems begin to appear. Quite the opposite! Caring for a company's financial organization involves managing revenue and expenses every day, precisely to avoid difficulties. But how to do this?

Well, the first step is to organize the cash flow, recording in it all the inputs and outputs planned for a certain period. The ideal is to use this document as a kind of plan and put the values ​​there for 2 or 3 months, so, besides being able to keep up with the day to day business, it is still possible to know how the situation of the company will be in the next period. To make this projection of the cash flow, you can use a spreadsheet or, what is more, a management system.

Once you get that clarity about the company's cashier, you can start with other topics that involve financial, such as pricing the products or services, negotiating with suppliers and paying bills. Each company will define its priorities and needs and, from there, develop the work.

Imagine that you noticed, by following the cash flow, that the amount paid to a particular supplier is very high relative to the amounts received by the goods that involve the raw material supplied by it. With this information in hand, you can take some action to reverse the picture, such as reviewing the price of the product, negotiating with the supplier for a lower value or, if necessary, switching suppliers.

Do Not Forget The Business Budget

In addition to focusing on the needs of the company, there is a point within the organization of finances that can not be left behind at all: the Business Budget.

For it is through him that the entrepreneur will plan and estimate the gains, expenses, and investments that a business will have in the coming periods. Typically, companies usually make their budget for 1 year, but it can be thought out and planned for up to 2 or 3 years.

To facilitate this stage of your financial organization, we invite you to take a look at our Practical Guide to Business Budgeting, a step-by-step guide to implementing Financial Planning and Budget Monitoring in your company.

Establish performance indicators for efficient management

The performance indicators also have their level of importance as business management tools, especially to help measure the performance of an enterprise. With them, it is possible to measure any activity that generates numbers or values ​​for the business, from the volume of accesses to the site to the number of products in stock, to the amount collected from the sales and the number of employees who were dismissed and hired.

But above all, it is necessary to establish which are the most important performance indicators for efficient business management. That's where the Key Performance Indicator (KPI) comes in, or key performance indicator. This is by far the best way to measure the outcome of a company, as it does this through its most relevant indicators and ignores those that do not directly impact the organization's results.

Therefore, we must not forget that an indicator must be represented by an index (number or percentage) that shows the progress or result of a process. In short, it must be quantifiable. It is worth remembering that there are several types of KPIs that provide a lot of information, but here we will highlight the main ones and use the example of a car assembler to show how they should be:

Capacity indicator: is the relation between the quantity that can be produced and the time for this to occur. In the example of a car assembler, we can say that 100 cars are produced in 1 day.

Indicator of productivity: it is related to how much a worker produces for a certain period (production x time). Following our example, it means that a worker can mount 10 windshields in 1 hour.

Quality indicator: is the relation between total production and products without defects or nonconformities. Every 100 cars produced we have 97 fully adequate, an index of 97% quality.

Profitability indicator: is the percentage ratio between profit and total sales. The automaker sold R $ 10 million and realized a profit of R $ 2 million. Therefore, profitability is 20%.

Indicator of profitability: is the percentage ratio between profit and the resources used in the production of a good. If R $ 40 million were used and the profit was R $ 2 million, profitability was 5%.

Indicator of competitiveness: it is related to how much your company presents itself to the market in a better way than the competition. Let's say that your automaker and the competitor have launched a new popular car, but you managed to deliver a model with more benefits, but at the same price. It means that for consumers, your product is more competitive.

Indicator of effectiveness: it is the union of effectiveness with efficiency. It means that you should produce a car in the best possible way, using the least amount of resources, but achieving the expected results. It would be like producing the same 100 cars, but now with an investment of $ 35 million, getting as profit the $ 2 million of the goal.

It is clear that other indicators can be added, everything will depend on the need for knowledge of managers and administrators. What is essential is to understand that the indices found through the indicators give an overview of the current situation and that through their analysis it is possible to outline a strategy to solve the problems encountered or to improve even more the performance of the manufacturing unit.
How To Effectively Manage Your Business

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