Part
Seven - Management
Its
pretty tough being a business owner in today's environment.
You can no longer survive at being very good at one particular
area, like sales. Now you need to be good at or at least
have a good understanding of, buying, stock control, pricing,
marketing, human resources, debt collection and cashflow
management. There are so many now - I am sure you are
reeling off a few more I haven't even mentioned.
But
management is even more than this and it is from a bank
perspective that I am writing.
The
banks believe the management is the business and will
look at management integrity, skill and performance in
deciding to back any particular business. The banks want
to see experience. Minimal or no experience is a major
deterrent for getting the bank to support a business.
This is because inexperienced management is likely to
repeat the mistakes that others have learned from and
thus put the bank's lending at risk.
Part
of the attraction the banks have with Franchises is the
very fact that the franchisee is buying into a proven
system, experience and "know how" that will
enable him/her to avoid the pitfalls those others in their
industry have fallen into. In fact the franchisor generally
has everything in place to enable management to successfully
run the business.
Yet
another important aspect of management is vision setting,
forward planning or call it what you will. Management
should have a vision of where they want the business (and
themselves) to be a month out, a year out, five years
out, and a long-term vision. This may even include getting
out themselves.
Once
management has settled on a vision (and the one month
goal could be as simple as survival) they need to put
in place an action plan. This does not need to be elaborate
as it should be a simple plan of how they are going to
get to the goal and what they need to do to make it achievable.
