While you may be selling a product that’s high in demand, or working with the best people in your industry – it doesn’t necessarily mean you’re a good business. Running a company requires constant self-maintainance, learning and growth to ensure it continues on the right path. Insolvency experts BWA state that all business failings occur through bad management. While different organisations may be unique, inner workings may be complicated and beaurocracy may be difficult to follow, management can always be simplified through carefully selected guidelines.
There are strict legal and moral obligations around the running of businesses and skimping out on these will have detrimental impacts on the state of the organisation. Because of this there are some very obvious arbitrary approaches to running companies. This allows businesses to be classed as good and bad, methods can be measured and it’s easy to know what good practices are.
While running a business is complicated in it’s entirety there are some very simple ways to improve your current situation. Things you can do that don’t require complete upheavals of exisiting protocol or behaviour. These are things that will easily improve the day to day running of your company.
Here are three simple steps to running a better company:
- Cashflow Is Not Profit
First things first: it’s important to understand that just because you have money, doesn’t mean it’s free to be spent. We’ve all heard the saying, you have to spend money to make money, and this is very true. It’s impossible to run a business without capital. Companies who spend all of their cash flow will never move forward with their business. Just because it’s their doesn’t mean you need to spend it.
- Always Minimize As Much Waste As Possible
This is obvious when it’s written out but its suprisingly common in business to have excessive waste and loss. It should always be a priority of operators to attempt to spot causes for wastage and take the necessary steps required to reduce this as much as possible. You’ll be surprised at how much extra you can save after taking the initiative to reduce loss.
- Treat Credit As Credit
If you borrow money, it’s not yours. You should only ever borrow what you have the means and intention of paying back. This is the number one reason companies get into trouble. While it is common to borrow in business it’s extremely important to pay it back on time and in full. Don’t try to cheat anybody in this process as it will only hurt your business in the long-run. The same goes for taxes, it’s a criminal offense to avoid these and you’ll only end up with more problems if you avoid your obligations.
