Fundamentals of business include proper planning, setting up objectives, promoting customer relationship, promoting supplier relationship, dealing with competition and use of accounting.
Knowing all these aspects could greatly facilitate the flow of the business. Managing these aspects well or quality management would spell the difference between success and failure in business. It is also important to know the legal aspects affecting the business and the need to adhere to business ethics.
An entrepreneur needs to know the business fundamentals so it can manage the business well. Fundamentals of business include proper planning, setting up objectives, promoting customer relationship, promoting supplier relationship, dealing with competition and proper use of accounting.
Having a plan and setting up objectives before embarking on a business or during business is essential because it would be hard to provide a direction with which the business will follow without vision.
Customer relationship is very essential to the business. How well you relate to the customers could translate to profits in the income statement. Choosing the target market also falls under this. The target market must reflect the style, image and price point of the product you are selling.
Supplier relationship is important because without suppliers securing raw materials to create the finish product would be impossible. It is always good to establish good rapport with supplier as this would greatly facilitate the production process.
Competition is one of the threats to business. It is important to size up the competition to be able to make your products competitive in the market. Allocating proper resources and taking the time are important requirements to remain competitive.
Accounting is fundamental to business because it enables you to determine how the entrepreneurship fares. Proper accounting methods enable one to have solid basis in making sound management decisions and adopt necessary changes.
Simple financial statements include the following
Balance sheet - this reflects the value of the business. In the balance sheet we find assets, liabilities and the capital invested. The simple equation for balance sheet is Assets = Liabilities + Capital.
Income statement - is also known as the statement of profit and loss. It reflects the financial status of the company whether it is incurring profits or losses. In the income statement sales is deducted with cost of sales to get net income before other income. Other income such as bank interests is then added to get the net income before tax.
Statement of Retained Earnings - this explains the changes in the company's retained earnings for the period. It reflects the profits or losses incurred, dividends paid and the amount retained for future use.
Getting into business is not only a full-time job it is also long-term. Commitment from entrepreneur is critical to the success of the endeavor. Looking at the situation on a long-term basis would enable the company to overcome initial disappointments and the hassles in business. Operating costs involved early on may seem unjustifiable compared to the sales but it pays dividends in the long run.
Commitment is necessary to be able to continue in the face of obvious impediments. Quality management of an entrepreneurship is a method used to make sure that the activities pertaining to design, improve and apply a product or service performs efficiently. The primary role of quality management is to always aim for the quality improvement of the product, service or enterprise.
There are four key methods to do this that could, at the same time, assess the progress of quality improvements. These are:
Plan - create or improve an aspect of the business process for better results
Do - apply the plan and monitor its results
Check - evaluate the measurements used and provide reports on the outcome to the management.
Act - make decisions required to enhance the method.
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