I was asked by a small business owner yesterday about the management of finance in his business , and in particular cash.I explained to him that the finance management was not just about creating a set of management accounts and filing a year end report.
It seems rather insulting when speaking to a courageous business owner but the reality , as with many , he did not know what he did not know.
I explained that the main components of cash control were planning /forecasting ,spend control,margin analysis,working capital and debt management.
Seems rather obvious when one sets it out but only if one has experienced it , does it become obvious. This intrigues me because , having gone to countless courses and with a University education ,it is the day to day management of very practical things that actually is missed off the curriculum.
The reality is that many businesses fail because there is not a complete understanding throughout the business about what is actually happening on the ground in relation to financial impact.
We were able to help by looking at his own systems and allowing him to gaze through the looking glass to understand his business in a more definitive way.As an entrepreneur in a hurry, he was told "make haste slowly " and the business will prosper.Decisions based on data make for better business management.
Thursday 7 October 2010
Tuesday 5 October 2010
Does the Public sector have customers ?
In light of the recent pronouncements by George Osborne , it is really obvious that the Lib Dems are having an effect,not only on the Policy declarations but in the tone and the vocabulary being used to express Tory cabinet reasons for policy recommendations.
The outburst by a Tory minister about the pay of Public sector pay for Chief executives , flies in the face of previous Tory policies of treating all public sector departments like businesses , privatisation and reward for success.
I used to have arguments with a railway enthusiast who used to say that the railways need re-nationalised and there is no such thing as customers ,"people are passengers" he used to say.The punctuality and safety of railways has increased immeasurably under the private sector , but regulation does need to be used to keep the companies mindful of public interest.
The voices yesterday at the Tory Party conference had the same dilemma.Can you run Government funded services as businesses when the public has their say through the ballot box. Clearly so far the answer is no.
People could be forgiven for believing that the party in Government today is a centre right coalition party , almost in the same space as the now defunct New Labour. The issue is that , the way in which public money was used under the last Labour government , was spent as if it was their money.Ideology driven!!
The private sector, learned a long time ago that if you do not listen to your market the business does not prosper but it needs to be able to fund initiatives.
Accepting that dispensing government funds has a political prioritisation , public sector and the public at large need to understand that money is in short supply and even Governments have a credit rating.That requires cost effective management.
If the last 18 years has proven anything it is that ideology costs money , and we were virtually bankrupt.It is too easy just to attack big salaries in the Public sector.Let us find a different model that at least means our children do not have a perpetual debt legacy form badly run Public sector.
We have to remember that although the banks started the run on our National finances, we were already in a bad starting position to deal with it
The outburst by a Tory minister about the pay of Public sector pay for Chief executives , flies in the face of previous Tory policies of treating all public sector departments like businesses , privatisation and reward for success.
I used to have arguments with a railway enthusiast who used to say that the railways need re-nationalised and there is no such thing as customers ,"people are passengers" he used to say.The punctuality and safety of railways has increased immeasurably under the private sector , but regulation does need to be used to keep the companies mindful of public interest.
The voices yesterday at the Tory Party conference had the same dilemma.Can you run Government funded services as businesses when the public has their say through the ballot box. Clearly so far the answer is no.
People could be forgiven for believing that the party in Government today is a centre right coalition party , almost in the same space as the now defunct New Labour. The issue is that , the way in which public money was used under the last Labour government , was spent as if it was their money.Ideology driven!!
The private sector, learned a long time ago that if you do not listen to your market the business does not prosper but it needs to be able to fund initiatives.
Accepting that dispensing government funds has a political prioritisation , public sector and the public at large need to understand that money is in short supply and even Governments have a credit rating.That requires cost effective management.
If the last 18 years has proven anything it is that ideology costs money , and we were virtually bankrupt.It is too easy just to attack big salaries in the Public sector.Let us find a different model that at least means our children do not have a perpetual debt legacy form badly run Public sector.
We have to remember that although the banks started the run on our National finances, we were already in a bad starting position to deal with it
Monday 4 October 2010
Value of Leadership
I was reading in the McKinsey magazine about the attributes of good leadership and it made me reflect on the obligations I have had , over the years to run businesses and show leadership , often in trying circumstances.
If I had to summarise , I would say that the main objective was to get as many people as possible into the same space in which I was operating . Many academic studies have discussed the team bonding aspects , but I am speaking about the psychological impact of the fictitious plane crash.
The plane takes off and it is full of people from every walk of life , and assuming most people survive the accident on a desert island, the focus of a leader is to bond the various skills in a cohesive way.
In the workplace analogy, extreme events are rare thankfully , but it is important to recognise that business only survives or prospers by the collective efforts of the whole team.It is also true that not all participants see it as there role to join in , which causes the effort to be diminished to varying degrees.
Someone once said that if your business is doing well create a crisis. I am sure in the current business environment that is not required , but nevertheless everyone needs to be led with a common understanding and a common sense of purpose.The business boss has to create that environment
If I had to summarise , I would say that the main objective was to get as many people as possible into the same space in which I was operating . Many academic studies have discussed the team bonding aspects , but I am speaking about the psychological impact of the fictitious plane crash.
The plane takes off and it is full of people from every walk of life , and assuming most people survive the accident on a desert island, the focus of a leader is to bond the various skills in a cohesive way.
In the workplace analogy, extreme events are rare thankfully , but it is important to recognise that business only survives or prospers by the collective efforts of the whole team.It is also true that not all participants see it as there role to join in , which causes the effort to be diminished to varying degrees.
Someone once said that if your business is doing well create a crisis. I am sure in the current business environment that is not required , but nevertheless everyone needs to be led with a common understanding and a common sense of purpose.The business boss has to create that environment
Subscribe to:
Posts (Atom)