It is more than clear that you will have to apply professional management approaches in the starting company. You will ask: What if I have no experience in this regard? Then you will have to acquire it or hire a professional manager.
With the low degree of capitalization of profits in the initial period of company activity, you will not be able to afford a professional project manager, so you will still have to take care of yourself. Understand, you just can’t do without some things. They are mandatory for business.
Financial management is the foundation of your company’s success. The important thing, in this case, is to do two things: skillful financial planning and an adequate and effective accounting system. To do the first, you will need some financial knowledge and skills.
The financial plan, which is the main component of your company’s business plan for at least the first three years, cannot be drawn up easily, but with the help of someone else’s expertise and consulting help, you will be able to get better. As for the effective system for keeping company records and accounting, it is an indisputable fact that with the expansion of their business, everyone, sooner or later, seeks the help of specialists in the field of accounting.
The main accounting documents the balance sheet, the income statement, and the cash flow statement all require particularly precise management, monitoring, analysis, and control. Reference: Monitoring and Controlling in Project Management
Cash flow management
Due to the fact that the cash flows coming out of the company may exceed the flows entering its cash register, the entrepreneur-manager will have to have up-to-date information at all costs and to correctly assess the company’s cash balance. This can be done by monitoring the monthly cash flow, as well as the comparison with the projected cash flow in the company’s budget.
A comparison between what you thought you would have in the cash register for a certain period of time and what you actually have or do not have will allow you to assess your potential ability to cover some unexpected cash costs. In this way, you will also be able to detect problems with company asset management and value control.
Management of company assets
If you carefully monitor the balance sheet of the company, where the assets are reported, you will be able to determine the possible management of assets in the initial period of the company. You need to be especially careful to monitor and, of course, properly manage the inventories in your company.
It is very important that this is done in entrepreneurial companies engaged in production activities. Read this product management case study to see a real example of the management of organizational assets in action. From a pure accounting point of view, the entrepreneur will need to determine the value of his inventories, as well as how it will affect the price of goods sold. In addition, inventories must be very accurately accounted for and monitored.
From the cash flow statement, the entrepreneur can assess and control the amount of profit from the company’s activity. It will also be useful to calculate net profit in certain interim periods during the financial year. In this way, you will be able to create a basis for comparing this indicator.
By comparing the actual profit with the budget, you will be able to correctly assess the way to carry out the management. In this case, by comparing the standards you have developed with the actual results obtained, for example in terms of costs, you will be able to decide whether to reduce these costs or increase the selling prices of the products. In general, the entrepreneur must have a general idea of the financial condition of his company in order to avoid the possibility of bankruptcy.
Market analysis and marketing management
In the initial period of the company’s activity, the entrepreneur will have to carry out his market analyzes on the basis of the knowledge he has and the skills he has. The known data about the market are called secondary and at first, are sufficient for the implementation of market research for the needs of the company.
They contain more general information about market trends, the state of the industry, competition, as well as the demographic characteristics of the geographically defined market segment. Things are more complicated with market data, which needs to be collected further. These data are called primary and the company owner will have to hire a specialist to collect them.
The methodology for collecting data
The entrepreneur must determine the methodology for collecting this data and the methods for working with information sources. Once this data has been collected, market trends and market analyzes of the entrepreneurial company will need to be identified, and hence the most appropriate marketing management.
Very often we have heard remarks like: I don’t have time … or Eh, if only I had time! Time is proving to be a problem not only for entrepreneurs. Even for the ancient Greeks, the titan Cronus, representing time, was invincible. For all business people, time is short, but for entrepreneurs, it is not always enough. This is a limited resource for entrepreneurial activity, which can neither be borrowed, nor free time can be stored early from today to tomorrow, when it will not reach, or even be bought, at any price. Particularly scarce is the time in the initial period, when entrepreneurs have to do everything themselves. As one of my university professors used to say, 24 hours a day is 24 hours, even if you get up an hour early in the morning. However, the receiver must know that he does not have enough time in most cases due to inefficient use.
Lack of sufficient staff
The lack of sufficient staff in the initial period, the inefficient use of time, as well as the insufficient managerial skills sometimes make the life of a start-up entrepreneur a real nightmare. What is the way out of this difficult situation? Of course, the correct and effective time management, as well as the desire for this to be a constant priority for the match, to which the right time should be devoted.
Good and effective management alone is not enough to ensure the existence and growth of an entrepreneurial business. In addition, entrepreneurs must have experience and knowledge in terms of business strategy and tactics. For the different phases of the company developed the requirements for the management, strategy, and tactics are different. Let’s first see what are the stages of development of the entrepreneurial company.