Strategy – Probably The Most Overused And Misunderstood Word In Business

How many times have you heard someone talk about successful business strategies or ‘taking a strategic approach’? What do you think they actually mean by the use of the word strategy? Most often the people using it are trying to convey the fact that they have given the subject a bit more thought than usual, that they have looked a little further ahead than normal. If a consultant uses it be very wary. Strategy costs more than mere ideas or tactics. How much would you pay for consultants who have’ kicked around a few ideas’ or ‘come up with some tactics they think might work’. Depends how good they are. But if they come back with ‘strategic business advice’ you expect it to be very good and of course very expensive.

Why expensive? Because you would hope that a consultant or colleague would have used some kind of intellectually robust framework, that they would have tested their assumptions and developed more than one solution which they evaluate rigorously before making their strategic recommendation. This takes time and expertise and both are expensive. Let’s assume they have done all of this – does that make it strategic business advice rather than tactical advice?

Not according the dictionary. The dictionary definition of strategy is very clear and military. It defines strategy as “the art of war – disposing troops etc in such a way as to impose upon the enemy the conditions for fighting (time and place) preferred by oneself”. If we accept business is in effect a war – you develop successful business strategies because you define success as beating the competition – there is no reason why this definition of the overused word, strategy, is not appropriate for business strategy. It requires all that planning and testing of assumptions discussed already. Some kind of robust intellectual and very honest framework will certainly help to develop and evaluate options. Even the lazy use of the word strategy – giving it a bit more thought and thinking ahead – would be implied by the military, dictionary definition. But there is an extra dimension to real strategy. It requires you to do all this and come up with something that changes the rules in your favour – in other words it requires creativity.

And there is one other aspect to this more demanding kind of strategic thinking. It is about people and their behaviour. In order to ‘deploy the troops’ and change the rules you have to understand how people tick. If being creative involves changing behaviours then you have understand how those behaviours were formed in the first place and how they might be changed if you want a successful business strategy.

Before putting the dictionary away (the definition of strategy above was taken from the Oxford English Dictionary) just go forward to tactics. You will discover that the definition is exactly the same as for strategy with one addition. Tactics involves the all-important stage of implementation, putting the strategy into practice. So it turns out that far from tactics being less weighty and valuable than strategy they are actually the most valuable thing of all. A sound strategic plan that is successfully implemented includes, indeed demands, tactics.

The use, and overuse, of strategy in business is more often than not pretentious over-claim by people who do not really understand what they are talking about. It certainly does not mean giving something a bit more thought or thinking a bit more long term. It absolutely demands a thorough and honest assessment of your assumptions and your options. At the risk of being melodramatic, sloppy thinking in military strategy costs people their lives. In business it just wastes time and money. Strategic thinkers will of course use frameworks based on their experience. They will break a problem down so they can think about each component of it but they will look to change the rules not just apply them. And the true strategist understands that strategies are aimed at people and changing their behaviour. Their strategic business advice will be based on an understanding of human behaviour. Just as in war, a strategy does not just get the job done, it enables you to beat the competition, to deliver higher returns than ever before, to win and win big for the least expenditure of resources.

So whether you are undertaking a brand planning strategy, a new business launch strategy or any other kind of strategy remember what this really means and remember to include the tactics which are just if not more important. Then you can charge accordingly.

How to Properly Manage Your Business

Proper management is the key to make your business thrive. Here’s what you need to do:

1. Inventory and supply. Make sure that you have enough supply to meet the demands of your target market. Do inventories at least twice a month and stock as many items as possible. People are most likely to visit your store if they see that you’ve got wide range of products to offer.

2. Store appearance. You would want to impress your potential buyers the moment they enter your shop. Make sure that it looks visually appealing at all times. You may want to redecorate every once in a while or do renovations at least every 2 years.

3. Employees. Here’s the truth; your employees are the keys to grow your business. Make sure that you keep these people happy to motivate them to do better at work.

4. Marketing campaign. This is something that you cannot put on the back seat especially if you want to boost your sales and revenue ASAP. Promote product awareness by advertising on your local TV networks, radio networks, and on your local newspapers. You can also resort to advertising gimmicks like offering freebies and discounts to easily capture the attention of your prospects.

5. Take good care of your clients. As they are the backbone of your business, you need to make sure that you impress them all throughout. Aside from giving them high quality products and great value for their money, you must also build relationship and connection with them so they’ll remain loyal to you.

Deadly Principles Of Business Planning. You Must Know These

Whether you are running, or planning to run, an offline or online business the traditional basics of achieving business success apply. For instance, it is well-known that a business that has no plan is almost certain to fail. No matter how small a business is, it needs a plan. A business plan compels you to think before you act. It compels you to find out about your business area before you start; i.e. to research your business area or to establish its groundwork.

A business plan forces you to think hard about your competition and how you are going to beat them in the market. It forces you to establish whether your business idea is worth pursuing. Why start a business that is going to fail? Isn’t that stupid?

A business plan forces you to establish the expected costs and revenues of your business, and hence to determine profitability. Why run a business when, at any time, you cannot tell whether or not the business is succeeding? If you don’t know your costs or your revenues you cannot compare them together to tell whether your business is succeeding or failing.

An online business is no different from an offline business, when it comes to business planning. It needs a business plan! Yet, how many newcomers do we see trying to make it online without even understanding the concept of business planning? Is it then a surprise that too many fail?

This article discusses 12 fundamental principles that you must understand and use in your business planning if you are going to run a successful business. The principles are as follows…

1. The Requirements Principle

A business plan must comply with the requirements of funding bodies. This is particularly key when you are applying for funding, but is also necessary when you are not applying because the compliance act itself makes the business plan rigorous. Funding bodies always have requirements that a plan must meet, and some of these are: technological innovation, presence of technical risk, and presence of commercial potential.

2. The Objectives Principle

A business plan must have clearly defined objectives and it must accomplish those objectives. A business plan is a strategic business document, and fundamental to any strategic planning process is the need to have objectives which the formulated strategies must aim to accomplish.

3. The Motivation Principle

A business plan must have clear motivations which highlight its importance. The motivations of a business plan are the reasons for completing the plan. These reasons tell us why the plan is important.

4. The Background Principle

A business plan must be the work of someone with a relevant background (the founder, for a start-up business), and the plan must comply with its authors background. A business plan should be prepared by the person or team who is going to run the business. For a start-up business, this is critical because the planning process prepares the owner for running the business. If the planning is delegated to someone else then it is unlikely that the owner will understand the plan sufficiently to be able to implement it. In these circumstances, the owner abandons the plan and does his or her own thing with deleterious consequences for the business.

5. The Detail Principle

A business plan must be sufficiently detailed to inspire confident action when executing the business; yet it must be flexible. A detailed plan is easier to implement than a superficial plan. A detailed plan suggests that the plan has been thoroughly researched and thought over. Detail inspires confidence in the owner of the business (assuming that he or she prepared the plan). A detailed plan should be flexible to accommodate changing times.

6. The Conservatism Principle

A business plan must be conservative. This means that it must always underestimate revenues while overestimating expenses. The reasons for this are underpinned by risk. A business is always executed under uncertainty… we never have all the knowledge we would like to make business success certain. An immediate consequence of this is the tendency to underestimate cost, only to find that we run out of money at critical times of a business’s execution. We also have a natural propensity to overestimate revenues… to dream!

7. The Cash Balance Principle

A business plan must always have a positive cash balance. A negative cash balance means that you plan to run out of money… to be insolvent! If you cannot realistically get the cash balance positive, without padding figures, then this is a sign that the business idea is not worth pursuing.

8. The Insolvency Principle

A business plan must guarantee against insolvency… against running out of cash. There are four ways to do this: conservative estimates so that the business always outperforms its plans, detailed cost identification to minimise omitted costs, contingency planning to accommodate forgotten items, and a positive cash balance throughout the plan.

9. The Risk Management Principle

A business plan must manage risks by convincingly dealing with uncertainty, reducing it to as close to zero as possible. This is simply stating that a business plan must be thoroughly researched, including desk research and field research. The more thoroughly a plan is researched the more it rests on sound facts, knowledge, and understanding, and the less the uncertainty and risk associated with the plan.

10. The Evidence Principle

A business plan must rest on supporting evidence, and guess work must be minimised. Sound evidence increases the reliability of a business plan and reduces the risk associated with it. And the less risky a plan is the more likely it will guide a business to success.

11. The Rigour Principle

A business plan must be rigorous complete, correct, and reliable. This means that the plan must be derived from a systematic process that attends to all the issues that must be addressed. In particular, the plan must not be rushed. The issues must be sequenced and dealt with, each at the right time.

12. The Collaboration Principle

A business plan must be founded on collaboration (not confrontation) it must satisfy the collaboration principle. This means that a business plan must be based on the works of others. It must not be opinionated. It also means that a collaborative, rather than a confrontational spirit, must exist in any business planning team if the results of that team are to be worthwhile.

Final Remarks

This article has discussed 12 killer principles of business planning that any plan must satisfy if it is to be taken seriously. Five of such principles are: requirements principle, objectives principle, motivation principle, background principle, and detail principle. These principles are a must for anyone running an offline or online business. If your business is failing it is more than likely that your failure to comply with one or more of these principles is to blame.

Reduce Costs And Get Smooth Business Processes With Sap Integration On Your Devices

By SAP, we mean Systems Applications and Products in Data Processing. Designing and development of this platform was done during 1970s as standards based software alternative to custom built ERP software, SAP has grown a long way since. SAP has taken the forefront of ERP business software ever since. ERP product development can be possible through SAP and can be used by companies to manage their enterprise. This can include managing their day to day operations, finance, logistics, quarter end, month end, annual activities, HR, reporting etc. Although, there may be certain ERP vendors who would do the same, the key difference for SAP lies in the way that is easier to use and at the same time it gets sophisticated for including all activities that are necessary for proper management of a business enterprise.

In almost all industries, youll find that SAP ERP is expert to customize and accomplish both mid scaled and large business software needs. Entrepreneurs need SAP integration software for meeting the requirements of their company. The departmental and operational classifications structurally remain designed by SAP. These can include SAP ERP Logistics, SAP ERP human resource management, and SAP ERP Logistics.

You must make sure that enterprise application software modules that are needed for SAP implementation are supplied from same vendor. Additionally to this, your firm should install the expert system. Users are facilitated for integration of different modules. These features can be obtained through SAP implementation methodology that can surely provide simple treatment to business website on the internet. Having an experienced, professional, and intellectual SAP consultant, mid-scaled businesses can simply opt for SAP ERP systems heavy grade integration for grasping simple customization features.

SAP implementation, more importantly, is helpful for data processing to simplifying business management, process automation solutions and other processes. SAP stands for System Applications and Products providing management process. Different individual modules can be available that you must purchase.

SAP Sharepoint is another collaboration tool for Microsoft that links and empowers business owners with its integrated set of features.

You get better search abilities and can easily enable users to deliver quick response for changing business needs by making data driven decisions and deploying customized solutions.

It can lower maintenance and training costs and does increase productivity.

This statement really reflect its real capabilities.

Managing content becomes easy with information lifecycle.

Large enterprises got increased complexity over the time often resulting in fragile and inflexible systems. Retaining business agility in a world of mobile internet, SaaS, API, enterprise service integration can be crucial. Businesses get higher which enables better decisions with accurate information when needed.

Business process management platform is viable enterprise technology in the current demanding marketplace. You look in for many factors in business process management to make sure that you get the right solutions for your business.

Businesses operate 24×7 online with the help of portable internet devices. So, SAP mobile application lets you easily handle many tasks that help your business. SAP integration has been proved great for data processing to simplify business solutions, management and other enterprise processes.

Riding Your Motorcycle Home On A Business Tax Saving

You will be happy to know that the treatment of your motorbike, within your business affairs, for tax purposes is much more favourable than your motor counterparts and whilst owning a company car is an expensive business, owning a company motorcycle isnt. Javeed Baig of Gower Accountants in Leicester explains why.

Assuming you are VAT registered, you can claim upto 100% of the VAT paid on the purchase of your beloved bike. This is on the basis that you use the motorcycle only for business purposes. With a car, no matter how much you use it for business you cannot reclaim the VAT.

Motorcycle Tax Benefits

Having purchased your motorcycle, you can claim a deduction against tax for the full purchase price in your year of purchase using part of your Annual Investment Allowance of 50,000. A car typically would attract an annual writing down allowance of only 20% per year. In corporation tax terms, for the small business, this represents a saving of 21%.

Assuming the VAT reclaim and the corporation tax relief thats a whopping 36% off the purchase price of your motorbike. So you could choose to take the saving, or maybe trade up and get that mean machine that you have always promised yourself.

As with a car it is unlikely that you will use your motorcycle only for business and therefore a private use element will occur. Take the assumption that 75% is used for business and 25% is used privately. This 25% is the benefit you have derived from using a company asset and as a result a Benefit in Kind charge will arise on both the company and on you as an individual. How this benefit is calculated is where the magic lies and its where motorcycles ownership thrives and company cars dive.

The basic differences are as follows:

MotorbikeCar
Base ValueMarket Value or Purchase PriceList Price When New
% for Cash ValueFixed 20%Between 10% & 35%
Fuel BenefitFixed 20% of UsageBase 14,400 fixed

Heres an example of the potential tax benefits:
Motorcycle costs 8,000. 25% private & 75% business.
Cash Value of benefit in kind : 1,600
Reduction Due to Business Usage : 1,200
Taxable Benefit : 400
400 represents your cash value of the benefit from using the company bike. If you are a basic rate taxpayer you will pay 80. The company will pay a further 51.20 National Insurance on this.

The equivalent tax position regarding a company car is as follows:
Car Cost 8,000 List price 16,000. Some private use assumed. CO2 = 20%
Cash Value of benefit in Kind : 3,200
Reduction due to Business Usage : N/A
Taxable Benefit : 3,200
Tax At Basic Rate : 640 Company Charge : 410

Moving back to motorcycles you can see the savings on purchase would far exceed the annual cost of owning your bike through a company.

Additional Tax Benefits

In addition all safety equipment, insurance and fuel can all be paid for by the company with the Benefit in kind calculated in much the same way.

The article has been written for information purposes only and does not constitute formal advice. The rates are those prevailing at the time of writing and are subject to change.