Principle of Business Development

Since the early of civilization,  human beings have known that business has an important role to reach wealth.  Business gives what individuals and society need.  Today, people learn business to get sustainable money. There is a lot of article and book about business, include my article about business development steps. So,  it’s not easy to recognize what matters from the business.

Studying business from business history gives insight into what’s important in business. History shows something that always exists in the development of a business.

The important thing in the business is efficiency and sharing benefits competitively. Efficiency allows entrepreneurs to get profit from the business transaction. It also helps entrepreneur offer a good price.

how to do business efficiently?

The way to run it is by specialization, the scale of production, and create more fit between customer problem and company solution. So continuous market research is important to create the best-fit offer. Business tells the offer in copywriting format or advertising in several media channel.

Specializing for efficiency

Since barter trading, people know that business needs efficiency. At that time efficiency is achieved by specializing in production. Specialization and focus in creating a product encourage people to produce products quickly, cheap and good. Because he has put his time and energy into a field, he will find a better, faster and cheaper way to compete in a market.

Because specialization is efficient, the state tends to specialize in its core business areas. The city also has its own specialization.  specializes, villages specialize. That specialization does not have to be a whole country or city only make one product, but there is a dominant product.

Adam  Smith developed the idea of specialization for this efficiency by offering a division of labor. When within the company, there is a division of labor, with a smooth production flow, then productivity will good and growth occurs.

For efficiency too, Ford advised workers to be obedient without thinking, so that the conflict between the management team and the workers is minimized.

With the division of labor, the employees will handle the tasks easily and quickly mastered the production process.

Today, specialization is not only in production house but also they produce for specific market. Therefore, they do segmentation and choose specific market segment.  By target for the specific market, the business can make attraction offer, because they program their products for the specific segment.  To match

Large production scale for efficiency

Creating large quantities of products will reduce production costs per product. In addition, producers can also press profit margins, in the hope if the goods sold a lot, total profits are also many.

The production cost of a product has fix cost and variable cost. Whatever quantity of product that we made, fixed cost does not change, not multiply. And the variable cost increases when quantity also increases.

Machinery for Mass Production

Consequently, after a business has an orientation to mass production, they need technology, machine, teamwork, and market that they buy.

Humans are constantly looking for ways to enlarge the scale of production, using animal power, heavy machinery, and computers, aiming to increase mass production.

Teamwork for Mass Production

To manage large machine and large market, they then need a team and manage them. Therefore, business needs leadership and management discipline.  Vision make the team more cohesive tea

 

Start Business Development Journey

This article covers business examination. It is first steps to business development journey.

To begin business development, we need to examine our business condition. No the development plan that fits all condition.  You already have the progress of business development, so you just fix the missing.

We start to examine:

  • your company profile
  • Segment market
  •  business model to serve your market and get profit
  • team support
  • marketing plan
  • management and
  • continues improvement.

Your Company Profile Today

  • What is your company name
  • Company Address
  • Company mission and mission
  • When your business start
  • Business type: Franchise  or you build your own
  • Business type:  retailer, producer, distributor?
  • Industry type
  • Market segment you serve
  • products and services that you offer
  • percentage of the end user and business customer
  • structure organization
  • the quantity of team company
  • Top 5 Important things in your business
  • your performance for your top 5 important things
  • Do you apply bookkeeping and accounting?
    • Your Profit Loss Financial Report in last 5 years
    • Your Balance Sheet in last 5 years
    • Cash flow statement
    • aged debtors listing
    • aged creditor listing
    • sales analysis
    • inventory
    • Others
  • How often you update your financial status? daily, weekly, monthly, yearly
  • Do you have the business plan or business model canvas

Your Private Goal in Your Business

  • Your job, status, and role in the business
  • Your
    salary: fixed salary and variable salary
  • Your non-financial benefit in the business
    • why you enjoy or like  your business
  • 3 thing most
    frustrated things in your business
  • Time spend in the business
    • time for production
    • Time for team building
    • Time for marketing
    • time for administration

Market and Products

  • Your Criteria to target customer segment
  • Who is the best customer? What are your criteria
  • customer segment that you target
  • products and services categories do you have
  • your competitor can and easy to imitate or not
  • your sales per categories products and products per annum
  • sales trend per categories products and products
  • do you regularly hear customer feedback about products, service
  • Why your customer buy  (reason)? eg, quality, service, function, price.
  • Why your prospect does not buy (reason)
  • What is your value proposition
  • Major customer disappoint about your business
  • The quantity of Total customer
  • Total customer retention
  • Total customer repeat
  • Do you have customer lifetime value
  • Average how many

Competitor

  • How many Competitor that your customer can access
  • How many businesses that offer replacement items
  • Comparison of your business and competitor in term turnover, brand, capital, cost, profit, skills, service etc.
  • Common competition basic in your industry
  • Your competitive advantage

Finance

  • Total income per annum
  • Total expenditure per annum
  • Gross Profit per annum
  • Fixed Cost per annum
  • Variable cost per annum
  • cash flow statement

Entry and Exit Barrier

  • startup capital
  • skill to run the business (production, marketing, management)
  • license to run business
  • Attractiveness and main advantage of business
  • Cost for exit barrier
  • Difficulty to enter an alternative business
  • Difficulty to get material, supplier  and qualified people

Team Empowerment

    • Customer Orientation level of team
    • Trust and service culture
    • Recruitment procedure and consideration
    • The main difficulty to recruit
    • Team Training
    • Training and orientation for new employees
    • regular training for old and new employees
    • Written and clear job description
    • Key Performance Indicator of team training
    • Main training problem
    • Performance target for each member or team
    • The main indicator of the performance of each member, division, and team.
    • How to measure their performance
    • satisfaction level of the team member for their job and remuneration (salary)
    • How business give remuneration
    • How often to review remuneration
    • The non-financial reward for good performance for the team member
    • Profit share scheme and incentive for a team
    • What is the area of team participation in management?  product development, market development, strategic management, finance management.
    • regular team meeting and team feedback channel