Small business. Small business The nature of the effect of various factors on business
Do not stay even for one day where there are not five persons: a rich man, a Vedas-learned brahmana, a king, a river and a doctor.
Comment:
Natural success comes when a person consciously or unconsciously fulfills the 5 laws of prosperity. Each of these laws can give a person the opportunity for easy progress, but by combining all the favorable factors together, phenomenal effectiveness can be obtained. So these are the principles.
1. Investments, start-up capital
The business should be based on existing money, skills, habits, experience, connections etc. A successful business must have a foundation of past work. And it’s extremely rare to meet people who have no experience or money to start with. Starting capabilities are usually balanced by many values. For example, one person may have money to start, while another may have little money but a lot of experience in a particular field.
Each business needs a special starting set of resources and experience. You should carefully analyze and think through exactly what resources will be needed to launch the project, so as not to be caught off guard by your own miscalculations. And in the process of prosperity, there must be a fund that will accumulate resources for future restructuring, expansion, partial or complete change of activity.
2. Training, development
The next factor of prosperity is developing skills, increasing income, training staff and your own education. Society has a greater interest in developing projects. If things don't improve for a long time, people lose interest. Development can be understood as a whole complex of events: making a statement in society, acquiring new skills and approaches to work, optimizing price/quality, improving the softness of the delivery of a product or service, and much, much more.
Learning and business growth, first of all, speaks of love for your business., and people always appreciate such a mood and for the sake of it they are ready to put up with many shortcomings. People know well that if there is enthusiasm and a desire to develop, then all mistakes and obstacles will soon be eliminated.
3. Hierarchy of subordination
Any business destined for large scale and success needs a clear administrative structure for the subordination of people. Such a structure is needed not for despotism and self-pride, but for an incentive for the development and safety of employees. When a person comes to this or that business, he most often feels unprotected and wants to occupy a place that is safe from mistakes. For such people there are low positions and strict subordination to elders. Respect and submission to elders gives a person the right to make mistakes with impunity and have a great deal of trust from management. This allows you to quickly gain work experience in a conditional game mode and, over time, take on a more responsible position.
Companies without a clear hierarchy are likely to not last long and will have serious internal tension and conflict of interests of people. Every person who has not yet revealed his destiny should have a king who lobbies his interests and helps him develop. And the subordinate himself must develop the qualities of patience and humility, thanks to which he will develop determination and sincerity in his chosen task.
4. Logistics and punctuality
5. Troubleshooting - shooting problems
It is impossible to solve the problems that have arisen within the system and eliminate archaisms. In this regard, there must be a trusted person who will come from outside the business and solve the internal difficulties of the business. Such a person is a kind of doctor who monitors the health of the business while being outside of it. This position guarantees integrity and impartiality in drawing conclusions and assessing events.
Internal problems or depression should not be dragged out and shelved. because they can completely destroy the root of an organization or cause. As soon as there is even the slightest unrest in thoughts or atmosphere, action should be taken immediately.
As the verse says, you should not stay a single day in a place where there is not a single factor described above. Such places have no prospects. If at least one condition is met, this guarantees a certain degree of prosperity and growth.
Today there are many different companies on the market, from the smallest firms to huge corporations. Moreover, some of them are successful and prosperous, while others become a thing of the past. What does a business need to have to thrive? What factors influence its success?
- First of all, this is the market in which the company is represented. Successful companies operate globally, large markets. Or the market should actively develop. Only in this case does a business, both beginning and developed, have many opportunities to realize its goals and objectives.
- Demand and uniqueness of the goods or services offered by the company. It is hardly possible to find a company that has achieved success without offering a unique product of its activities. After all, the sale of a product or service, like everyone else, underestimates the value of the offer. In addition, it is an obstacle to increasing profits. Therefore, first of all, a successful company identifies the value of its product or service in terms of uniqueness and relevance.
- Multiple sales. Moreover, this is not only the presence regular customers making repeat sales. But also the presence of a type of activity that presupposes further partnership. For example, this could be the sale of cars with their further maintenance. Or services that are used periodically (Internet, telephony, etc.).
- The lack of repeated sales leads to an increase in the company's expenses. After all, you must first find a client, then prove yourself, and sell. Then again you have to look for a new client. This is a very labor-intensive and costly process involving the use of both time and material resources.
- Improving company efficiency. First of all, we're talking about about the efficient use of the main resource - time, by investing in business development, and not in maintaining it.
- Continuous improvement of service quality. Not yet successful companies who would not care about the quality level of their goods or services. Especially if we are talking about a company that has just opened and began its path to success.
It is the quality of the product or service offered that is the key to repeat sales, which were discussed above. No client will return to the company if he is not satisfied with the level of service. Therefore, it is important to prioritize the needs of the client, not the company. - Maintaining a good reputation. Advanced communications (such as the Internet) can destroy the reputation of any company in a matter of moments. Often reviews, especially about negative experiences with a company, remain on the Internet for a long time. Therefore, it is important to monitor this situation. And if necessary, contact specialized organizations involved in “cleaning up” your reputation (and there are such).
In this article, we will look at the factors influencing small business strategy. In I have already mentioned the factors influencing small business strategy. In this article I want to dwell on this issue in more detail. When choosing a strategy, a small business must consider a number of factors. Let us dwell on the most important of them, the impact of which on business is especially great and without which small businesses will not be able to achieve competitive advantages in the market.
Introduction.
Small business owners must constantly be aware of the need to change business strategy under pressure from factors such as increased competition, changes in the economy, new regulations, or factors such as decreased productivity, increased business costs, high employee turnover, increased production costs, price changes for materials and components, etc., etc.
All factors influencing the strategy and on which the life of the business depends are divided into three groups: environment (external factors), internal factors and moral and ethical factors.
Almost all factors influencing strategy can have both a positive and negative impact on the business. The task of small business owners is to ensure that the factors influencing strategy exceed the positive ones and, if possible, minimize the negative ones.
The nature of the influence of factors on business strategy.
The nature of the influence of factors on business strategy is different and not equivalent. And any business strategy to achieve a comparative advantage over other businesses must achieve an optimal balance between factors that contribute to the business and factors that are dangerous to it. The nature of the action on various factors can be presented in the form of a diagram.
The nature of the effect of various factors on business. 
The diagram shows that the creation of a competitive advantage over other businesses operating in the same market is directly affected by only two factors - external and internal, and the third factor (the arrow is highlighted in color) affects indirectly. I will address this more specifically later. But all three factors can directly influence the limitation of business opportunities.
The diagram also shows that factors affecting a business can both contribute to the development of a business and lead to its collapse.
In the future, we will consider how different groups of factors influence the strategy of small businesses.
Factors influencing strategy. External factors (environment).
The environment is the environment in which a business exists and with which it comes into contact; it is the totality of all factors that are outside the business, but directly affect its activities.
The most important of these factors are:
— socio-political conditions in which business exists;
— governing laws, norms and rules in which the business exists;
— market opportunities, its size, degree of risk, competition conditions;
— interaction with suppliers of raw materials, materials and components;
— interaction with consumers of business products;
— interaction with competitors;
— the influence of scientific and technological progress.
I see no point in going into detail about each of these factors. It seems to me that their name itself explains a lot. In addition, I have already written about almost each of them more than once on this site. For example: you can see about interaction with suppliers of raw materials, materials and components in , about interaction with consumers of business products - in and in , about interaction with competitors - in , about the influence of scientific and technological progress - in .
As can be seen from the diagram, external factors impose a number of restrictions on business strategy, but, with proper adaptation and proper use, they can provide significant advantages over competitors. The success of a business largely depends on interaction with the environment. The success or failure of his business directly depends on how promptly an entrepreneur discovers and uses opportunities arising in the environment and anticipates dangerous trends in it.
Factors influencing strategy. Internal factors.
It is absolutely clear from the name that internal factors are all internal factors and processes occurring within a business and affecting its life. Internal factors include:
— strengths and weaknesses of the business;
— competitive advantages of business;
— personal ambitions and capabilities of business owners;
— business structure, its ability to rebuild and adapt to changes environment;
— economic opportunities, correct use and management of finances;
— correct business management;
— business;
— interaction with business employees, availability of qualified personnel.
Even in this case, I do not see the point of dwelling in detail on each of these factors. I have already written about almost each of them several times on this site. For example: you can look at business efficiency in and in, about the correct use and management of finances - in and in, about working with personnel - in and, etc.
As can be seen from the diagram, internal factors can impose a number of restrictions on business strategy, but, if used correctly and effectively, they can provide small businesses with significant advantages over competitors. The main thing is to correctly and economically use the resources available to a business and avoid making gross mistakes in running a small business. I have written enough about possible, typical mistakes of businessmen (see about the mistakes of small businesses).
I would like to note that internal factors are more predictable than external ones, they are easier to predict. Although many internal factors in the process of business promotion can change greatly in response to environmental changes, depend on changes external factors.
Factors influencing strategy. Moral and ethical factors.
Moral and ethical factors include:
— moral values accepted in society;
— personal moral qualities of business owners;
— corporate culture both the business itself and its owners and managers.
Moral factors usually play a limiting role in business strategy. The desire to tell the truth, not to deceive partners, your employees, suppliers, clients - these are all restrictions that affect. But let's look at the issue deeper.
It is no secret that quite a few entrepreneurs are trying to evade payment by fraudulent means. They can get away with this for a while and bring in business. But this cannot continue for a long time. The business will be closed down, and even the owners may be prosecuted. Or, for example, another, typical example. I think many readers have encountered deception, false advertising in stores, attempts to sell a low-quality, sometimes expired product at any cost. How long will this business last?
Yes, on short time, deception, and fraud can provide a business with a competitive advantage. But only for a short time. That’s why I highlighted in the diagram the connection between moral and ethical factors and competitive advantage in a different color.
There are many more examples of violations of moral and ethical standards. This includes underpaying your employees, deceiving suppliers, deceiving business partners, etc. etc. All this ends very quickly anyway.
Some businessmen specifically create businesses to deceive, to deceive naive clients. A striking example of this are, especially pyramids disguised as a business. They don’t exist for a long time, but they manage to rip off a lot of money from gullible citizens. I wrote a lot on this topic on the site.
As you can see, to create a business strategy for the long term, moral and ethical factors must be taken into account, and above all, as limiting factors.
Conclusions.
In this article, we briefly looked at the factors that influence small business strategy. I have already written that all factors can have either a “plus” or a “minus” sign. Of course, many factors are interconnected and influence each other.
However, both internal and external factors change frequently. New factors may appear that do not fit into the original business strategy. They can open up new business prospects or new opportunities for improving the small business, or, conversely, force you to abandon some initial ideas.
By 2020, the share of small and medium-sized businesses in the country's GDP should be at least 40 percent. This is also the goal of the current policy to stimulate business activity. Some of the documents have already been signed by the President; next in line are a draft decree on entrepreneurship and several more decrees. Deputy of the House of Representatives of the National Assembly, Candidate of Economic Sciences Valery Borodenya discusses how important this is for the economy and for people.
Valery Anatolyevich, the business climate in the country is changing dramatically. Many experts note that the state is taking truly revolutionary steps towards entrepreneurs. Before our conversation began, you even admitted that now you yourself would not mind starting a business.
Yes, but, unfortunately, civil servants are not allowed to work with us entrepreneurial activity. Although I know that in some other countries there is no such ban. And maybe we should also soften things up in this regard, avoiding conflicts of interest. If a person has the inclination, desire and ability to run his own business, why not?
- Curious, what activity would you choose? And what most influences business success today?
Considering that I have some experience, I would probably take up consulting services or opened a private school, maybe even a university. In principle, even before the current liberalization we had very tolerable conditions for business. In fact, the problem of entrepreneurs is concentrated, as a rule, in the area of competition, rather than legislation. Please note that most often a surge of discontent and discussions occur precisely when competition increases sharply. As in the case of private entrepreneurs: chain stores opened, new shopping centers, the market configuration was changing. This required a change in behavior patterns from the entrepreneurs themselves. Those who have been accustomed since the 1990s to trading in markets, in striped tents, will sooner or later lose. Yes, there are such tents everywhere in Europe, not just here. But they sell mainly seasonal products: fruits, vegetables, berries. People don’t buy clothes there because it’s already a thing of the past. Therefore, I think that it is not the legislative field that primarily determines people’s desire and ability to do business, but their inner conviction, their willingness to take responsibility for themselves, their family, and their future.
- What about a set of specific knowledge?and a share of adventurism?
This goes without saying, as well as without access to financial resources nothing will work either. Today, when macroeconomic equilibrium and stability have been established financial market, financing conditions are also changing. For example, the Belarusian Fund for Financial Support of Entrepreneurs already offers money to small businesses at a rate of seven percent per annum.
An extremely important factor successful business I think there is an emerging decline in inflation. The unpredictability of this indicator makes life incredibly difficult. Did you know that a deviation of inflation from the forecast by just a few percent can send your entire business to hell? The same goes for monetary policy. Therefore, everyone needs macroeconomic stability, and adequate interest rates allow business plans to be calculated normally.
I get acquainted with new documents on stimulating business activity and never cease to be amazed. Here you are united minimum requirements in the field of sanitary and fire safety, and a ban until 2020 on the introduction of new taxes, and an increase tax rates, and numerous benefits for artisans, and improvement of the licensing procedure, and streamlining control activities. Which of the proposed innovations, in your opinion, are the most long-awaited and important?
The fact is that we did not grow up in market conditions, but plunged into them like a whirlpool in the 1990s. Then we were told that this was a blessing, and that we would all live happily and richly. The reality turned out to be much more complicated than the theory. In addition, many people continued to live in the old way, relying on the state to solve all their problems, which tried its best to fulfill this function. On the other hand, a huge number of businessmen have appeared who are happy to make money from such a business, which is very close to deception. There are still enough of them. This includes selling blankets at inflated prices, adjusting windows, and selling “magic” dishes and water filters. Hence the mass of all kinds of prohibitions, restrictions, control and regulatory functions that were incomprehensible to our foreign partners and investors.
Now, probably, we have reached a stage when the state should gradually move away from excessive regulation, create additional conditions for self-employment. For example, the recent decree on craft activities. If a person knows how to do something with his hands and does it well, we need to give him every opportunity to earn money and sell his products, including via the Internet. I don't see any problem in this. The main thing is that people pay taxes, do not go into the shadows, and remember about social responsibility.
The same applies to inspections and fines. Probably, our law enforcement and regulatory authorities need to take a more flexible approach to this work, and not cut from the shoulder. A businessman must have the right to make mistakes, because he is a priori unable to accurately calculate all the risks that he may encounter. Can a director today work exclusively on 100% advance payment? Is he protected from encounters with scammers or, say, from force majeure external factors? In this case, the emphasis should be placed not on the punitive function of control, but on insuring possible risks and creating safety cushions for the enterprise. Let’s say that bankruptcy should not be considered unambiguously as an escape from debts; what is needed is a civilized reorganization of the enterprise, its rehabilitation, and, if necessary, re-profiling.
Nevertheless, while some call small business the locomotive of the economy, others argue that the future is still large companies and corporations. Who is right in this dispute?
There is no need to make it absolute. Of course, we cannot refuse large productions that fill the budget and carry a huge social burden. But small business is needed in order to tie up excess labor. It is small, but not minor, because people are born there innovative ideas. Enterprises that have achieved enormous success in the IT field initially began with ordinary startups, with the brainstorming of several people. Our industrial giants need small businesses like air to promote their products, generate modern ideas in marketing and advertising, and create new logistics mechanisms. In this sense, the potential of entrepreneurship has yet to be discovered.