Leadership Styles

Posted on January 15, 2015 by Julian Gooden

It is said that leaders are born, but many leaders are self-made. Taking on a business venture will put you in a leadership role; you will have customers, creditors, employees and others to deal with on a daily basis. Your leadership style will affect the running of your business. No style is perfect but some have more downsides than up. Here we look at three of the main leadership styles. What type of leader are you?

Authoritarian / Autocratic

This is a type of leader with controlled authority. This leader usually has a clear vision for the business, is task-oriented and does not solicit response or contributions from employees. As such, she/he is usually viewed as domineering and can be overbearing at times. If you are such a leader get your views across without abusing your power. This style would work in a situation where you are really knowledgeable and there is usually no forum or need for other contributions. This is however not the most favoured style of leadership in the modern business world as employers often prefer not to stifle employees’ creativity.

Democratic / Participative

This is viewed as the most effective style of leadership. This type of leader sees to it that there is cohesion in the organisation. They are usually employee-oriented and encourages employee contribution in decision-making, though they make the final decision. Employees usually feel more motivated as they are a part of an organisation which serves to increase creativity and employee involvement.

Laissez Faire / Free-reign

This type of leader encourages employee participation and usually gives very little direction or guidance to employees. This could be negative because employees need direction from employers as to the role they are supposed to fulfil, so unless employees are experienced and competent in their field, and are used to working on their own, this could in effect kill creativity and motivation since there is absolutely no direction. Also the decision-making process can be extremely slow which wastes time.

Inevitably your personality and beliefs will determine the type of leader you are but that does not mean you cannot strive to improve your areas of weaknesses. You should have some control, especially where you have started a new business and would like to see things done a certain way for the better of the organisation. Bear in mind the fact that the people you employ are supposed to help you build that dream, however you must provide guidance.

Setting Goals 2015: 3 ways to improve your business

Posted on January 4, 2015 by Julian Gooden

We are now into a new year. For many of us the excitement has already worn off and we are now focused on the list we made of things we hope to achieve. In some instances it is a very long list, but …what is on that list as it pertains to your work and business goals?

Setting goals is an important part of preparing for growth and success, whether you are a small business owner, entrepreneur, freelancer, self-employed or whatever you label yourself. As such, this is an opportune time to set goals that will result in success and begin working to bring them to fruition.

Do not set your goals without examining these three (3) areas and if your have not addressed them, then take a look at your list again as they are important and could mean difference between success and failure this year:

1. Aims / Objectives

re-examine your aims and objectives. Are they still as relevant to you now as they were when you first made them? Be specific about what you hope to achieve. Sometimes it is even necessary to rewrite or amend them – think about it… do it now!

If you do not have any objectives laid down, now is a good time to start making a few – you can add more later.

Having aims/objectives makes it easier to work towards achieving a goal and succeeding at what you do.

Examples of some short term objectives:
– increase google ranking to page one for your chosen keyword within a year
– increase website visits by 200% by March 31st
– reorganise customer service response system so as to respond to customers queries within 24 hours

Always attach a time limit to your goals.

2. Keep your word

this is important. It is a very competitive world and whether you are a business owner with one hundred employees or a self-employed freelancer, your word should be your bond. When you make a commitment to your client or customer, deliver on your promise! If there are mitigating circumstances that interferes with getting things done, then inform them in a timely manner, offer alternatives where feasible and of course apologise. This is how you build trust and encourage clients to recommend you to others and your reputation and business will benefit from it.

3. Promote

promote, promote, promote! I cannot say this enough. Get out there and use all the free resources available to you. Create a website, blog and social media accounts (Facebook, Twitter, Google+, LinkedIn, Pinterest, Stumbleupon and any other you think could increase your exposure). Create videos on Youtube, use email marketing – there are a number of free email marketing tools to assist with sending newsletter to customers and potentials about your new product or service. Create business cards, carry them with you and issue them where and when you can.

While a number of others could be added to the list, if you focus on these three areas you should see improvements.

Many people want business success, but with an ad hoc approach they rarely see results. Organise yourself, keep your goals in mind and make a renewed commitment to work hard at achieving your goals this year.

Pricing Strategy

Posted on December 31, 2014 by Julian Gooden

All businesses at various times deal with issues relating to the cost they accrue for acquiring raw material and determining prices which they will charge customers for goods and services.

Costing

Cost is a necessary part of running a business, raw materials have to be bought, rent has to be paid and of course whatever expenses are incurred in the starting and running of your business. To determine your price you first have to determine your business objectives and your costs. You will probably finally price your products based on your own costs, your competitors’ prices or the demand for your product.

Know your costs

Determining your cost will aid you in determining your price; if you are operating a really small business then this will be easier for you to do.

Distinguishing costs

Fixed costs

These are costs that are not dependent on your usage, for example, your rent is a fixed cost, it will not change if you produce more or less for the month.

Variable costs

These are costs that vary depending on usage, examples are your electricity and water charges.

Direct costs

Costs that are directly linked to the production of goods or services, for example if you are operating a restaurant where you sell vegan burgers, then a direct costs would be the cost of your burger ingredients and the seasoning and spices you use to make it tasty.

Overhead costs

These are costs that can be directly linked to the production of goods or services but is not specifically linked to any one product, for example, the air conditioning unit in a restaurant.

Pricing

You can choose your pricing with the intent of satisfying a number of goals:

Demand

You can price your goods based on the expected demand for your goods or services. You have to look at the price the market is willing to pay. Therefore you could charge more for your product if the market is willing to pay more. If your potential customers see your product as a ‘premium product’ then they will be willing to pay more for it because they view it as quality above the ordinary.

Competitors

You can decide your price based on what your competitors are charging. You may choose to go above, below or charge the same. If you decide to go above your competitors make sure you are marketing a product that is in some way superior to theirs’, whether you are offering better after sales or customer service. Whatever it is, you don’t want to price yourself out of the market.

Costs

You can determine your costs and add a mark-up to that cost to get your price. Try to at least break-even or else you will find yourself in trouble pretty quickly.

When determining prices try to be realistic, don’t set prices too high or two low. Remember the information you would have acquired and analysed from your market research is to help you determine where you stand in the market, so think through that when you decide your price. Consider offering different packages to suit the needs of different markets. You may even decide to charge your high-end clients a different price compared to what you offer your low-end clients.

Here are some pricing strategies to consider:

Competitor pricing

Set your price based on what competitors are charging.

Cost-plus pricing

Set your price by adding a percentage to cost. Find out how to calculate cost plus price.

Penetration pricing

Here you set the initial or introductory price lower than the current market price to gain many sales and lure customers. The price can then be increased when the product becomes more popular.

Price discrimination

Here you set different prices to different markets for the same product.

Predatory pricing

Setting a very low price with the intent of getting rid of the competition. You continue to drop the price until your competitors are out of the market.

Psychological pricing

This is where you make a price seem smaller by setting it below a bigger figure e.g. $19.99 instead of $20.

Price skimming

This is where you will set a rather high price in the initial stage but lower it over time.

Whatever pricing strategy you use, it is important to ensure that it will keep you in the market.

Quality Control

Posted on November 21, 2014 by Julian Gooden

Quality Control is the process by which businesses review the quality of all factors involved in production. The aim of management and employees should be to strive for excellence. High quality is to be maintained regardless of whether a product is in great demand at the moment or not. These are a few things that will aid in maintaining quality:

Good quality material
Well-trained employees
Customer service quality
Good methods for customer feedback
Means of analysing and measuring profitability and growth
Increased productivity
Setting goals in place and measures for reaching such goals

Enhancing Business Competitiveness

Posted on September 15, 2014 by Julian Gooden

There are usually businesses entering or leaving a market. The rate is of course dependant on a number of factors. However, regardless of the reasons, you have to stay competitive in order to operate profitably. How can you stay competitive?

Training – Gather additional knowledge and skills in order to compete with increasing competition; don’t be laid back, get on top of things. What are the latest events in your field? What about new technologies? Are you able to understand these? Could they enhance your competitiveness?

Opportunities – Find out what’s new on the market, keep abreast of changes, and always try to exploit new market opportunities.

Increase efficiency – Find ways of improving your product or service; especially new methods that would increase quality and reduce cost.

Build customer loyalty – Lock in customers with effective customer care. This will result in customer/brand loyalty.

Quality control – Ensure that delivering high quality product or service is part of your business’ motto.

Well-trained staff – Your employees should be well-trained and be well aware of their job roles.

Quality input – Input in the production process should be of quality, and that quality should be supervised and maintained.

Identify areas for improvement – Keep close eye on all areas of your business so you will be able to quickly identify areas that need improvement.

Financial needs – Assess the financial needs of your business and its urgency.

Competing – Acknowledge your competitors, be ready to compete. However, don’t try to compete with large businesses head on.

Differentiate – Try to differentiate in the areas of customer service, pricing and packaging.

Explore advantages – Explore competitive and comparative advantages.

Aim for growth and development – If you stand still you will eventually go backwards. Identify areas that need improvements and determine how you will meet such improvements.

It is important that you work at enhancing your business competitiveness by implementing the changes necessary and be consistent in seeing these changes maintained and improved upon.

TIME MANAGEMENT

Posted on August 31, 2014 by Julian Gooden

When time is not properly managed, it is quite likely that everything else will be off. Time wasted could be used to accomplish important tasks, as such, it is critical to apply time management to all aspects of your business. This will help you to:

Make plans and so you will know what need to be done and when

Note the important from the mundane tasks

Not get distracted easily

Be in control, instead of feeling like you are running around in circles

Reduce stress

Improve efficiency

Avoid chaos

How can you manage your time better?

Often we rely on memory and don’t keep notes of what need to be done. Do that no more! Get a calendar, a diary or a timetable.

Even if you think you are unlikely to forget an activity, pencil it in.

Make it a habit to check your calendar at the beginning and end of each day.

Always have your notebook with you.

Prepare a timetable for yourself for the week. What do you hope to achieve this week? What do you need to do on Monday or Friday for that matter? Do you need to call creditors, in what time period will you do this? Don’t make your days too routine, you will probably get bored after a while.

Schedule time for breaks. If you are really tired then you lose momentum.

What do you want to spend time on… and are you good at it? Know your limit. Be honest here, don’t try to do everything – if someone can do the job better, delegate!

Identify the areas or tasks that take most of your time, how could you utilize or restructure your time so you spent less time doing these tasks.

Make sure your desk and work area are properly organized, you don’t want to spend 15minutes looking for an invoice you thought you left there.

Try to keep focused on your tasks. If the telephone gets in the way you could probably ask someone else to monitor the calls for a period. Of course, if you work alone this won’t be possible but try to think of another workaround.

Be proactive, when you accept your challenges and duties head on, then it is unlikely that procrastination will set in.

Management Responsibilities and Skills

Posted on August 11, 2014 by Julian Gooden

As a manager you have responsibilities to:

Employees – To ensure that there are good working conditions and proper remuneration.
Customers – To deliver quality products and good customer service.
Government – To observe various laws and the necessary taxes imposed.
To society – To ensure you do not pollute the environment and that you are an asset to the community in which you operate.
Yourself & other owners – To ensure that the business is conducted as effectively and efficiently as possible and that the business is not just making a profit but making the ‘best’ profit possible.

MANAGEMENT SKILLS

What is management all about? Management can be described as the effective means of handling your business. So your aim ought to be to increase efficiency, productivity and hence profit, through your administrative and leadership control.

As a manager of a small business more often than not you will be responsible for paying your suppliers on time, recording financial information, keeping the books updated, tax payments, getting licenses, permissions and permits – so yes, there is quite a lot to do.

You should be able to direct, delegate, control, organize, hire/fire, communicate and also motivate those working for you. Even if you are working as a freelancer and intend to keep it that way some of these skills will still come in handy.

Plan – All businesses need a management plan. Planning involves looking at the future prospect of the business, when planning set a goal for your business as to what you hope to achieve within maybe the next month or even the next year. Maybe as a freelance writer you want to make $1,000 per month, how will you achieve this? When you make a plan and write it down, it serves as a ‘road map’ for future development and you can refer to it from time to time to see if you are accomplishing your goals and whether changes are necessary. Plan for recruitment and capital expenditure and make a budget. Planning should be a continuous process.

Direct – If you will have people working for you will have to direct your employees effectively. This gives you the opportunity to guide them, so they are aware of what their job functions are.

Delegate – Don’t be afraid to delegate responsibility. Assign each employee a duty, let it be clear that each person is responsible for that particular duty and is accountable for their performance and if possible set a time frame for completion of each task.

Control – This might seem a scary word but in this context it is not. What you will need to do is to monitor your employees from time, just to ensure that they are performing their jobs according to instructions so you can identify issues before they escalate.

Organize – Plan the work you need done, set time for its completion and once again, do some supervision. Organize method of remuneration and make an organizational chart.

Communication – It is often said that communication is key and this is quite true, don’t leave you employees guessing, there need be a two-way dialogue. Employees must also be able to express their concerns without feeling threatened.

Motivate – You might say, ‘Well I employed that person to do a good job, so they are doing a good job – just what I am paying for’. Wrong! Often this is not enough. Workers like to feel appreciated, tell them they are doing well, give bonuses if you can, pay workers for overtime on the job. When you build loyalty in your employees they will more often than not strive for perfection on the job.

Educate – As your business grow, with time you will realise that you might not only have to further educate yourself but your employees also; you do not have to take on huge expenses, even one day workshops could prove quite beneficial. Ensure you train new employees as it relates to your company’s procedures and their job functions. Also when you implement new systems or functions to a post, train the employee.

Hiring – Your employees can help to make or break your business; you want the right people for the job. Note beforehand the particular skills, qualification and experience levels you need. Design a test or questionnaire for prospective employees to complete.

Firing – When an employee is not an asset to your business, especially where that person’s attitude negatively influences others, you need to let that person go. It is important that you have a good deportment from the beginning, let your employees know that you are approachable and make them feel they can come to you to discuss issues, however never let yourself be seen as weak, this will not benefit you over time, be ‘nice’ within reason.

NB. Even if you are a sole trader just starting out with no employees to speak of, make a plan of your goal, have a mission statement about the aim of your business. Then write yourself a plan as to how you intend to reach those goals.

If you think that proper Management in unimportant, here is why you should rethink.

Poor management will:

Kill productivity and growth
Decrease business’ profits
Result in poor information recording
Result in poor communication
Result in poor planning and organization
Result in bad decision-making

It’s never late to make a fresh start. If you are operating in a structure or way of business that isn’t working for you, then take the opportunity to change the business management.

Management