BIOTECHNOLOGY BUSINESS

Johnson Bakery business organization

Reflections from this small scale case study

Introduction

Business management refers to all the activities which are directed at successfully running a business, for example leading, organizing, controlling, planning, and monitoring (Dumas, 2013).  As an entrepreneur, starting a business venture is perceived as being a huge achievement to him or her. Other than that, having the required knowledge, skill, and adequate resources of maintaining it is also another challenge.  There exist multiple challenges which are faced by various small scale business enterprises. This includes things like the building of the brand, hiring and training of employees and so on. However, there is a number of management issues that are typical to small scale business which of course large scale businesses have managed to grow out of long ago.

Regardless of the various favorable attributes that a small business organization has, it is still struggling to survive in a hostile environment. Many entrepreneurs running a small venture are always facing capital restrictions but no when it comes to investment in equipments and machinery. Contrary to that, funds that can be used for investing in fixed assets are frequently accessible and this is the reason as to why small business organizations are perceived to be having a large unused capacity of funds (Nieuwenhuizen & Erasmus, 2007). The commonly encountered financial constraints for majority of the owners of such businesses are getting the working capital. 

In most instances, only few sources are readily available for supplying small scale business entrepreneurs with the necessary funds which can be used for buying raw materials and intermediates, settle the wages of the workers and so on. On the other hand, owners of small scale business are in the position of enjoying multiple advantages unlike large competitors. For instance they have the capacity and flexibility of making decisions quickly as well as developing a close personal relationship with their clients hence creating customer loyalty (Nieuwenhuizen et el, 2008). However, there exist multiple situations in which small ventures are faced with difficulty of keeping pace with other large corporations.

With respect to the above case study carried out, management of employees, finances and marketing of the business are the three main issues which are faced by the owner. In connection to that, their analyses from the perspective of the owner as well as recommendations are discussed below. 

1. A) Problem of managing employees effectively

Analysis

For small business ventures, things are not always easy as it might be taught to be. No matter how hard the owner might try, problems will never end. This is to say that there will always be fires to put out or an issue to solve. The greatest challenge which is always under-resourced in such business is the management of people. By not having the right choice of people with the needed talents required for executing a particular task is an impediment to business growth (McGarvey & Hannon, 2004). Nowadays, most successful business revolves around people and not capital.

In a number of occasions, small scale business organizations lack the capacity of offering workers’ benefits, especially health insurance. At times, such businesses have insufficient workers who will qualify inexpensive group insurance rates. Despite that, in order to make premiums affordable, they may be required to produce high-deductible plans through which workers will be forced to bear a relatively higher health care burden. Moreover, the general lack of benefits hinders small business owners from attracting as well as retaining talented employees who might be able to find extra comprehensive returns packages from other large corporate employees (McGarvey & Hannon, 2004). This then means that every would-be entrepreneur ought to have a greater consideration to the people to be employed.

Through moving from the owner or founder of this business to the point of employees situation in which there is the delegation of duties, what this means is the people ought to be managed efficiently. This tipping point involves the human resource (HR) delegation of duties within each department, recruitment of employees and training, leadership, workloads and compensation.  This then implies that this point is repeated regularly in case there is the existence of extra employees to be managed directly by the owner of the business (Machado & Melo, 2014). It can also exist whenever geographically distinct offices are to be set up or functional teams are to be established for each department.

Whenever there is the need of coming up with new strategies, managing of employees entails ensuring that they are moving from their work opportunistic approach to accepting to execute any task which is available in the business (Cooper & Burke, 2007). In return this will evolve a focused strategy which will be aimed at targeting specific types of job and client as well as developing market opportunities for a particular brand. Repeating of the same activity will only is effective when new products are to be developed, entering new markets, when a new model arises or when new competition arises.

Recommendations

1. a) Hiring _ the owner of the business should make sure that he has hired in individuals who are trainable in case he can manage to hire the eagle.
2. b) Management of employees _ as a visionary entrepreneur, he should works towards engaging all of his workers. Through engaging them it implies that his workers will be emotionally committed towards the organization and its set objectives. This emotional dedication will then mean that all of those workers who will be engaged will end up caring about their company and their duties (Machado & Melo, 2014). They will therefore work on behalf of the goals of their business venture unlike working towards receiving a promotion or monthly credit alert.
3. c) Training and development _ the owner of such a business should ensure that he has sponsored his employees for various courses through sending them to programs which will enable them improve their knowledge and skills. An example of this, are those training which are aimed at improving selling skills of employees, customer care services, productivity, public relations or communication skills.

 

1. d) Reward and recognition award_ it is important to be in the position of encouraging, rewarding, motivating, and recognizing all the jobs which are well executed (McGarvey & Hannon, 2004). Nothing really inspires a worker like an honest thank you hug from his or her boss. It just makes him or her to feel more important and appreciated hence he or she will try and repeat the feat which had earned him or her that hug. Regardless of that, excessive use of phrases like thank you or well done have to be avoided.
2. e) Documentation _ in most cases, success business organizations are run on procedures, processes, and systems. By having all this in place, it means that the business will run efficiently and consistently (Cooper & Burke, 2007). When it comes to the issue which deals with procedures, anything that the owner does more than once will belongs in the operations manual. Even if the job is run by one person, he should it like he has the plans of growing the business and franchises it.
3. B) Financial management

Analysis

 Cash inflow_ The inflow of cash is the most significant issue to majority of small scale business organizations. For instance, it cannot be of any relevance having a profitable upcoming quarter which is already signed on a dotted line, in case its payroll doesn’t have enough funds for settling the wages of employees. A business which end up booking revenue in advance, but in return does no manage to realize income for a couple of months must be careful with its timing. Although its future ledger might end up showing nothing else but green, in case the cash at hand dips into the red, a crisis might erupt any time for which the revenue available cannot manage to contain it (Ghuman & Aswathappa, 2010). Therefore, for effective running of the business, the owner needs to ensure that the lines of credit are well maintained so that they can be able to keep track of the cash inflow.

Unforeseen expenses _Start-up business organizations often run closer to the bone and might be profitable as long as various unplanned events never occurs. Even a small percentage of expenses incurred, for example an increase in the cost of goods or one-time tax levied by the government on a small region, might end up causing a significant change in the bottom line of cash. Thus for the sake of long-term profitability, small scale business owner keeps maintains or regulates the changes in costs which in return helps him or her to keep track of the overall liquidity of the business.

Obtaining financing_ usually small scale business organizations are faced with greater challenges obtaining finances needed for running the business unlike larger ones. Banks are always reluctant in lending money to some un-established small business ventures. This makes entrepreneur to only rely on home equity loans or credit cards for survival. The reason for this is because they may have enough assets which are required for collateralizing a business loan. Lack of finances prevents small scale business owner from expanding his operations unless resorting franchising or seeking investor (Charantimath, 2006).

Keeping track of the money that a business makes is perceived as being one of the significant step or aspect of running a business. This entails recognizing its sources, the manner in which it is going to be spent as well as the returns that is expected from its expenditure. As the business continues to grow, it is expected that the owner will be enjoying the economies of scale hence managing his or her finances on a manual sheet of paper cannot be the wisest step to take (Ghuman & Aswathappa, 2010).

In most case, majority of small business owners do find that they lack the efficient time of managing their books of accounts. This is because most of the time they are so burdened with the work of running the business. Additionally, they cannot afford to hire an accountant or to keep the accounting records by themselves.

By having enough cash either in hand or at bank is essential for any business organization. This is because it is the vital resource which is used for offsetting various bills. For the sake of the business, he should recognize that he is likely to emerge as a capital drains which puts pressure on the business. Therefore, when starting a business, it is obvious that the owner ought to be heavily capitalized or be in the position of picking up extra income which will be used to shore up cash reserves whenever needed (F.f.m, 2015). This is the reason as to why mostly small business enterprises do start out with owners working a job as well as building his or her organization simultaneously. Although, this split focus can ultimately make the business to experience difficulties in growing, equally running out of cash makes growing a business enterprise impossible.

Nonetheless, managing of the business finances becomes of great significance when cash is flowing to the owner or into the enterprise. Regardless of the fact that, handling the accounts and taxes of the business can be within the owner’s capabilities, seeking professional help is equally a wise idea.

Recommendations

1. a) The owner should ensure that he has maintained a good accounting record. This will assist in ensuring that all the cash transactions have been tracked down so as to avoid any form of leakage in financial transactions
2. b) Period financial reports ought to be prepared chronologically by the owner through the use of the services form other professional accounts or by employing a qualified accountant (f.m, 2015). In the long run, this step will ensure that the owner has the capacity of maintaining strong financial position.
3. c) Moreover, the owner should not to use cash as the measure of the performance of his business. He should make use of the financial report for that. This is because majority of the entrepreneurs only do run on cash basis. They thus do end up monitoring the inflow of cash without considering their debt position.
4. d) The owner should come up with a strong credit policy system. The importance of this is that it will make him to ensure that the account receivable period is relatively shorter that the account payable period (Ghuman & Aswathappa, 2010).
5. e) He should also seek the service of a financial consultant who will assist him to maintain a strong financial position.
6. C) MARKETING CHALLENGE

Analysis

Marketing refers to the management process which is used for moving goods and services from the concept to the consumer. It entails the coordination of for elements which are termed as 4 P’s marketing.  The first one is product identification, selection, and development. The second one is the determining the price of that product. The third one is selecting the distribution channel to be used in ensuring the product reach the customer’s plane and the last one is developing as well as implementing of a promotional strategy (Ray, 2015).

Marketing strategy refers to the act of ensuring that messages of a business organization are in the position of addressing the needs of its customers. Therefore, the need of looking for new clients, the use of engaging marketing information which has the ability of generating results, implementation of business venture oriented marketing procedures and systems, and the inability of committing or allocating the time required for executing a particular task are some of the marketing challenges faced for this case study (Charantimath, 2006).

The management of the business need to recognize the fact that marketing is business development. Therefore, effective marketing involves recognizing and complete understanding of the business’s targets market as well as the environment of its potential customers. There exist no secrets for thriving marketing. As the owner of the business, he should not be misled by some marketing gurus who end up promoting market secrets which can only realized through attending seminars and pricey workshops (Ray, 2015). The principles which govern business marketing are well known and established. What the owner needs to recognize and do is achieving better marketing results through using directs response offers in promoting as well as building their business.

Marketing is typically based on the owner’s thinking about his business in terms of the needs of the customers as well as their satisfaction. Marketing is not the same as selling.  Selling is only concerned with the techniques and tricks which are going to make people to exchange their money for your product. Moreover, it is not concerned with the business transaction values. For marketing, the aim should be to integrate all the efforts which will assist in discovering, creating, arousing, and satisfying the needs of customers (Charantimath, 2006).  In other works, the act of marketing should not be perceived as getting consumers to pay for the product that the business will be offering. So it is a complex step which comprises of developing a demand for the product offered and fulfilling the needs of the customers in return.

Recommendation

Finding new customers and clients

With the issue which deals with finding new customers and clients, what should be known is that it entails recognizing who the business customers are. This involves knowing the best customers, their buying motivations, their buying or purchasing criteria, and their purchasing cycle. A comprehensive and intimate conceptualizing of all these points allows the business to develop an ideal customer profiles (Paliwal et al, 2013).  Appropriate marketing messages that are significant and powerful can then be used.

As the owner of the business progresses in recognizing his potential customers and clients in his target markets, the existing customers and clients should not be overlooked.  Although it is vital to grow the opportunities of the business with new customers and clients, the database of the old customers and clients is of great significance during communicating with them (Quarter et al, 2010).

Engaging marketing messages which has the ability of generating results

In the owner truly desires to realize immediate as well as quantifiable market results, he should be able to use direct response marketing offers. He should not waste his precious time engaging in ‘feel good or hopeful’ marketing by just using image building and purely branding advertising. The reason behind this is that majority of small scale businesses afford the expenses associate with branding and image building advertising for a long period. This is an activity which can be managed by large companies. In order for the business to engage marketing messages which end up driving marketing results, the owner should time his message with the customers’ purchasing cycle, use emotive language, and create a sense of urgency whilst responding to his offers and so on (Paliwal et al, 2013). 

Implementing business oriented marketing systems

The owner of this business ought to realize that by having effective and efficient business systems, he will be in the position of driving his profitability as well as allowing his organization to operate its daily processes continuously (Quarter et al, 2010). Therefore, he should develop correct marketing strategies and mix of sales, implement the required IT and other communication infrastructure and recognize the essence of testing, tracking and improving his marketing skills. 

 

 

 

 

 

 

 

 

 

 

References

Dumas, M. (2013). Fundamentals of business process management. Berlin: Springer.

Nieuwenhuizen, C., & Erasmus, B. (2007). Business management for entrepreneurs. Cape Town: Juta.

Nieuwenhuizen, C., Rossouw, D., & Badenhorst, J. A. (2008). Business management: A contemporary approach. Cape Town, South Africa: Juta.

McGarvey, B., & Hannon, B. M. (2004). Dynamic modeling for business management: An introduction. New York: Springer.

In Machado, C., & In Melo, P. (2014). Effective human resources management in small and medium enterprises: Global perspectives.

Cooper, C. L., & Burke, R. J. (2007). Human Resource Management in Small Business: Achieving Peak Performance. Cheltenham: Edward Elgar Pub.

Cooper, C. L., & Burke, R. J. (2007). Human Resource Management in Small Business: Achieving Peak Performance. Cheltenham: Edward Elgar Pub.

Ghuman, K., & Aswathappa, K. (2010). Management: Concept, practice and cases. New Delhi: Tata McGraw Hill.

Charantimath, P. M. (2006). Entrepreneurship development and small business enterprises. New Delhi: Pearson Education.

Fundamentals of financial management. (2015).

Ray, N. (2015). Emerging innovative marketing strategies in the tourism industry

Charantimath, P. M. (2006). Entrepreneurship development and small business enterprises. New Delhi: Pearson Education.

Paliwal, P., Singh, R., & Yadav, S. (2013). Cases in business marketing. New Delhi: McGraw Hill Education.

Quarter, J., Mook, L., & Ryan, S. (2010). Researching the social economy. Toronto: University of Toronto Press.