Author: BizSieve Team

Surprise Management: Diversify to Weather Tough Times

Today’s businesses have used Change Management and Risk Management with varying degrees of success. While these strategies can help companies prepare for an unknown future, they fall just short of accomplishing the strategic goals that 21st century companies need if they are to keep pace with rapidly changing market conditions. What will it take to fill the gaps in these two theories? Surprise Management.

Background

We all know how disconcerting change can be. And when we add surprise to the equation, we face a huge organizational challenge. Uncertainty, unpredictability, and our all-too-human inability to dictate outcomes are facts of life that organizations must address if they are to thrive.

The natural fear of uncertainty often leads organizations to implement uncertainty-reduction (or risk-management) measures—and hence the development of Risk Management theory. Many have tried to eliminate “the surprise factor”—with varying degrees of success. One method that’s been suggested for eliminating surprise is to anticipate surprises before they happen and take appropriate steps to minimize their occurrence—certainly a commendable goal. Yet, a surprise by its very nature cannot be foreseen. (Otherwise it wouldn’t be a surprise.)

A more realistic way of phrasing the above goal might be to say that reducing surprise involves an attempt to predict what could go wrong (i.e. to project risk) and put in place preventive measures against these potential problem occurrences—measures which not only minimize the overall number of occurrences but also reduce the number that are actually surprises. It is only in this sense that Risk Management can “eliminate the surprise factor.” While it would be impossible to anticipate the surprises themselves, this thorough projection of future possibilities would undoubtedly help eliminate some surprises, simply because the organization would now be aware that these eventualities could potentially occur. Yet, the success of this approach in managing surprise is limited.

In contrast, Change Management, by providing both managers and workers with the tools they need to handle the reality of change across a rapidly evolving business landscape—and perhaps equipping them for various specific future eventualities—can at least help an organization prepare for surprises, if not reduce the frequency of their occurrence.

Surprise Management: A More Comprehensive and More Flexible Approach

Surprise Management—a concept which is thoroughly analyzed in a 2005 article in the British Journal of Management, “Surprises in Management and Organization: Concept, Sources and A Typology”—presents the rationale for addressing unwelcome (and perhaps even welcome) surprises through the concept of diversification (despite the authors’ non-use of that specific term).

The authors define surprise as “any event that happens unexpectedly, or any expected event that takes an unexpected turn.” The main point of the piece may be distilled into the following brief summary: Because unpredictable events and unexpected turns of events (aka, surprises) cannot be precisely controlled, a more diversified and more flexible approach is needed for an effective response.

As the authors state, “Surprises can potentially result in organizational catastrophes (e.g., Shrivastava, 1992),” and they therefore conclude that “rather than merely insisting on the prediction of surprises, organizational researchers should investigate how organizations might develop the resilience and mindfulness necessary to deal with unanticipated events.”

Surprise Management Tools

A few surprise-management strategies the authors recommend for developing such mindful resilience follow:

  • Bricolage (constructing a solution from whatever diverse resources may be at hand)
  • Improvization (“the ability to access creativity in the moment and under pressure, to resolve or direct the resolution of a situation to meet [company] objectives…”)
  • Distributed decision-making (a decision-making process [that is] distributed across multiple participants, each of whom contributes to the final decision by performing one or more tasks)
  • Minimal structuring (implementing “a set of consensual guidelines[,] agreements, [and] co-ordination devices that attempt to focus the activities of people around a common set of goals and deadlines without limiting their discretion to best decide how to reach these goals)
  • Dynamic adaptive capabilities (“the capacity of…institutional approaches to permit actions that are effective ‘adaptive’ responses to changing environmental circumstances”)

The above approaches combine to provide the diversified organizational response that today’s enterprises need to skillfully manage the surprises that might otherwise prove catastrophic to their successful operation—helping them not just survive, but thrive.

About the Author: Guest post contributed by Sarah Carling, on behalf of Injury-lawyers.net.au.

5 Budget Management Tips for the Small Business Owner

Running a small business means pushing your products and services against the odds created by big business and natural competition, making every dollar worth counting at every turn. Limiting overhead and increasing profits are mainstays for all businesses but their minute importance is even more pronounced for small businesses, with a single bill or lost sale potentially making the difference between success and failure.

If you’re a small business owner looking to exert greater control over your budget through new tools and ideas, consider these five budget management tips for small business owners:

1. Separate Personal and Business Finances

Separate Personal and Business Finances

Keeping the money you use for home expenses separate from that intended for business is an absolute must for long-term success. Good accounting entails knowing exactly where expenses and profits belong and mixing these different financial areas, whether on paper or only in your mind, has the potential to lead to disaster.

2. Maintain Six Months of Expenses

Maintain Six Months of Expenses

While often easier said than done, having ample cash to fall back on is of absolute importance if you intend to see your small business to long-term success. Even the most well-thought out startups require time and patience to turn a profit and having money put away for both personal and business expenses to help you through the initial tight stages will help both you and your business to remain viable from opening day onward.

3. Become a Professional Accountant

What better way is there to manage your finances accurately than by becoming a professional yourself? Small business owners in the United States are able to study for and complete the Uniform Certified Public Accountant Examination at any time, giving you the cutting-edge knowledge and tools required to take full, hands-on control over your finances, both personal and business. You’ll need to pass cpa exams in order to do that though.

4. Take Your Taxes Seriously!

Take Your Taxes Seriously!

Whether you take our advice above to consider becoming a certified public accountant or you hire an outside professional to manage your finances, be sure to take your tax returns very seriously. This challenging requirement of being self-employed is more complicated than seemingly endless tax returns; polls show that one of the biggest tax problems faced by small business owners is failure to submit returns at all. The most cited reason for non-submitted taxes is a failure by the business owner to save taxes owed throughout the year only to balk at the total amount when that lack of financial management makes paying a tax bill impossible. To avoid such problems, always be sure to calculate the taxes and other government premiums owed on a regular basis throughout the year, maintaining accounts to hold those funds until the time that they’re needed.

5. Reassess Your Finances Regularly

Reassess Your Finances Regularly

Too often small business owners find themselves needing to review their expenditures when financial difficulty presents itself, leaving months or even years of unnecessary spending in their wake. To avoid wasting even a single dollar on unneeded overhead, take the time to review the money you spend on maintaining your business and make decisions to reduce or even eliminate costs whenever possible, avoiding uncertainty in the future and helping your business to remain viable even during the tightest of times.

Conclusion

While small business management does present difficulties not typically found in the workforce, creating and sticking to a well-thought out plan is the key to maintaining your freedom from the daily grind, making it a more than worthwhile endeavor for any entrepreneur. Follow the tips laid out above, recognize and tackle the hurdles unique to your niche and give your small business your all in an effort to ensure the best possible chance of a successful financial future!

About the Author: Jessy is a small business owner working full-time in the Internet

Image Credits: 1, 2, 3, 4.

The Dual Entrepreneur: How to Balance Running Two Companies at Once

In general, entrepreneurs are idea people. They don’t necessarily have to be creative in the classical artistic sense, but they have to be flexible, self-motivated, and able to follow through on a good idea.

Many budding entrepreneurs hold themselves back by spreading their work too thin. Do you think Mark Zuckerberg would be orchestrating billion-dollar buy-outs if he’d focused half his energy on Facebook, and the other on opening a pizza chain?

Getting a business off the ground requires your full attention. Once it’s up-and-running, however, it’s possible to expand. Just look at many of the world’s most famous athletes and musicians who balance careers in Hollywood and on the playing field. Mark Cuban is a terrific example, juggling ownership of the Dallas Mavericks NBA team, Landmark Theatres, and chairing the HDNet cable TV station.

So how do you get to be the next Mark Cuban? While I’m far from the Forbes 500 list, I can happily say that I’ve successfully managed to maintain two profitable businesses for the last six years.

entrepreneurship tips
Image: @boetter / Flickr

Believe That You Can Do It

I opened my first business when I was 12-years-old in my home country of Iran. Raised by a father with a strong emphasis on self-sufficiency, two partners and I began a small potato chip factory. We hired a few employees and sold chips to supermarkets and local schools.

That same spirit of motivation led me to dentistry school. Nearly two decades ago, with a fresh doctorate in hand, I threw myself whole-heartedly into my practice. Over time, I built wealth that needed to be invested. Wall Street didn’t appeal to me, so I bought real estate. When the housing market dropped, I took the wake up call as a sign to diversify.

Like any entrepreneur, I always have my eyes open for new ideas with revenue-generating potential. At one point, I recognized a need for a glass and mirror provider in our market, found a suitable partner, and went into business again. Although my wife might say I’m addicted to work, my dentistry practice never suffered.

Love What You Do

If owning a dentistry office and running a glass and mirror supply company bored me or stressed me out, I’d quit one or the other. Because I’ve found industries that appeal to me, I rarely feel like I’m actually working.

Let’s put it this way — my son plays video games for an hour a day. He says it’s his ‘down time.’ My wife watches soap operas for an hour each afternoon that’s her down time. And what I do in front of the computer for my businesses is truly a down time for me. It’s not work. If it was, there’s no way I’d be able to do it. At home on the computer, I can casually answer emails and truly relax. I enjoy what I do, so it’s more of a game than anything.

Sure, it’s a cliché, but I fully believe the old quote that says, “Find something you love to do, and you’ll never work a day in your life.”

Don’t Rule Anything Out

Ten years ago, I would never have imagined I’d own a glass and mirror company. When the opportunity arose, however, I didn’t overlook it because of my lack of expertise in the area.

It’s not so much the product that matters when you’re an entrepreneur, but the business itself. As long as you know how to run a business and you understand the numbers and how to market and sell, then the product just has to be something that interests you. It could be glass or wood or anything — if you understand business and recognize a need, you’ll succeed.

For me, personally, dentistry and glass sales go hand-in-hand for my lifestyle. Being a dentist is a physical vocation that fills my days, while glass and mirror sales are a number-crunching, analytical job that I do in the evening. It’s like a hobby.

If you already own a successful business and another opportunity arises, don’t run away from it for fear of being over-burdened. As long as you enjoy both jobs, running two businesses can truly be a pleasure.

What combination of businesses would you most like to own or manage?

About the Author: Bahram Nasehi is a Vice President and partner at Dulles Glass and Mirror. He is instrumental in the developement and manufacturing of commercial and residential glass products including tempered glass, glass table tops and shower doors.

How To Create Your Own Business?

Creating your business is starting a life full of rewards and difficulties as creating your own business has pros and cons. Starting your own business requires focus and time because you have to make it grow and succeed. There are a lot of steps and advices on how to start a business. Here are some of the great ways on how you can get through the startup phase of a business.

Conceptualize and Start with Your Own Idea

Starting your own business may need your own idea on the products or services that you are going to offer. Starting with your own idea means that you take hold of your own business; you can have additional advices from other people, but your own idea is most important because it is what you are going to offer the public.

Do research

Since you are just starting, looking into business plans of other small and large companies will be helpful in assisting you start your business. Research for your possible customers, how much you need, where should you advertise, who are your competitors and how will you compete with them. Research is one of the steps in planning your own business.

Draft your business plan

After researching, make your own business plan, which you will use in undertaking your own business. Make a thorough financial planning as to how much you need in order to fund all the aspects of your business.

Identify sources of funds

You have to determine if you need financing from bank loans, credit cards or others. You can also self-finance if you have adequate funds. It is important to have in your business plan the probable expenses in order for you to produce the adequate funds you are going to need. It is also important to allot a sufficient salary for yourself in order to mind your living as you still enter into a new world of business where several possibilities maybe met.

Make complete and updated list of your clients

The customers are the best asset of a business because the income of the business comes from them.

Have a clean book

This does not mean having book to read, but a list of the finances such as the expenses of income of the business. Most of the small busies do not accounting of their finances, which is very hard for them to know if they are gaining or not.

Have an electronic credit card machine

Even how small your business may be, it is important to have a credit card machine because other customers always have to pay using credit cards and you don’t want to lose any clients just because they will not be able to pay you with their cards.
Find the purpose of your business

In every business, it is important that you know where you are going and what your mission is. In this way, you become more inspired to start and maintain your own business.

Creating your own business will never be easy, but what is important is you have the passion and inspiration to start it.

About the Author: Amarendra, the author likes to write on how to start and register a company. He is blogger, freelance writer and SEO.