Week 10: EOC Not Failing

1. Business owners should lead, so others will follow. "Good business leadership begins with defining the destination and direction of your company and deciding how the business should look and operate when it arrives," McBean writes. "It also involves developing and continuously improving on a set of skills in order to move your business from where it is today to where you want it to be tomorrow."

2. Owners should take control of their businesses. If owners don't have a hand in day-to-day operations, they have no control over whether businesses will succeed, McBean argues. "Don’t stop at pointing out what should be done and how, also clearly state and emphasize that there will be consequences when standard operating procedures and processes aren’t followed." Be stern with employees. 

3. Put protecting a company's assets above all else. Businesses should educate themselves about where they've invested and how those investments are doing. "The key is to understand what all of your company’s assets are, and then guard them closely and work to maximize the profits they represent," McBean said. "Because if you don’t, they will haunt your business and cause financial pain when you least expect it." 

4. Start planning the future instead of predicting it. Business owners can't predict the future, but they can make educated decisions depending on what they know. McBean gives the example of Ford Motor Company. In 2008 and 2009, its competitors, GM and Chrysler, ran out of cash and needed taxpayer bailouts to avoid bankruptcy. But years prior to the credit crunch, Ford began to restructure its debt and raised billions as it continually added to cash reserves. "Was this luck or good planning? Industry insiders will say good planning," McBean writes.

5. Market the business to make sure it stays relevent. “New business owners especially are nervous about marketing because money is already so tight at this stage,” McBean said. “But you have to make the necessary effort to connect consumers to your company." 

6. Remember that the marketplace is a war zone. McBean says it's necessary to develop a "warrior mentality" instead of shrinking away from the competition. "In order to be successful and remain that way, you have to continually focus on the market, react to it, and fight for what you believe should be yours. If you don’t, your competition will win the war," he says. 

7. Focus on general business principles instead of the specific industry. "You need to understand the various aspects of business as it is more broadly defined, such as accounting, finance, business law, personnel issues, and more, and how all of these impact each other and the decisions you make," McBean says. 

In Order for a company to be successful, it must follow up on promises to customers. Marketing sets the expectations. Finance and accounting ensure that the financial resources are available to produce the expected products and services. Legal structures and staff are in place to support success. Ultimately, the company must deliver the product or service to the customer as promised. Operations is the set of actions that produce goods and services, and operational efficiency is critical to business success(pg 386)

1. Show you how to make the business more profitable. Perhaps your profits are down this month over last. Did your expenses go up? Maybe you need to try lowering your costs. Did your sales drop? Maybe you are not spending enough on advertising. Use accurate records as a base to constantly improve your business.
2. Document profitability and cash position. If you want people to invest in your business, documenting that it is profitable, or could be, is essential. Keep accurate records to create financial statements and ratios.
3. Prove that payments have been made. Accurate, up-to-date records help prevent arguments, because they prove you have paid a bill or a customer has paid you. Records can also prove that you have paid your taxes—the fee levied (charged) by a government on the income or activity of an individual or legal business entity (corporation). Sometimes the Internal Revenue Service, the federal agency that collects taxes, will visit a business and check its financial records in a process called an audit .
4. Take advantage of tax deductions. U.S. tax law allows business owners to deduct many expenses from their taxes. These deductions, or write-offs, are reductions in the gross amount on which taxes are calculated, and they will save you money. But you must keep receipts and record check payments to show that you actually had the expenses. (Pg. 236)