Business Tips : How to Run a Profitable Business

Knowing how to run a business can be downright challenging. It could be even more complicated if you have not studied careers related to business administration and management. However, understanding Tis key to making that great entrepreneurial idea you have in mind a reality, making your company grow and ensuring its sustainability over time. While it is true that to manage a business there are certain parameters that must be followed, it is not an issue that should scare you. Therefore, in this note you will learn the main tips to manage a business in a prosperous and profitable way.

Follow these tips to run a business and make a profit-making machine!

Learn what it means to run a Business

Business administration seeks to guide the management of a small, medium or large company or business to the maximum. According to the definition of Stephen Robbins, an expert in business management and organizational behavior:

“Managing a business means performing tasks of coordinating and supervising the work activities of other people in such a way that they are carried out efficiently and effectively.”

The reason you should be interested in learning about business management is because of its importance to your success. A successful business administration allows the sustainable growth of the company, the use of resources and progressively improves processes.

Basic pillars for the administration of a business

Managing a business encompasses 4 basic pillars that you should consider:

Planning. It consists of defining the business objectives and stipulating the steps that must be followed to achieve them. It is planned based on the current situation of the company, without losing sight of the future that may await it.
Organization. It is about deciding what resources are needed, how they will be distributed and who will be in charge of carrying out each action to achieve the objectives set.
Direction. Seek to lead and motivate your team to achieve goals. To do this, use different negotiation styles in cases of internal or external conflicts and select effective communication channels.
Control. Managing a business also implies controlling all the actions that are being carried out and evaluating the results of each of these efforts.

Learning about how to run a business will determine and order its growth. Keep in mind that the key to business success lies in the constant hunger for rapid growth, but this great motivation is channeled into how a business is run.

Define your Business Model

You already know that the first key aspect to understand how to run a business from scratch is planning, right? Well, within planning, everything begins with the definition of the business model.

According to Mario Giuffra Monteverde, entrepreneur and professor of the online course Turn Ideas into Business Models, a business model is how a company makes money. A business model can be as simple as buying a product and reselling it at a certain profit margin, or as complex as creating a large production chain to add more value to a product through its transformation.

So the first thing you need to learn about running a business on a day-to-day basis is to understand:

What are your income lines?
What are your expense lines?

Whether your business is in its early stages, or whether it is a consolidated company, to know how to run a business it will always be crucial to have an open mind to be able to imagine what other lines of income you would put based on the same resources you have to manage. .

Set your SMART goals

Another fundamental aspect of planning when learning how to manage a business is the definition of SMART objectives. Here is the basis of successful management, because, in the end, you cannot determine if you are succeeding if you do not know where you want to go. SMART objectives are an acronym of English that means specific, measurable, achievable, relevant and defined in time. This methodology helps you when drawing up any plan, since they work like a compass that tells you what your north is. So if you want to learn how to run a business from scratch, set SMART goals in each of the key areas of your business:

Marketing and sales
Production and operations
Accounting and Finance
Human talent

Create a strategy to strengthen your competitive advantage

Once you have your goals clear, you need to develop a strategy for how to manage a successful business, since this is the one that allows you to land your ideas to build your competitive advantage. What is competitive advantage? They are those differentiation mechanisms that your company has with respect to your competitors. It is in this difference where you can make your customers fall in love and, consequently, earn more money, just by learning how to manage a business well.

According to Mario Giuffra Monteverde, “strategy is the joint determination of all the company’s objectives and those actions necessary to achieve them (…) It is the set of decisions and actions that allow us to maintain competitive advantage in a sustained manner in time”.

Importance of a Strategic Plan

Although there are many types of strategies that you can create within your company, such as marketing strategies, sales strategies or communication strategies, the importance of these plans to know how to manage a business lies in the fact that they answer the following questions:

How are you going to be different from your competition?
What is your added value?
How will you maintain that competitive advantage over time?

Keep in mind that both strategy and competitive advantage are not defined once and remain static over time. These evolve with respect to market trends and the moves of your competitors!

For that reason, if you want to learn how to manage a business and keep it current, Mario Giuffra Monteverde recommends maintaining an innovation strategy to constantly create new ways to differentiate yourself.

Stay up to date on competitor actions

One of the reasons why you should adopt innovation strategies is that when you implement a change to conquer your audience, your competition will react quickly to try to regain ground. That’s why keeping an eye on your competition is one of the biggest lessons in learning how to run a business.

It is important that you benchmark constantly when running a business. This will help you to know how other companies in your same field or sector are doing. In addition, it will contribute to the emergence of interesting ideas that will help you overcome them and differentiate yourself.

Therefore, seeing the actions of your competition will be useful for your strategy and to apply your actions on how to run a business. To do an effective benchmarking, Eva Klobuznik, professor at Crehana, recommends the following:

“To analyze your competitors you need to have them well identified, know what we are going to analyze from each of them and know what support tools you can count on to benchmark your competitors. In order to identify them, consider not only the one who sells the same product or service as you to be a competitor, but also the one who offers the same type of content or the one who has the same buyer persona”.

Use agility to have an efficient Business

Moving from planning to organization, so that you know how to manage a business efficiently, we recommend adopting an agile mindset in the organizational culture of your company. The reason? You see, according to Elohin Fuentes, professor at Crehana:

“The agile methodology offers a lot of flexibility, it works with iterations, with small parts of the project that are built and tested simultaneously. Taking an iterative approach makes it easier to keep projects aligned (…) and enables the release of Minimum Viable Products (MVPs). That works to get early and frequent feedback, which helps guide the team on what needs to be changed.”

The agile culture is a pillar that must reign in your business when learning how to manage a venture. This will allow you to optimize all your efforts under a context of high uncertainty, because if mistakes happen or you need to implement a change, working in an agile framework will allow you to keep your organization flexible and respond to these demands with fewer resources.

Agility has helped many large companies to stop working in the traditional way and has increased their results considerably, because it encourages a more collaborative and rapid response culture based on iteration. Therefore, if you are wondering how to manage a business, do not forget to consider agility as a transversal method in your company.

Invest to improve your Business

When you start studying how to run a business, you have to be responsible when disbursing capital. Therefore, structure a business plan where you contemplate all your long-term expenses. Also, carefully evaluate what resources you should invest in to improve your business. And if you are starting your new business, separate your personal expenses with those of your company. This will help you manage the financial situation of your business easily.

On this last point, we share with you an open class by Elaine King, financial planner and professor at Crehana, who comments on the most frequent mistakes that entrepreneurs make. Take note to learn these tips on how to run a business!

Record all your Sales at the end of the day

Planning? Check. Organization? Ready! What’s next on the quest to learn how to run a business from scratch? direction and control.

Much of the success of your company is in having clarity about each of your business transactions; that is, for what reason the money enters or leaves. In this sense, the daily sales record is an excellent tool to know how to manage a successful business.

Additionally, according to an interview conducted in Forbes Colombia with Jorge Conde, an expert in B2B sales strategy, “one of the biggest mistakes in sales worldwide is not calculating what the effort is to reach the sales quota, that is, if You don’t know what effort you have to make to meet your sales quota, nor will you be aware of the effort you have to put in to achieve it”.

Essential aspects in the registration of daily sales

You already know that, depending on the business model, in most cases the income is produced exclusively by direct sales. So, you will need to keep a daily accounting of your company that allows you to know exactly what are the quantities that you sold in a certain period, for example, a month, and understand related aspects such as:

What products or services generate more movements and what is the purchasing behavior of your customers.
How are the monthly sales compared to the previous period.
How is your inventory?
How much is your profit for that period?

Control your Inventory

In relation to the previous point, when we refer to managing a business or company, if you are dedicated to the sale of products, you will need to continuously control and monitor your inventory. By this, we mean the amount of stored products, which are available to sell.

What if you don’t have an inventory? In this case, shortage problems may arise and, consequently, losses may occur due to not making sales, not to mention that the customer experience will be anything but satisfactory. You can avoid this by learning how to run a business. In this regard, Francisco Servia, professor at Crehana, comments the following:

“It is currently estimated that to counteract the impact of a bad experience on our company’s results, and on our company in general, 12 positive experiences are needed. The reason for this is twofold: it is easier for us to talk of the negative than of the positive and, furthermore, we are more impacted by negative experiences than positive ones”.

Prepare an Income Statement

If you are wondering how to manage a business, it is important that you have clear accounts from the beginning and at all times. Good financial control will allow you to direct your business where you want. Therefore, always strive to have an organized and up-to-date income statement.

The income statement is a report with which you can evaluate the performance of your company in a given period. It allows you to identify what your expenses and your income are in order to make decisions for the future. This is crucial if you want to know how to make and analyze an income statement to run a business with Excel.

These reports will help you know if your company is being sustainable based on the information you record. And the most important thing is that it will be easier for you to show the expenses and income for the tax return; one of the biggest headaches when learning how to run a business.

Although you can make an income statement manually, one of the best ways you can manage a business or a company is with digital tools. Currently, there are several tools to manage a business.

Conventional wisdom says that to do business management and administration well, you must be strict and disciplined when it comes to sticking to your schedule. That said, having your day fully occupied, day in and day out, can be counterproductive. Don’t make your schedule so rigid that a dragging meeting or unexpected problem takes the whole day off. Instead, block out some free time throughout your schedule to give yourself a break. This makes you more available to your team and helps keep you relaxed. Basically, give your to-do list some leeway and try to avoid overloading your own time. Remember that within the basic administration for entrepreneurs it is necessary to manage your time and maximize your productivity wisely

Business Tips : How to Run a Profitable Business

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