Make Or Mar Ability Of business Locations : Looking Beyond The Consumers

Lagos, Nigeria

A beautiful environment with basic infrastructure is good for business (Lagos, Nigeria)

In my last post on business locations, I only focused on customer considerations in deciding on where to locate a business. Even as crucial as the consumer factor is, there are quite a number of other factors to put into consideration. It thus follows that even where an area is considered as a consumer hot spot, other equally important factors might make the choice of that particular location, a big error.

One very other very important factor to consider is the availability basic infrastructure such as power, roads, communication, transportation, water and much more. I do not see a business doing very well in a location where power supply is non-existent or very unreliable. Power supply, whether hydro, gas or solar, is like blood to a business. Its absence causes a lot of problems to businesses since most business equipment need power to function. You can imagine what businesses that actually need power to render their services or sell their products, would do where there is no public power supply, or where it is unreliable.  They would definitely need to generate their own power, usually at a higher cost. This would eventually have multiple chain consequences on the business – meeting up with other business expenses might be hampered, especially salaries, asking for a raise might be an “abomination,” re-stocking might be affected which can lead to stock-outs, stock-outs deals a bad blow on sales, low sales means low profits; dwindling profits, if it persists, leads to stagnation and eventually, collapse, in severe cases. A number of businesses have packed up because of this singular factor – power!!!

Good roads and transportation are essential to business (Lagos, Nigeria)

Good roads and transportation are essential to business (Lagos, Nigeria)

The state of transportation and roads and their networking, play very vital roles in the life of businesses. Businesses that are into manufacturing and buying and selling cannot but give serious thoughts about it. This is obviously because of their frequent movement of goods, in and out of the business premises. No doubt, roads also have impact on the life span of motor vehicles and their maintenance cost. Again, these also have chain consequences on the business.

The way businesses are being run today, communication is almost as important as money in business. Technology has changed the way communication is being carried out. The level of development is not the same everywhere. In some areas, communication services, in particular, the internet is far from being developed or reliable. This kind of situation will not speed up business growth. This kind of situation would also prevent the business from meeting up with global trends.

Security is another crucial issue. Insecurity is a very is a big enemy to anybody, let alone a businesses that needs people to come around for deals to be struck. Insecurity restricts movement, creates a general feeling of fear and anxiety; and in extreme cases, reduces the number of current and potential customers through deaths, particularly in areas experiencing wars and terrorist attacks.

Another vital factor to consider is the cost of labour. Labour costs seems to take a huge chunk of running expenses. A smart way out of this is to consider areas where labour cost is cheaper. Apart from having access to more eligible workers, running cost is greatly checked.

Government policies also affect businesses. Ignoring them might make the business to be at the mercies of the government later. Policies on taxes and fees, what is legal and what are not, personnel issues, business records, business hours and much more, have effects on business. Experience has shown that the “friendliness “of these policies defers from place to place. So, if you want to start up a business or you want to relocate, you might want to find out which location would have greater friendly government policies.

A business whose daily turnover is usually on a very high side would have to be security-conscious. One smart way of doing this is to look for a location that is close to banking facilities. This enables frequent movement of cash away from the office to the banks, which is considered safer.

In addition to these, businesses that see their employees as key to the success of the businesses, would be see it very necessary to consider easy access to health facilities when making location decisions. Employees give in their best when they have a feeling of care and concern coming from their employees.

Another important factor to consider is the cleanliness of the chosen location. A dirty location poses health hazards to everyone that has something to do with the business. If the business is into food processing, a clean environment would be their best best. A dirty environment therefore keeps people away. Such businesses also run the risk of constantly having problems with government health officials.

Finally, it might also be very important to consider competitors in making location decisions. The world of business, as we have it today, is a very competitive one. Some businesses merely exist. Some have intimidating profiles and stature. Some will attract customers which eventually strike deals with rival businesses. Some are serious threats to competing businesses that make the mistake of coming so close to locate their businesses next to it. A serious appraisal must be made of these realities.

In all, together with the first part of this post, it is obvious that businesses that are very successful today have actually done their homework very well.

I sure hope this post was worth your time.

Thanks for your time.

Related posts :

Make or mar ability of business locations : The consumer factor

Small businesses’ practices and the issues stagnation and growth

Decision making : The sensitive and far-reaching function of a manager

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Make Or Mar Ability Of Business Locations : The Consumer Factor

A serene residential area

A serene residential area

The world of business is one with many rules. Those who know how to play by the rules or know how to manipulate the rules are those who are doing very well – making so much money and building very strong brands for themselves.

I have already addressed some of these rules in my post on customer loyalty, issues of stagnation and collapse, decision making, business start-up and others, under “Business and Economy” category. However, in this post, I have decided to address one of such “rules” I used to add weight to my earlier posts, as a two-part stand-alone post. The simple “rule” is that: consumers MUST be given serious consideration in business location decisions as a condition for business success !!!

I have withnessed many businesses actually groan over poor sales/patronage, apparently, for failing to consider the “power of the consumers” in business success. One big mistake therefore, is to ignore them in business location decisions. Those business simply did not ask themselves some crucial questions : how close are we to our target market? Are we where our customers are? Can our tarket market easily find us here? Does our target market know how to find us? Is our business located where our products are needed? Did we do a customer-based analysis of the location we chose?

The are no general rules guiding business location decisions. What is simply required is a product-customer and business-customer analysis, where the key factors considered are the product, the busines and their target market, before a decision is finally taken as to where the business would be located. Where these analyses are not done, the business is most likely to experience very low sales or stagnated sales. This is because the target market, which is the source of the sales were simply played down at the point of deciding where the business would be located.

So what happens where a business is “badly” located? Two of the businesses that inspired me to do this post have already relocated. One is a very low standard laundry business located in a high-brow serene residential area. The other is a recording house within the same area. Two, who are yet to move, are really complaining of very poor sales. One is a drug store and the other an electrical appliance store – all in a serene residential area where you see an average of one person per hour walking or driving by on the street.

business area

A typical commercial area

Apart from relocating, a business experiencing low turnover as a result of location problems can invest in promotional activities – advertising, sales promotion, personal selling and public relations. The fact that customers MUST be reached out to is a non-negotiable and COMPULSORY aspect of business. Everything has to be done to attract customers !!! No business opens shop to display its exquisite interior and well dressed staff. Businesses depend on customers to survive. So, going the extra mile to reach them is not a display of business acumen, but a “mission to safe a boat from sinking!” This becomes even more challenging and necessary where the business is “badly” located.

So, are you planning on starting a business, avoid “crying over spilled milk.”

Thanks for your time.

Posted from WordPress for BlackBerry.

Related posts :

Customer loyalty : A condition for business survival

Decision making: The most sensitive and far-reaching function of a manager

Can Advertisements Ever Be Totally Free From “LIES”?

A trusted brand

One of my favourite lectures is the one I have delivered countless times on “advertising.” I love the topic a lot because, apart from being very interesting, my audience have always shown excitement and interest in the topic as examples of adverts are found everywhere, including the venues of the lectures.

No doubt, adverts are indispensable tools in the success of a business. It is one tiny part of marketing which a number of businesses have invested millions and billions with the hope of recouping back amounts spent from the huge sales that is expected to arise from the adverts.

Hence, I am a strong advocate of “treat advertisement costs as investments costs” rather than as “running costs.” If you look at it critically, you will agree that advertisements are actually investments which, may, or may not yield expected returns.

Advertisement creates awareness, puts competitors in check, teaches consumers how to use the products, tells consumers where to get the products, persuades consumers to buy products, sometimes against their wishes, and hopefully, leads to improved sales and profits.

However, as good as adverts are, there is one thing I do not like about some of them – and that is the lies and deception that comes with most, if not all adverts. Well, you might want to call it “make-belief” efforts to sell a product, cos that’s actually what they are. The part of these “movies” that can be very frustrating is when an organisation tells you things (so many) that they cannot do; things that are not deliverable; things that their products are not synonymous with; promises that are far beyond their abilities; promises which greatly surpasses their capacity and current status….

This post is coming because of the frustrating experience I have been having with a particular mobile service provider (name withheld) here in Nigeria for the past four days. I actually have three lines. If each of them had kept their advert promises I would not be having three lines in the first place.

This particular service provider made me go for them through their very persuasive adverts, which have now lived up to the best way to describe adverts – “make-belief movies.” I hardly make calls with this line as calls hardly go through. And when they do, most often than not, a dropped calls’ tone is what I hear. This happens most of the time.

As at the time of putting this post together, I have not been able to get help from their ever-unreliable, and hard-to-get-through toll-free customer care center. For four days my ear drums has been subjected (annoyingly) to all sorts of “make-belief movies” … oh! I meant adverts – just to resolve a recharge card issue.

This company is not alone in this game of unkept promises. We hear, see and read about them everyday – sugar-coated appeals – most of them ending up as LIES and over-bloated promises.

So I ask : can all advertisements ever be free from deliberate lies and over-bloated promises ? Is it not possible for businesses to tell us what is feasible within their abilities and stop living in another businesses’s dreams? Would it not be better for businesses to review their adverts to reflect their current status, rather than tell us they are capable of doing what was stíll on their drawing board (or never was)?….

Well, while you ponder over my questions and annoyance, I am still considering throwing away the SIM card of this very annoying mobile service provider. Tank God for alternatives.

However, thumbs up for companies that have consistently made statements in their adverts which they have really worked hard to see those statements and claims come to reality. Some of the products of such companies are regular features in my home. Even my son (4+) appreciates good quality.

So, businesses should realise that they cannot take their customers on a false ride for too long.

Thanks for your time.

Related posts :

First impression in business 

Decision making: The most sensitive and far-reaching function of a manager

Make or mar ability of business locations : The consumer factor

Between Nepotism And Merit In Staff Selection

Image courtesy Ambro/FreeDigitalPhotos.net

Image courtesy:Ambro/FreeDigitalPhotos.net

Of all the resources available to a business organisation, the most crucial and major determinant of the success or otherwise of the business, is indisputably the human resource.

If you agree with me then you will also agree that the effectiveness of every other resource depends on the caliber of the human resource available in an organisation.

If you agree with my assertions above, then it becomes a settled issue that staffing – recruitment, selection and placement of workers – is one of the most delicate functions of the human resources department and by extension, the most delicate steps an organisation can take.

The human resource is just like a driver of a vehicle with every other resource on board the vehicle as passengers. So, their fate simply depends on how well (or not) the driver does his job.

Last Saturday  I watched a TV talk show where computer (my second love after Business Management) experts analysed the current trends in cyber crime. One of them then said something, which actually gave me the inspiration to do this post. He said a good percentage of the computer graduates we have these days cannot write a simple program !

In my 18 years of working, I have come across all sorts of workers – the good, the bad and the ugly. Some years ago an ex-colleague was fired for incompetence. Imagine an Accounting graduate that cannot reconcile a simple cash book with a bank statement. In fact he was caught with a text book on his laps. Another accounting graduate I once worked with could not prepare a Trading Account. How did they get their degrees ? Beats me! What do you expect from these members of staff?

They are not alone on this. I had to dump a particular mobile network because of a very arrogant Customer Care Officer who attended to me once when I had connection challenges. I am not the only one who has done this.

The worst cases are those staffers who are at the top echelon of business organisations. It is often said in business management, that the Management of any business organisation “dictate the atmosphere in an organisation.” If they are creative, excellent decision makers, intelligent, have foresight, innovative, excellent planners, motivators and up-to-date with current business trends, it will reflect in the affairs of the business. The reverse is sadly also true. Imagine a manager who is so old fashioned, disorganized, bad decision maker, unintelligent, acts before thinking, bad motivator, bad planner, knows next-to-nothing about creativity, innovation and current global management trends !!!

So many businesses are facing serious challenges today. While some are stagnant, some are moving at snail-speed, while some have even collapsed because of the choice of workers, especially at the management level.

A friend once told me that the major reason why one of the banks in Nigeria(name withheld) was doing so well was because of its deployment of sophisticated technology. Then I asked him a question “can technology, no matter the level of sophistication, come on board or work without human effort?” It’s simple – employ the right staff and enjoy the benefits; employ the wrong staff and watch the consequences unfold. It’s just a matter of time.

It is not different in public governance. In my opinion, one of the major reasons why the Governor of Lagos State(Nigeria), His Excellency, Governor Babatunde Raji Fashola, has performed so well is partly because of the caliber of men and women that makes up his cabinet. The other day, I watched the impressive achievements of his administration in all sectors of the economy of the state and I was so astonished because I was not aware of many of them. It’s simply a case of someone who cherishes outstanding performance gathering an outstanding team that can help him achieve his dreams for the state. Thumbs up for His Excellency and his outstanding cabinet.

My advice? Read the story of the outstanding names we have today in business (the owners and their businesses) and public administration. I do that a lot.

It’s just a matter of decision making…a matter of choices.

Thanks for your time.A

No financial records!!!?…that’s stone-age business practice!

courage-compu.jpgI once asked a business owner how much profit or loss he made in the previous year. The expression I saw on his face was typical of a mathematics class where a student is asked a question and the question becomes a serious source of confusion to the student.

His answer was expected – “honestly, I don’t know.” I asked him that question because over the years that I have known him, I have never seen him record any of his sales (I belief the same happens to the other transactions). If he does not record his sales, it will be a miracle if he is able to tell me how much profit(or loss) he made last year, or any other time for that matter.

I have also witnessed him taking delivery of stock items. Similarly, he does not use to do any recording. I call this “stone-age business practice.”

Refusal to keep record of financial transactions is common place especially among small and medium scale enterprises. Usually, their excuse has always been the same – lack of funds to employ an Accountant. This is partially true. In addition to limited funds, experience has shown that the unwillingness to separate the owner’s private purse from business’ purse makes the need for too much recording unattractive.

Another reason is the convenience that comes with not keeping proper records – just sell and dump the money some where; and simply spend without stressing your self to do any calculation or recording.

But these are surmountable. As for the problem of cash, the business owner can outsource the accounting work to an outsider, without necessarily having to employ a full timer. All that the Accountant would do is to prepare accounts that reflects the near-status and needs of the business/owner.

As for the second problem, I have always stressed the fact that a business whose purse is inter-locked with that of the owner would definitely experience retarded growth, conflict of interests/priorities, occasional financial challenges on both ends and even collapse in severe cases.

As for inconvenience, a simple book keeping (recording of financial transactions) practice is a good starter.  More complex recordings can then be introduced over time.

As I moved around everyday, I see so many business that have either remained the same year in, year out, or are just struggling to stay afloat. Get close and you discover that their likely problem is mostly reckless and i-don’t-care financial management attitude !

But the fact  is that good financial record keeping assist businesses to :

*determine profit or loss
*determine the profitability or otherwise of products traded upon
*plan ahead
*monitor and control expenses
*forecast sales
*monitor quantity of stock items
*determine total sales value
*determine the amount of debtors and creditors
*determine the total value of assets
*run costs-benefit analysis for proposed investments
*monitor your income and bank account(s)
*reconcile cash book balance with bank statement balance
*check fraud
*prove their seriousness to customers and other stakeholders.
*negotiating with workers on salary/wage increases….the benefits are endless.

What a business owner loses by not keeping proper financial records is simply the reverse of what you have read above.

No doubt, the consequences of not keeping proper records greatly outweigh the “benefits” of not keeping proper records.

So, my advice ? This is the 21st century. Move with global business trends. No matter how small your business might be.

Thanks for your time.

Related posts:

It pays to separate your private purse from your business’ purse

First impression in business

Business start up 

Small business’ practices and the issues of stagnation and collapse 

Decision making : The most far-reaching function of a manager

 

It Pays To Separate Your Private Purse From Your Business Purse

I have often been accused of allowing my Accounting and Business Management background to affect me in the way I reason, plan, and generally take decisions. One of the most popular being my often critical analysis of expenditures. They say those who have accounting background are stingy. Awww. That’s not fair !

Well, I have always argued that the quality of my actions and inactions, rather than my background, should be of top priority.

I once had an issue with a thriving business owner many years ago. It had to do with a 31-point memo I issued him upon his request. I actually did a business survey for him as he was experiencing a lull in his business. He was very impressed with all but one of my recommendations – the one that had to do with proper financial accountabilty.

I was of the strong opinion that one of the strongest enemy of his business growth, and the number one reason why his business was facing difficulties, was his refusal to strictly follow the “business entitity concept.” So many businesses, especially the SMEs (small and medium scale enterprises) are grappling with this problem.

This is an accounting concept that requires a business owner(s) to see himself as being different from the business, and that the Accountant should treat them as such. It sounds stupid for someone to tell you this. Isn’t it? Well, this is a major problem for countless businesses across the globe.

It was no surprise to me later when I heard that the company later developed serious financial problems, so much that they could not meet up with jobs given to them. Settling bills and payment of salaries became impossible and at the tail end of its crisis, the company went underground. It collapsed !

All the owner needed to do was to separate his business bank account/purse from personal bank account/purse. It also required strict recording of ALL financial transactions. That way, he would have been in constant touch with the realities of his business, and thus be able to know when he can and should not “deprive” the company of scarce business resources. It simply required financial discipline. Sadly, he was very comfortable with “the system that puts all the money on his table”.

What this translated to was for him to fix a particular amount that he can draw as salary. Salary ? Yep ! Every other money then belonged to the business – his business! Sounds odd, but financial discipline is one of the major secrets behind the enormous growth experienced by most businesses. And certainly, financial indiscipline or recklessnes is a major reason why so many businesses are experiencing stagnation, slow growth, fianancial stress and in extreme cases, business collapse!

So its a matter of choice ! Financial discipline Vs Financial indiscipline.

Thanks for your time.

 

Related posts :

Small businesses practices and the issues of stagnation and collapse

Decision making : The most far reaching function of a maanger 

Outsmart your competitors or they will kick you out of business

 

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