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The business is an organization which produces and sells, or only sells goods or services, or both. There exist several links between a business and its ecological and social environment.
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Workers are human beings and have the right to be well treated. Most of them have a family with one or more children. They all have to live from the wage, you pay to them. Please keep in mind that the future of your country depends to a great extent on the education and the way of thinking of today’s children. Thus, pay wages which allow your workers to send their children to school. Do not abuse children as cheap workers.
Most raw materials are made from natural resources. Moreover, you may need water and air in your production process. Please keep in mind that natural resources are limited in our world. Thus, do not waste them.
A workshop not only produces goods, but it may also produce rubbish, sewage and exhaust fumes. All these things pollute or even contaminate the environment in which we are all living. Therefore, the production of rubbish, sewage and exhaust fumes should be minimized. Normal rubbish is put into a disposal. Contaminated rubbish needs special treatment, never put it into normal disposal. Sewage needs to be purified in a purification plant. Oil, solvents, dye, contaminated water and so on need special treatment, never put them into the drain. Contaminated exhaust fumes need to be filtered.
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Be a smart and modern businessman, feel responsible for the social community and the environment! |
A new business starts with a good idea and some money. Some of the money is needed to establish the workshop and to buy equipment and raw materials. Money is also used to pay the workers and operate the business until you gain enough money from selling goods.
Once the business has been established, the next step is to begin producing; raw materials must be transformed into goods by your workers. These goods are then sold and the money received from selling them is used to pay your workers and to buy new raw materials. If you have sold your goods for more than it cost you to make them, you will have made a profit. Profit can be taken out of the business in the form of withdrawals or left in the business and used to improve and enlarge the business.
A business runs through the business cycle all the time:
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The sooner you get back the money you spent on raw materials, workers’ wages and operating expenses, the sooner you will make a profit. Large stocks of raw materials and finished goods tie up money and slow down the cycle. Raw materials should be used quickly to produce goods and the finished goods should be sold as soon as possible.
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Attention All businesses keep some raw materials in stock so that production can continue without interruption. In most cases a business should keep stocks of raw materials as low as possible. However, in certain circumstances it may be necessary to keep large stocks of raw materials on hand. For example: · When the prices are high for small lots, Conclusion: The management task is to find the correct stock levels for your business. The stocks of finished goods “on hand”, and of raw materials available for production, should be large enough to meet customer demand and allow continuous production - but they should not be much larger! |
It is important to understand how a business is structured. A short description is given below of the most important areas of a business.
Production is that part of the business which is responsible for turning raw materials into goods with the help of workers and equipment. The shape, quality and quantity of the produced goods should meet customer needs. The production costs should be kept as low as possible. Specific production tasks include:
· Organization of the workshop (who produces what, how much, where and when). Trained workers are an expensive and precious resource. It is important to select persons who are the most suited for a specific job and to train them until they are as skilled as possible in their work. They should be motivated and well-treated because, output will be higher in a good working atmosphere. Their work should be organized in an efficient way to help reduce operation costs.· Quality control, wellknown high quality is the best propaganda for your products.
· Organisation of the stock.
· Operation and maintenance of the equipment.
The organization of production is not the subject of the present guide.
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The financial part of a business is that part which deals with money. The specific financial tasks are:
· Cash management (module 3).
· Managing debtors and creditors (module 3).
· Maintaining a cashbook (module 3).
· Cost control and pricing (module 4).
· Profit and loss statement and its analysis (modules 5 and 6).
The financial organization of a business is the main topic of the present guide.
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This is the component of the business structure which is responsible for making sure that the customers know about your products. One of the most important goals of the business is to fulfil your customers’ needs. The main task of marketing is therefore to find out what these needs are and how to fulfil them with products and services. The specific tasks of marketing are:
· Market studies (What do customers like? What are your competitors offering? Are there new trends in the roofing and building materials market?)· Design of the products (shape, colour, services)
· Quality and price of the products.
· Distribution channels (Direct or via retailers?)
· Promotion activities (Public relations? Expositions? Fairs? Advertising?)
· All selling activities.
Module 7 gives a brief description of the main tasks of marketing.
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There are interrelations between the areas. For example, the production section should only produce the types, quality and quantities of goods that the marketing section has determined can be sold to customers. The marketing section is limited by the marketing budget made available by the finance section and by the manufacturing capacity of the production section.
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The coordination of resources, in order to reach a specific goal in a continously changing world, is a management task. In a normal small tile business the entrepreneur himself will manage most of the business tasks described above. The entrepreneur will probably be the marketing, production, personnel and finance manager in one! As the business grows, more and more of the specific business tasks will be assigned to employees of the business.
Module 2 looks at management. The main topics are how to make decisions, how to implement them and how to do planning.
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