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Marketing, as we all recognize, is a key, vital area of any business. Its function is to ensure that your products or services are in the public eye, sought after and then purchased. Proper marketing can “make a company” and if done improperly can, “break a company”.
Your organization, with its staff of one or ten thousand people, may be doing a great job of marketing but still be failing in other key areas. Marketing is vital, yet it is only one of twenty-one key areas of every business!
A business needs to manage all of its twenty-one departments, not just marketing or sales. For example, if you bring in a lot of business, yet aren’t prepared to deliver, the business will still fail. Or if you bring in lots of business and produce lots of products and then have weak quality control, your business will fail eventually. The Lincoln Continental and Cadillac were neck and neck in sales in the 1950’s. Ford Motor Company rushed to be the first of the two companies to come out with power windows. The new model was released in such a rush, that they had not gotten the bugs out of the power windows. Every owner had trouble. The dealers were recalling every one of the cars as a result. Many long time Ford customers never bought a Lincoln or a Ford again. Only, 40 years later are people buying Lincolns in large numbers again. Cadillac throughout the 60’s became the American Luxury Sedan with no competition domestically for over a decade.
When you understand all the components of you business, then you can be analyze it in much the same way that a doctor does when he gives you a full body examination. Whether you are a one-man show or have a very large staff, your company still has these 21 key areas within its seven major divisions. Each of these key areas needs to be functioning well.
There are a series of steps one goes through to do a business check up. Among the first things normally done in analyzing a business is to establish what the ideal business picture is for your business. Next, you need to determine what your short and long term goals are for the business. Then in depths study of your business (all 21 departments) is done, as it now exist. This study would then be compared to the ideal business picture. In doing this, one can pinpoint the exact key areas that need to be addressed immediately to make the actual scene look more like your ideal scene. These areas are typically the one’s that are ‘driving you crazy’ and stressing you out.
Once these areas are pinpointed, an Action Program can then be worked out and executed. An Action Program has steps that address and handle the trouble areas found. Your existing staff may do these program steps or you may elect to bring in specialists to assist in their implementation. The goal is to be in greater control over all the key areas of your business. An Action Program generated in this way and effectively executed, immediately starts relieving stress in a business.
By this time, I guess you might be asking the question: So what are these seven divisions and 21 departments? Here is a brief overview of what’s involved in a business and the areas that would need to be fully analyzed in creating an effective Action Plan for your business. Each of the seven main divisions of a business further breaks down into 3 departments, to give you a total of 21 departments in a business.
1) The Establishment Division: This division deals with personnel, communications and business ethics. Regarding personnel, we are talking about hiring, handling and basically managing personnel so that there are enough of them to do the work of the company and to ensure that they are properly allocated. Communications deals with handling the mail in and out, internal dispatches and making sure that the company keeps communicating with its customers, vendors etc and that letters from customers are not stuck in desk draws and remain unanswered.
Business ethics deals with ensuring that customers are fairly dealt with and that personnel are actually being productive on their jobs and not being a drain on the company while a few carry the entire load. Sort of like a friendly traffic cop that just makes sure that the personnel are actually doing things that are supposed to be done. The whole concept of this division is one of building the basics. Get the staff in, make sure they are trained on the basics of their job and are on their jobs, ensures that communication is taking place and that the personnel is doing what they are supposed to be doing.
2) The Sales and Marketing Division: This division deals with promotion/marketing, publications and repeat business. Promotion and marketing pieces are designed and disseminated from this area. Brochures, information packets, catalogues, newsletters and anything to get your existing clients to give you repeat business is here. Books and literature, which support your services or products, are sold here. Contacting repeat customers and making further sales is also found here. Most companies have a “gold mine” within their existing customer lists. You can typically get business from an existing client at one-fifth the cost of developing a new client. Continued contact with your existing customer base is done in this division.
3) The Finance Division: This division handles income, disbursements and financial records. The financial matters, records, assets and materiel of the company are its main functions. It is responsible for making sure that less money is spent than came in. It is this division’s responsibility to remain solvent and never (and we mean never) spend more than it makes. This division budget‘s all expenditures, including major purchases of real estate, so the company runs on internal finance. Part of budgeting is doing income planning. Budgeting also includes a required contribution to your untouchable cash reserves, which is only used as a last resort and preferably never.
Reserve accounts are funded to set aside money for payment-in-full purchases. Budgeting, properly done, ensures that a business is able to pay for everything it needs, with few exceptions. This division naturally handles payroll and banking and keep exact track of all financial and accounting records. The main objective of this area is to track and record every penny; from the instant it enters the company to the moment it leaves.
4) The Production Division: This division develops the services or products you sell. The delivery of services, scheduling, preparing and delivery is done in this area. This is where manufacturing plans, schedules and produces their products. This Division is all about creating and delivering the products and / or services that you are selling to your customers.
5) The Quality Control Division: This division sees that every product or service leaving the organization is of high quality. Customers are listened to here. Their praise, as well as their complaints are noted and paid attention to. Whenever complaints are found, they are addressed to create 100% customer satisfaction. The business area(s) involved with customer complaints are addressed and corrected quickly so integrity of services and products are maintained 100%. Most companies do not have adequate quality control. In every major failed company in history, failure was from a lack of Quality Control!
How is it that during the later part of the twentieth century a relatively small country, Japan (with no real natural resources) was able to take major portions of business away from the biggest automobile manufacturers in the world? Answer: The big guys were not listening to their customers and they had a terrible reputation for quality control. Have you ever heard the expression, ‘Fix Or Repair Daily’? Look over the first letter of each word, F O R D! There are countless examples of ‘used to be’ businesses all around us. Ford is still around, but poor quality control almost buried them.
6) The Public Division: This area delivers introductory services and products to the broad public. Information nights, mixers, and introductory lectures about some aspect of your business can all be done here. Introductory newsletters or a web site is formed around this division’s products and services. The entire objective of this division and its departments is to attract new people to your services or products. It’s all about getting out there and letting prospective people know about your services and products. This includes finding new distribution channels for the companies’ products and /or services. The basic idea is that this division brings them in and sells them initial products and services and then the Sales and Marketing division keeps them buying more and more products and / or services, into the future.
7) The Executive Division: This is the top management division. This division coordinates and supervises the activities of the company. It makes sure the company runs well, produces its products profitably and delivers its products and services to individuals and the community in abundant high quality. This is where long term planning strategy gets done for existing and new ideas. The company’s legal requirement are addressed and kept up to date and in place. The executives are ensuring good public relations are kept in as an integral part of staying in tune with the community. Additionally, senior executives meet regularly to address the financial solvency, income planning and productivity of the company. This division also ensures that it is kept well versed on the business market the company is operating in, generating policies for the company and its personnel to operate on and generally run the company in a coordinated manner.
Here’s a challenge for you. I bet that you cannot find a single aspect of any business that does not easily fit into one of these 7 major divisions as described above. If you find one, call me – I’d like to talk to you!
About the Author:
Willard Michlin is a Business Broker, California Real Estate Broker, Accountant, Well known Public speaker and Administrative/Business Consultant. He can be contacted at his Ventura, California office by calling 805-529-9854 or by e-mail at kismetrei@earthlink.net. See other articles by Willard Michlin at http://www.kismetbusinessbrokers.com |
