To start a business, you need a business plan.
Contrary to popular belief, this plan is not simply a document prepared for banks and other investors. Business management in Israel depends on it.
It's also a guide to how the company will be formed and managed. Your compass, so to speak.
A business plan requires the person launching a company to examine and understand all aspects of organization and operation.
Many new business operators, carried away by the euphoria of starting their own business,
are abandoning this essential planning task on the grounds that it's not as interesting as designing a product or selling a service.
However, given that around 80 % of companies cease trading less than three years after their inception, largely due to a lack of sound planning or management, planning greatly improves the chances of success.
6 Essential aspects of business management in Israel.
Generally speaking, the six functions of business management in Israel are strategy, marketing, finance, human resources, technology and operations. Therefore, all potential entrepreneurs should apply themselves to researching and understanding these functions as they relate to their particular business.
Although the traditional Business Plan format is not designed specifically for this purpose, it can easily be adapted for research purposes.
See also: How do you write your business plan?
Researching and designing a business requires in-depth analysis of the following areas.
This important function represents, in a sense, the "brains" of your company's operations. All prospective business operators should develop vision and mission statements so that they understand what they want to achieve, why, and how to get there.
When developing a strategy, determine exactly what type of market you'll be operating in, and then carry out a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of your main competitors and your own business.
See also : Your 5-step marketing plan.
Since revenue is generated through marketing and sales, it's also important for potential entrepreneurs to know who their potential customers are, and how to reach them.
Most new business operators mistakenly adopt an "inside-out" approach to marketing, i.e. they first plan their product or service and then look for a way to sell it to a vaguely defined group "somewhere in the market".
However, this "make 'em buy 'em" approach usually results in wasted energy, fierce competition from like-minded competitors and, often, bankruptcy.
Before designing a product or service, potential company founders need to study the market and assess customer needs.
Most business plans focus on this function because they are written for the purpose of obtaining loans or investments, as well as for forecasting and budgeting purposes.
As money is the lifeblood of a company, a business manager must always know his or her financial health.
He must therefore rely on realistic cash flow forecasts, even if such forecasts are difficult to make. To do this, a manager should draw up a budget of expenses, followed by a portrait of potential revenues.
Setting up these budgets and drawing up this portrait is more complex than it looks, so don't hesitate to ask for help. The health of your company and its long-term future depend on it.
One of the mistakes managers often make is to focus solely on the financial considerations involved in hiring staff.
Yet they should place equal importance on the ability to hire, and the synergy between successful candidates and the positions to be filled. For example, some industries are facing acute labor shortages. It is therefore to the manager's advantage to understand what attracts employees and to offer them what they are looking for.
Today's managers need to treat employees like customers, and understand just as much about why they behave as they do.
Never forget that your employees are the face of your company, so select those who can show you at your best.
Technology and equipment
This function encompasses not only the equipment needed to run the business, but also issues related to communication technologies for marketing and sales purposes, or transportation.
The manager must identify his or her needs and balance them against budgetary requirements.
For example, certain pieces of equipment can be costly and be idle most of the time. It may be worthwhile for the planner to consider renting it, if necessary, or subcontracting this aspect of production to a company that owns this type of equipment.
In most start-up situations, the business owner wears many hats, including that of COO. In fact, it's often a good knowledge of an operating field that motivates most people to start their own business.
But there's a danger in this: the operator must never lose sight of the fact that he's running a business, not just being an employee.
That's why the management of all aspects of the business should be as important as the performance of the service or product.
It could also be argued that this is a common reason for business failure: the operator is comfortable "executing", and ignores other important aspects of management..