qprev_HBB Manual 2.qxd - Small Business BC

need to be sure there really are advantages totaking on partners or contractors. Lettingothers know the inside workings of youroperation and letting them have a piece of theaction may simply be giving away trade secretsthat your partner could copy to theiradvantage. They may see your offer as asimilar threat to their independence.• Can a network be effectively structured? –Putting together strategic alliances involvesmuch up-front organization. It may becomemore time-consuming than simply going italone. You will probably need to employ theservices of several professionals, such aslawyers and consultants, to help brokerthe deal. You may even have to translate yourcommunications if dealing in foreigncountries. Just negotiating a mutuallybeneficial agreement is one thing. Ensuring itis enforceable is another.• Is there a common goal? – Enteringpartnerships, joint ventures and subcontractingrelationships is like gettingmarried: the new entity is the sum of thestrengths and weaknesses of each party. This isthe key advantage and the source of most risk.You now become inter-dependent.Respond to ChangeOne problem with managing a business instead ofrunning it (or letting it run you) is that much ofwhat is involved in good management isinvisible. It’s easier to work with tangible things,things you can get your hands on, or to talk withsomeone about daily operations, than it is to dothe dogged brain work of managing a business.Projections and ForecastsMuch of that brain work involves looking intothe future and trying to understand how it willaffect your business.The four key projections needed for regularbusiness management are:• All the costs of producing an item or providinga service and making the business conceptavailable in the market – supplies andmaterials, time/labour, and overhead.• Marketing and distribution costs – costs ofgetting it into the hands of customers.• The operating procedures and expenses – youshould always be looking to improveefficiency because this is one way to keepcosts low and be competitive• The money situation coming in and going outof the business, daily and on a cumulativebasis over weeks and months.These four areas translate into the four mainquestions that your business plan originally setout to answer:• Business Concept: What are you selling?• Marketing: How will you get it to buyers?• Operations: How will you run your business?• Finances: Will you make money?96solutions for small business home-based business