Incorporate Barter Into Your Business Management
As an entrepreneur your affairs may not have made headlines, but
that doesn�t mean that you don�t have to be any less zealous in your
pursuit of continuing management excellence. The fact is, management
excellence should never be viewed as the exclusive domain of large
corporations. All businesses can be the beneficiary of solid
management and planning. With this in mind, consider these
Start Your Budget At Zero
In most companies, budgets get built year by year, with owners and
managers asking themselves, �How much should I add to the budget
this year? Or (if the forecast is gloomy), �Should I subtract that
5% or 10%?� A more effective approach is called zero-based
budgeting. It is markedly different in that it requires you to start
the budget at zero, and justify every expense for inclusion in the
This way, instead of building on pockets of inefficiency, waste can
be identified and rooted out annually. Many firms are surprised at
how much deadwood they are carrying...thus draining the bottomline.
It is difficult to eliminate positions or people who have been with
your company for years. But as a business owner, you must make these
decisions based on performance and relevance � rather than on
sentimental reasons alone.
Remember, when you�re trying to downsize your business the overall
productivity improves, thereby helping to ensure long-term
viability. More productivity at a reduced cost translates into
improvements in your competitiveness and profit margin.
Another engine for increased growth and productivity is barter. Used
in a systematic, organized, and prudent manner the purchase of
needed goods and services at your barter (variable)
cost-of-doing-business will result in incremental sales that are
An important consideration to remember is this: regardless of how
astute your management efforts are, you are always faced with three
possible alternatives in your forecasting efforts.
You are right on � you hit your forecasts.
You are overly optimistic and over-produce.
You are too conservative and under-produce.
In two out of the three cases you�re off the mark, and it will cost
you. If you�re astute enough to realize that barter is a safety
valve, you can utilize it to compensate for any forecasting errors,
which is why smart management will include barter in their planning