Do you really understand your business model?
Describing what you do to someone may be one of the hardest things you do each day. If this task is hard to define and make clear to a potential customer then what does that say about your business model? Not only are entirely new business models possible, they are also necessary for survival.
Is your business model defined by how much revenue is earned within the company? Or by how many new products you can introduce to customers a month? Or can it be the number of clicks you receive daily on social media. Sources have defined a good business model as a big picture that captures a snapshot of the enterprise and communicates direction and goals to all stakeholders.
Whether you are a business owner just getting started or reinventing the structure of your business allow time for breaking down your business model into components that give an operation definition. Let the message be clear internally and externally as this will support in building a business following and the overall identity of the business. This model may include elements that describe the organization's unique culture such as,
Let's not forget industry competitors or suppliers in the design of your business model. Two businesses that sell the same product or service but can have quite different business models. Many types of business models exist but as a unique business leader which features will you develop?
As part of your planning or updating phase here are just a few business models to consider:
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Source: Reinventing Your Business Model
As a business owner it is an unpleasant fact of business that some customers will shoplift, some vendors and suppliers overcharge, some employees embezzle or steal assets, and some partners commit fraud against the business. None of this is new news but it is low priority news for small medium business owners. To protect against these threats, a small business should put into place and vigorously enforce internal controls.
Monitoring the internal control system is used to locate weaknesses and improve controls. Monitoring often includes observing employee behavior and accounting system for indicators of control problems. Some indicators are below:
Warning signs with regard to people:
Evaluation of controls are often performed too late. Establish your policies and procedures to ensure a reference guide for your employees and also for management so that they understand and have additional assurance on how the financial statements are being prepared. Fontenot & Associates Solutions LLC offers unique solutions for your business, visit our website to learn more and start today.
Various precautions can be established to prevent or at least minimize losses from all types of dishonesty!
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