Successful business owners continually review their products and services to determine how their organization can continue to maintain a competitive edge.
Staying competitive with products or services goes beyond manufacturing a new widget or developing another service. The owner/manager must also examine operations from the viewpoint of the competition and the marketplace at large.
Technology
The entire team must be aware of the impact of changes in manufacturing or production techniques that could cripple existing processes. Other manufacturers may have discovered an alternative to your product that will significantly affect your ability to survive.
Management
The management team should look at target costing, just-in-time inventory management, quality control, zero defect programs and team building. Teamwork can improve productivity and can be best achieved by addressing grievances, absenteeism and employee needs as if all employees were family.
Employees
The best run organizations in the world have the most content employees. Contentment is enhanced by ensuring employees have the skills to do the job, accessible training programs to upgrade and the encouragement and motivation for continual development.
Pricing
Purchasers are increasingly price sensitive, as management knows. Although sell, sell, sell may be the key to staying afloat, selling at a cost that is too low may simply be deferring the inevitable "red ink". When setting a price, management has to consider both the present and the future. Ensure that all known overheads are included in the initial costing as well as known future costs, benefits or contingencies
Capital Requirements
The company must have the means to be flexible, to respond to changing market demands and to reduce capacity if production requirements decline. Management must ensure that debt load is manageable given a worst case scenario and that in the event of a slow down, existing working capital is sufficient to carry the business if receivable collection time extends or financing sources dry up. In addition, management should be plotting the future in light of technological advances and market changes to determine the funding required for new technology, equipment and training required to stay in the game.
The Product
Ergonomics, help lines, digitalized voices, help windows, label warnings, product grading and product or service guarantees - all of these concepts have helped businesses sell their products and services. Keep informed about the competition's products or services. Be aware of any improvements or modifications they've made that are attracting more consumers to their company. Your business may offer a superior product; however, if the potential buyer perceives that the competition's product is easier or safer to use, the chances of selling your product are reduced.
Staying in the Game
Staying in the game means more than just knowing what else is in the market place. Businesses should embark on a rolling five year strategy to constantly review technology, management, employees, pricing, capital requirements and product developments.
Logan Katz LLP has diversified client exposure, insight into the internal workings of your company, and specific financial analytical skills that can help you and your company maintain the competitive edge. Please contact us for more details on how we can assist your business.
The above provides general information only. It should not be regarded or relied upon as accounting or taxation advice or opinions. Logan Katz LLP Chartered Accountants would be pleased to provide more information or specific advice on matters of interest to you.
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