I find this video very insightful. Ram Charan author of numerous best sellers is the main feature of this video and he discusses 5 Building Blocks in Running A Successful Business. The building blocks are:
Cash
Cash is king. In business this principle is very much true we have to have cash and know where in our business do we generate cash. A business model is only effective if all members of the organization know how to generate cash or source cash in this particular business.
Margin
You have to create a very good profit margin to make a profitable business. Profit margin is gross sales less cost, and a sustainable business creates a good Profit margin.
Velocity
This is about cash flow. Velocity dictates that the cash that goes in to your company must be faster and greater than the cash that goes out of your company. There are a lot of stories of failed business that show why even if the company has a great product and service if the cash going out is greater that the cash going in then it will eventually fold-up.
Growth
There must be a sustained growth every month and every year. But a caveat it must be a profitable growth, this can only happen if we innovate our products and services. If we become complacent this will spell the END OF OUR COMPANY.
Customers
You got to know your customers. If you do not know why the buy your products and services, you will not be able to create a repeat business out of it. This will give you a big problem in the long run. Successful companies understand their customers according to Ram.
If you want to understand more you may watch the video of Ram about shop keeper’s mentality. I guarantee you will like and learn big time from it. If you want to listen to Ram in person you may catch him this September 29, 2011 at New World Hotel, call tel. nol. 643-3887.
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