8 Essential Components to Run a Business Successfully

8 Essential Components to Run a Business Successfully:

Depending on the type of your business, there can be different organizational requirements and roles accordingly to fulfil those requirements. But there are some general commitments that comply with the needs of most of the businesses.

These are 8 essential components that will help you curate an understandable business plan. These job titles may help you breakdown the functions that are mostly needed to run a business successfully irrespective of the size of your business.

What are 8 essential components of a business plan?

8 Essential Components to Run a Business Successfully:

Finance:

Well to begin with, a requirement that is practically a “need” would be most probably “finance.” If not all (for the assumption of ignorance), still most businesses need finance to get started. And almost all expect money to roll in return. So, a department that is finance department is an integral part of any commercial business to understand monetary aspect of work following all basic economic principles.

As the founder and probably the biggest support system of your business, you need to not just sort out how to take off your business but also make sure that you have enough resources in reserve to keep it going.

You cannot just suddenly realise in the middle of somewhere that you have run out of finance. For example, you have taken more orders than your inventory can handle and now you are tripping over the idea of either losing customers/clients or arranging funds on a very short notice.

Similarly, you also need to have a rough but calculated estimation of what you are expecting in terms of revenue. So, a regulated system to track all the financial activities is a must.

As your business grows, you can always take services of a professional and dedicate an entire department at your company/business to take you forward with this function.

Here one tip would be not to rely on freelancing services for finance. In case you feel you need to get some help, try to hire people and make them a part of your team. Growing together is easier then replacing someone and then explaining the new entrant the entire dynamics of business. This will only create confusion and will also waste a lot of your precious time. 

Sales and Purchase:

If you are selling a product, either you are manufacturing it from raw material, or outsourcing the product and rebranding it, most definitely you would require to maintain the inventory. And therefore you need to make sure your inventory stock is always up to date.

Keep a track in advance of how much stock is left and how long it may last. You can document this in a record book to set reminder of when is the time to purchase new stock and also you have enough cash in hand to execute that order.

Also you need to track any change that may occur in pricing due to inflation or any sudden economic turbulence.

Similarly, register all the sales record in a logbook. See what those sales are bringing in terms of revenue. Then calculate what profits you are getting after covering all the costs and expenses. You can track your monthly, biannual and annual progress this way and see if you are underperforming or outperforming your expectations and then make changes accordingly. 

Research and Development department (R&D):

This component is somehow related to sales and purchase section. If you are manufacturing a product, you will definitely need R&D Department to keep up with all the latest developments and innovation that is taking place in your field. Also continuous research on products will help you make continuous improvement in quality of product, leading to better image of brand. 

Marketing:

Now whether you are selling a product or service; you need to let people know who you are and what you are offering. Not only that, you will also need to generate curiosity among public about your offering up to their eagerness to buy that product or services. And this purpose can be fruitfully fulfilled with the help of marketing.

A suggestion here would be to keep an eye on what conversion your marketing campaigns are bringing you. That means to evaluate if your sales target is being met through your marketing strategies, or what revenue is being generated against a certain marketing campaign and what monetary return you are getting, devise your marketing strategies accordingly.

Customer Services:

Never ever take your clients/customers and their feedback for granted. Firstly if you truly want to build a brand that would last, it is an ethical business implication to take care of your customer’s feedback. And secondly, you never know an apparently small order or service today may lead to a lucrative future alliance.      

Don’t spam, but always ask for feedback of your client/customer after each sale/service.

IT department:

The world has evolved so much and so have businesses. Now every business is inclined towards complying with technological advancement to grow. So, even if you are not in position to hire professionals to take care of that, try incorporating this department at some point in your business if you want to grow.

Again depending on your business, this will require you an IT Manager who could handle your website, promotions at digital platforms and all the digital communication of your business.

Legal Department:

This aspect is overlooked in most cases but in my opinion, it should be made on priority list of every business. Here you can take some liberty as you do not have to have a dedicated department at your company. You can always outsource services of a legal counsellor to take care of your contracts and other legal aspects of work. But in any case, consider having legal assistance at work to avoid tripping at any point of time.

Administration:

Lastly but importantly, a needful department in any business is administration. You require a proper system to make business plans, take care of execution of those business plans, management of all of business essentials mentioned above and review all the progress. Even if you are initially supposed to do it yourself, hire someone who knows this job better than you as you grow.