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From Basic Concepts to Value Creation
Value creation is becoming increasing more and more important as businesses come to understand Economic Value Added (EVA). Companies who have experienced and used EVA, understand the basic criterion for management decision-making and as a parameter for "measuring" company results and their management teams.
Company experience shows that radically and positively changed results have been obtained when EVA has been adopted and applied correctly by each business unit. It is therefore necessary for every manager within the company who has responsibility for a business unit to understand value creation and how to insure core concepts of company economics are applied.
We must not forget, senior management teams have a fiduciary responsibility to their shareholders to maximize the current market value of the company. By doing so, the company, shareholders, and employees benefit greatly. As companies learn and apply EVA, in turn the overall quality and improvement in the standard of living for all will increase. It is therefore important for management to choose project that yield a positive ROI. The more effective the management team is in the use of resources and there deployment, the more economic grow will be realized for all concerned.
It should be the focus of senior managers to focus on EVA, which by definition is operating profits less the cost of all of the capital employed to produce earnings. If managers can learn to increase operating profits without tying up capital and thereby invest in only projects that will earn more than the cost of capital for those projects, then net present value of investments will increase for these projects. 5/24/2010
" Customer Acquisition Process "
Every small to medium sized business
who offers a service or product needs a “Customer Acquisition” process to attract new clients. This is not
a new requirement, it’s as old as business itself. How old is business you say? Let’s go to Google
and ask Ask.com. Japanese temple builder Kongo Gumi is the world’s oldest
continuously operating family business recorded. They were in business 1,400 years; gee I wonder if our business will
last that long, we can only hope. A temple builder in operation under the founders’
descendants since 578AD succumbed to failure in 2006. We can only ponder how a company has been able to survive for 14
centuries. Several factors contributed to Kongo Gumi’s extended existence:
What finally brought the company to its end? Two primary factors:
“To
sum up the lessons of Kongo Gumi’s long tenure and ultimate failure: Pick a stable industry and create flexible succession
policies. To avoid a similar demise, evolve as business conditions require, but don’t get carried away with temporary
enthusiasms and sacrifice financial stability for what looks like an opportunity. These lessons are somewhat contradictory
and paradoxical, to be sure. But if sustained success came easy, then all family business would have a 1, 428-year run.”
by James Olan Hutcheson Mr. Hutcheson observation and study of the Kongo Gumi’s company history helps
us understand concepts involved with success and failure. Clearly this company did many things right for centuries. We
can also see that businesses are only one or two steps away from failure. When economic
down turns in the economy occur, business needs to reflect on operational effectiveness, and look to improve performance in
all aspect of their business. One important area is “Customer Acquisition.” Implementing response driven “Customer Acquisition” campaigns are essential for maintaining lead
generation and acquiring new clients; which should not be time consuming or an expensive process. Five tangible solutions you can use to implement “Customer Acquisition” process and make marketing
simple, secure and efficient, are:
Clients find you through Social News, Social Networking, Search Engine Optimization, and your Published Content. Focus your marketing resources on campaigns and initiatives that deliver ROI; analyze trends, do market research, look at the conversion rates, evalutate the geographic locations of leads, and manage "ad word" buying for best results.
The World Wide Web
offers tremendous opportunities in providing access to information. It is important to provide content that is timely, accurate
and understandable, delivered by systems that are friendly and relatively easy to use; and in the final analysis, capable
of empowering our users to make informed decisions.
Tight Integration of
Web-CRM to capture client information allows for easy follow-up and sales promotions.
Clients who
are not ready to embrace your product or service can receive communication on a timely basis to maintain interest until they
are ready to make decision.
A repeatable sales process should be developed for your business to procure clients who have immediate requirements for their products or services.
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