Don't rush to start a business! Read this first.

Far too often, people are so eager to start a new business or product, that they end up skipping some very important considerations. This is very likely one of the major reasons that so many new businesses fail within the first five years. Sometimes people get so excited about their idea for a new product or service, that they almost become obsessed with the idea of starting their own new business -- without really verifying if there really is a market for their new product or service in the first place. Some basic business planning can go a long way toward verifying if there's a market, and whether you're really committed to starting a new business. If you don't have the commitment to do some basic business planning, you might be fooling yourself about whether you have the commitment to start and run a business. Do some up-front, basic business planning. Most of all, knowledge and application of Managerial Economics can verify and answer some considerable questions in business planning.

The use of Managerial Economics in business planning can be very significant in the success of the venture or business. Moreover, as what the internationally renowned management expert Peter Drucker quoted, "New businesses fail usually due to poor management, not because of the idea for the business."Managerial Economics uniquely integrates the discipline to other managerial functions, including accounting, finance, human resource management, and marketing. Managerial Economics teaches how to make better business decisions, not how to build models. In a business plan all these disciplines are taken into consideration with such proper analysis and inquisition. Managerial economics will integrate all these discipline to prove a feasible and successful business plan.

Business planning is often conducted when:

• Starting a new venture (organization, product or service)

• Expanding a current organization, product or service

• Buying a current organization, product or service

• Working to improve the management of a current organization, product or service

Overall, the contents of a business plan typically aim to:

1. Describe the venture (new or current organization, product or service), often including its primary features, advantages and benefits

2. What the organization wants to do with it (buy it, expand it, etc.)

3. Justification that the plans are credible (eg, results of research that indicate the need for what the organization wants to do)

4. Marketing plans, including research results about how the venture will be marketed (eg, who the customers will be, any specific groups (or targets) of customers, why they need the venture (benefits they seek from the venture), how they will use the venture, what they will be willing to pay, how the venture will be advertised and promoted, etc.)

5. Staffing plans, including what expertise will be needed to build (sometimes included in business plans) and provide the venture on an ongoing basis

6. Management plans, including how the expertise will be organized, coordinated and led

7. Financial plans, including costs to build the venture (sometimes included in business plans), costs to operate the venture, expected revenue, budgets for each of the first several years into the future, when the venture might break-even (begin making more money overall than it has cost), etc.

All these overall aim of a business plan includes all the disciplines and functions of marketing, human resource management, accounting and finance as well as operation. The overall aim that includes marketing is the fourth one wherein, target market will be determined as well as the market positioning and advertising. The fifth and the sixth refer to the human resources management such as staffing plans and management plans. And lastly the financial plans as the function of finance and accounting. All these aims as part of the business plan will be integrated, verified and analyzed through Managerial Economics. As noted a business plan is a combination of a marketing plan, financial plan, strategic plan and a operational/management plan. Business planning usually includes a thorough examination of the idea for a new product/service, if there's really a market for it (marketing function), who the competitors are, how the idea is uniquely positioned to be competitive and noticeable (marketing), how the idea will be produced to a product/service (operation), how much it will cost, how it will be promoted (marketing), what overall goals must be accomplished, how the development and ongoing operations will be managed (operation) and what resources are needed (including money).Managerial Economics is indeed very useful in business planning. Business planning also involves strategic management. Strategic management is defined as the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s objectives. It is both future oriented and focused in long –terms. The tasks of strategic management are creation of strategic mission and vision, translating the vision to specific objectives and targets, defining and evaluating alternative strategies to achieve the objectives, implementation of the chosen strategies and lastly evaluation and reviews. Most of these tasks involve the application and knowledge of Managerial Economics most specially translation of the vision to specific objectives, defining and evaluating alternative strategies and of course in the function of evaluation and review. The application of analytical and statistical tools and methods in Managerial Economics are very significant and will prove to be very useful in outlining the plans, objectives and strategies for the business.You'll have to do more than "sense that there is a need" or claim that "it's common sense that there is a need". You'll have to have enough evidence to convince an investor or funder -- and yourself. Using managerial economics in determining the demand for the particular product or service that business will venture in, it is very important the demand curve. The DEMAND CURVE is defined as the relationship between the price of the good and the amount or quantity the consumer is willing and able to purchase in a specified time period, given constant levels of the other determinants--tastes, income, prices of related goods, expectations, and number of buyers.

It would be very useful to analyze the different determinants of finding the demand curve such as the following:

1. Price of the good

2. Taste or level of desire for the product by the buyer

3. Income of the buyer

4. Prices of related products:substitute products (directly competes with the good in the opinion of the buyer)complementary products (used with the good in the opinion of the buyer)

5. Future expectations:expected income of the buyerexpected price of the good.

6. For the total market demand (rather than Bob's individual one) the number of buyers in the market is also a determinant of the amount purchased.

To allow us to think about all of this logically and simply, we imagine each determinant by turn changing while the others do not change. We analyze, for example, a price change by assuming that the other determinants are "given" or fixed. Given an example of jeans produces by LEVIS. How many pairs of (L-501) jeans will a buyer at each possible price, if his taste for blue jeans, his income, the prices of sneakers or baggy shorts, and his expectations about future income and prices, do not change? Then when we understand the impact of price, we consider each of the other determinants by itself. We will have a convenient tool or framework to consider any combination of determinants at once.

Price is also another consideration for a business plan. It is the pricing of the product or service that the business will offer to its consumers. Again, the use of managerial economics will become very significant in this particular issue. Price is an important determinant of the quantity of a good supplied. The "Law of Supply" states that the amount offered for sale rises as the price is higher. Again using the example of Levis pair of new style of jeans, the quantity of pairs of jeans the company is willing to offer for sale rises as their price is higher primarily because they need to cover the rising costs of production in their plant. When a firm or company charges different customers different prices for the same product. For producers, the perfect world would be one in which they could charge each customer a different price: the price that each customer would be willing to pay. This would maximize PRODUCER SURPLUS. This cannot happen, not least because sellers do not know how much any individual would pay.

The ethical orientation of the business is also important in a business plan. Before starting a venture or company, it is very important to set guidelines and regulations based on and ethical dimension. The company should operate and run the business following these guidelines and operate in an ethical way. A profitable and successful business venture does not only depend on the performance and efficiency of the staff and managers but most importantly on the ethics. Of course it is always ideal to have both high performance and high ethicality but if choosing between high performance and low ethicality than high ethicality and low in performance, it is more acceptable to be high in ethicality although low in performance. This only proves that ethicality weighs more than the performance either of the firm or its employees. More so, the firm must be set as a company sensitive with the needs and feelings of its employees. Applying managerial economics and psychology of human behavior in this aspect would successfully help the business particularly in personnel or human resources management. Employees should feel a sense of satisfaction and happiness in their jobs. Satisfaction and happiness of employees is not only based on the salary that he/she receives, there are other sources of employees’ happiness and satisfaction such as harmonious relationship of employee-employer as well as their relationship between their co-employees, sense of responsibility and importance provided by the employers, benefits that go beyond monetary rewards and the feeling that the company understand their feelings and listens to their idea, suggestions and concerns. Happiness and satisfaction is relatively equal to motivation of the employees to render their full efforts and hard work in helping the company.

My Journey as a Team Leader ... a blog of my leadership training

Day 1
One statement in “Advice for new Managers” strike me the most, “ delegate tasks and responsibilities to meet the department’s objectives”. When I was a member of a team, I would always look up to my supervisor. I observe them on how they perform their duties and handle their tasks. I had a supervisor who would just delegate practically everything to us and would just take extended coffee breaks talking to his colleagues. I had a bad impression then of delegating tasks to another member. I thought that supervisors delegate tasks because they want to “escape” from doing them and that they are too lazy to do their job. During my first months as supervisor, I never delegated tasks to my members. I would try to do everything on my own but somehow this behaviour took its toll on me. I got easily burned out and was not able to meet the deadline set by my manager. I have learned the value of delegating tasks. Delegating tasks, if done correctly, can help Team Leaders in many ways. He/She will not only develop and enhance the skills of the agent but will also make the workload easier. It is just very important to communicate the objectives and purpose of delegating the task and keep the member engaged by encouraging learning and development opportunities.

Day 2
Looking into the different duties and responsibilities of a Team Leader, one may think that this is one tough of a job. A Team Leader is not only responsible to his/her own development, performance and welfare but is responsible to 15 or more individuals. He/She should know how to respect the diversity in the team, that each member is different from one another, their level of enthusiasm, source of their motivation, attitude, behaviour and career goals. As team leaders, we need to be able to adapt and be flexible to the management styles and treatment to each one of them because as they say “One size does not fit all”.

Day 3
There are situations wherein a Team Leader needs to choose between following the rules or retaining his/her people. Rules and codes are set and made for a good purpose. These rules are not made for the sole purpose of punishing and threatening the employees but to have order, stability and harmony in the office. It is important that we balance the business needs and care for the employees. A manager who just strictly follows the rules without taking into consideration the needs of the employees will never earn the respect of his/her subordinates. Same goes with a manager who is very lenient and would always yield to his/her subordinates without taking into consideration the business needs of the company.

Day 4

I learned that motivation should come from within. I can not motivate my agent to perform if they do not have self motivation. I can only encourage, inspire, coach or instruct them on things that they should do to achieve their goals.

Day 5

Coaching is one of the important tasks of a Team Leader. Through coaching, Team Leaders are able to give feedback on agent’s performance, arrest a wrong behaviour, hone agent’s skills and ultimately develop and mentor them to achieve their maximum potential.

Day 6

I aspire to become one of the black belter for Six Sigma. I wish to contribute in developing procedures that would enhance employees’ work environment geared towards job enrichment and agent satisfaction. I have a lot of initiatives in mind and have actually submitted some to my managers and senior managers. I believe that it would be helpful for me to develop these initiatives given the proper training and exposure to Six Sigma.

Day 7
Smart leaders acknowledge grapevine and use it to their advantage. As team leaders or frontline supervisors, it is our responsibility to be able to contain rumors and negative talks because this might affect the performance of the team directly or indirectly.

Day 8
I learned a lot from Attrition Management. Team Leaders attitude, bahavior and mindset has an impact on the probability of the team leader to attrite an agent. All the metrics are somehow related to attrition, this is the reason why it is very important that we are able to manage attrition. CSI, Quality and AHT for example will be affected if attrition is high because this will entail hiring new agents and training them again. The skills and learning curve of the new agents are different to the skills of tenured agents.

Day 9
My favorite topic is Performance Planning and Management. It is true that you can not manage what you can not measure. It is very important that a leader is able to set goals, metrics and developmental plans of his/her subordinates which are measurable in order to check effectivity and probability of success. In driving performance it is very important that leaders are able to map out a plan. “If you fail to plan, you plan to fail”

Day 10

Now, I realized there are so much things to learn but then again too little time.