Business Process Management and Six Sigma: Why Neither Can Stand Alone

What is Business Process Management (BPM)?

BPM is a comprehensive methodology that helps design and maintains all aspects of an organization with the sole purpose of meeting and/or exceeding their customer's wants and needs both effectively and efficiently. BPM attempts to continuously improve the business processes either in incremental steps or with radical changes. One way or the other, such ambitious endeavors requires equipping BPM practitioners with powerful computerized tools and an overarching infrastructure to enable a wide range of problem solving solutions. BPM tools can be classified in four groups:

(a) Strategy - utilizing tools like environmental influence and goal models, problem and opportunities models;
(b) Analysis - using tools like business interaction models, organization and communication models, and process simulation;
(c) Design - workflow and process models, use case and event models; (d) Implementation / Execution - creating sequence and operation models, business classes and system models.

Business Process Management and Six Sigma: Why Neither Can Stand Alone

BPM is a combination of these tools (and some more) helping the business to document, understand, measure and improve their business processes. BPM help to create well documented and streamlined processes, which are essential to ensure consistency, traceability and focus towards shared strategy and performance goals.

What is Lean Six Sigma (SS)?

Six Sigma (or its newer offspring Lean Six Sigma, LSS) is also a comprehensive and highly disciplined methodology that helps us focus on developing and delivering near-perfect products and services, by analyzing the underlying business processes and preventing and / or removing defects before reaching the customer. LSS also is a wide range tool set that is used under organized the following "problem- solving" cuasi sequential steps:

(a) Define -some of the deliverables in this step are project charters, CTQs, house of quality, Kano models;
(b) Measure - statistical descriptive and graphical tools, process and value stream mapping, capability analysis, data gathering tools;
(c) Analyze -statistical analysis tools, brainstorming, Pugh matrices, House of Quality (QFD),FMEA, Muda;
(d) Improve - Pugh matrices, mistake proofing, 5S, design of experiments; (e) Control - Process Control plans and Statistical Process Control (SPC).

Given the different origins, skill sets and backgrounds of a "typical" BPM and "typical" Lean Six Sigma practitioner, there are some deployment facts working against both methodologies:

1. Lack of knowledge of each other: Most BPM teams and BPM Software Companies know very little about Lean Six Sigma and vice versa. BPM traditionally has been used and deployed as an information technology effort. LSS has been viewed as an operational tool for manufacturing and / or back office processes, not software development.

2. BPM is almost all the time accompanied by an enterprise-wide software tool, and requires a software vendor on a periodical basis for training, new releases, technical support, etc.

3. BPM is usually deployed as a technology management direction or from higher up management levels. 4. Six Sigma and Lean have been for the most part manufacturing efforts; and most recently operations management directives. As a foot note, some of the most successful Six Sigma deployments were executive management mandates (Motorola, Allied, Bank of America, to mention a few).

5. Six Sigma tools do not have a large technology foot print, with software requirements mostly at some of the organization's desktops. Its deployment is typically driven at the beginning by consulting organizations and then passes to internal resources (a Program Office is a typical modus operandi).

6. Neither BPM nor Lean Six Sigma specialist is traditional a Change and Integration Management expert or trained specialist. This knowledge vacuum causes hiccups in the deployment and acceptance of either methodology by the stakeholders.

7. Neither BPM nor Six Sigma have an integrated data collection tool, creating always a delay in data gathering which hampers a quick deployment and execution. Both rely on a third party layer to perform data gathering and data readying for analysis.

What does BPM lack?

BPM tools are very effective in creating business interactions and communications models, mapping processes and workflows, as well as capturing key metrics and resources relevant to those processes. However, many BPM teams struggle to understand which processes are the top priority for the business and which defects are the most critical to solve for any given process. BPM lacks of quantitative ranking methods and statistical tools to prove significance. Teams sometimes use a series of "hunches" and past experiences to decide how prioritize design and implementation strategies for new or improved processes. LSS has much to offer BPM teams in this area - through tools like Failure Mode Effect Analysis (FMEA), risk prioritization index and Value Stream Mapping (VSM). So, conceptually, BPM and LSS should be a great fit.

BPM is also a thin methodology to monitor the sustainability of any process change after implementation of such changes. Once process changes have been deployed, a project is closed and the consultant systems analyst goes home, or starts a new project. Tools like statistical process control and non-existent in the BPM tool set, leaving the operational leadership with (maybe) a wealth of reports, at best real-time. LSS offers via SPC, a wealth of proven and robust tools specifically tailored to particular quantitative variables; designed to monitor stability, trending and within control operational status.

BPM tools allows for storage of key data and key metrics for the different artifacts that are created and used in a project. However, does not allow for a strong statistical analysis of the data. As a matter of fact, most of the BPM data stores are for simple figures (like an average), curtailing itself for a more accurate data analysis, like hypothesis testing or a regression model to forecast future process performance. And the few software tools equipped with discrete or Monte Carlo simulators are rarely deployed.

What does Six Sigma lack?

By definition and key to its success, LSS tackles specific defects in a specific set of operations within a specific business process. This approach is very effective in eliminating defects. However, in general LSS lacks of a wealth of enterprise-wide view of the organization strategy, objective and goals, its actors and the organization surroundings. This is an area where BPM has a very strong showing. So, conceptually, BPM and LSS should be a great fit.

Lean Six Sigma also falls short when tries to incorporate tools for computer automation and information technology designs (both vital is most of our business processes with high integration and automation). BPM lends a helpful hand with use cases, event modeling, business class models, subtype and package models. Conceptually, again BPM and LSS should be a great fit.

It becomes very apparent that Six Sigma Lean and Business Process Management (BPM) neither can stand alone. Organizations that master the integration of both will have a higher rate of financial success when designing and implementing process to take any organization for a closer level of customer satisfaction and global competition.

What both methodologies lack?

BPM or LSS do not consider Change nor Integration Management or any of its derivatives when communicating changes to their stakeholders and much less to their customers. These important aspects of buying into the changes and managing smooth transitions and changes are not considered at all in any project plan, or are left to the assumed knowledge of the project manager.

The last section of this paper will present actionable tips to both BPM and Six Sigma practitioners to counter any natural resistance to change that will typically emerge from any organization when facing changes.

Core Reasons why companies don't want to implement BPM

In our experience these are the top reasons as of why there is no need for a formal BPM approach to process problem solving:

1. We have so much low hanging fruit that we know already what to do and where to start, we don't need a Business Process Architecture
2. Mapping out Processes slow things down, and is really over engineering our processes
3. We need savings now and don't have time to map out all of our processes
4. Why don't we just work on Process Control?
5. We don't know how to do Process Owners but we know how to improve processes, we've improved them before, and we can do it again.

If you are a Six Sigma Lean Resource and want a rapid tip to overcome BPM Resistance

- One can help frame Six Sigma DMAIC project or initiatives in the larger organization strategy context by quickly leveraging BPM's communication models, opportunity models, business interaction models, etc. as part of the analysis phase of DMAIC.

- BPM tools with the appropriate team of analysts and subject matter experts can create process maps and workflows in working sessions on average under one day of duration.

- Business Interaction Models show more strategic views than the conventional process model utilized in LSS.

- Opportunity models are a powerful tool to quickly establish and detect any missing component or gaps in the deployment of multiple DMAIV projects.

- At Metaspire, we develop current and future Business Interaction Models (BIMs) to scope the work for the current organization leading to the future BIM indicating how the various elements of the organization would interact in the future. Without these BIMs, we have seen duplication of efforts and the change one department was hoping for, quickly becomes undone by another department or conflicting priorities or initiatives.

Core Reasons why companies don't want to implement Lean SS

During our consulting activities some of the reasons as of why there is no need for a LSS implementation:

1. Didn't Six Sigma bring down Motorola and became non-competitive - too cumbersome
2. Six Sigma has little to offer and the tools and methods can be found elsewhere
3. Six Sigma stifles creativity and innovation
4. It's too expensive and too slow to implement
5. Too much specialized training and high maintenance of the six sigma group
6. Sounds to me like it would introduce too much bureaucracy
7. I don't understand why I need it in the first place

If you are a Process Improvement Resource and want a rapid tip to overcome Lean SS Resistance

- Motorola's Six Sigma methodology has now reached what internally is called Second Generation Motorola Six Sigma, with a process for governance, moving the tool from counting defects in manufacturing processes to an overall business improvement methodology, and in 2006 started Motorola Lean transformation and Software Design for Six Sigma. Thereby integrating Six Sigma tools with Business Process Management mindset.

- It is true that Six Sigma have incorporated tools that have been useful in previous quality initiatives (nothing wrong with that). However, the older methods do not magnify the impact of defects using millions of opportunities as a measure of quality, nor move from the traditional three-sigma to our six-sigma as a goal of perfection. Under Six Sigma, defect and defectives counts provide tangible, measurable results that we can use. Rather than being too costly, Six Sigma detractors are very unaware or ignorant of the cost of poor quality (COPQ) in their organizations. They have no baseline, and therefore any number is a high figure. A well-documented fact is that average companies perform at a 3 to 3.5 sigma level, with a COPQ ranging between 24% - 40% of their sales. Companies performing at a 5 sigma level lower their COPQ between 5% - 10% of their sales.

- Six Sigma consultants can bring the expertise for a quick proof of concept of LSS effectiveness within the organization. They will help to determine and prioritize any apparent low hanging fruits.

- Six Sigma is a business process improvement methodology, and unless deployed within a BPM architecture, has a hard time supporting strategic decision making. We can have a near perfection, defect free process producing Chocolate Cupcakes, and still the company will go down as the horse Chocolate Cupcakes market vanishes (God Forbid!).

- Best approaches to LSS deployment happens when the operations staff -project managers, supervisors, managers, directors are the six sigma practitioners. They continue to perform their traditional job related functions, but now they have a quantitative and statistical thinking and they decisions are supported with data facts.

- Often times, companies have a multitude of disparate measures and metrics. The Lean SS tool "House of Quality", helps companies focus on identifying customer requirements, where improvement is needed to meet or leapfrog competition, and strategies for making those improvements. As a result of this exercise core customer process measures and metrics are identified and can be re-weighted with a higher significance or introduced to the company.

- Why use Six Sigma at all? Most companies gather data and perform statistical analysis and forecasting of some sort, why not use statistically significant tools from Six Sigma to outperform your competitors? Six Sigma tools answer questions like: How do I know that I am measuring the right thing? How do I know that we are satisfying Customers and Shareholders? How can I measure and report the right processes? How do I stop defects before they occur? Six Sigma offers 10-12 tools where you can pick the right tools for the right question.

To summarize, BPM assists with organizational strategy whereas LSS assists with tactical improvement; and the most of the times forgotten Change Management component helps with the education, organizational development, integration and sustainability to operationalize changes.

Metaspire Approach Metaspire leads clients through an objective facilitation process. As a result our clients will not only have an aligned view on the low hanging fruit definitions, we also help the group align on priorities.

Do you need help with Six Sigma Lean, Business Process Management or Change Management?

We can help trim processes, control costs and improve profitability and operationalize changes.

Business Process Management and Six Sigma: Why Neither Can Stand Alone
Check For The New Release in Health, Fitness & Dieting Category of Books NOW!
Check What Are The Top Cooking Books in Last 90 Days Best Cheap Deal!
Check For Cookbooks Best Sellers 2012 Discount OFFER!
Check for Top 100 Most Popular Books People Are Buying Daily Price Update!
Check For 100 New Release & BestSeller Books For Your Collection

Nina Segura B.S., M.A., CSSBB
Metaspire Consulting - "Performance improvement from strategy to execution."
Web: http://www.metaspireconsulting.com/
Our Whitepapers: http://www.metaspireconsulting.com/white_papers

"I think a major act of leadership right now, call it a radical act, is to create the places and processes so people can actually learn together, using our experiences." Margaret J. Wheatley

Business Process Management and Six Sigma: Why Neither Can Stand Alone

What is Business Process Management (BPM)?

BPM is a comprehensive methodology that helps design and maintains all aspects of an organization with the sole purpose of meeting and/or exceeding their customer's wants and needs both effectively and efficiently. BPM attempts to continuously improve the business processes either in incremental steps or with radical changes. One way or the other, such ambitious endeavors requires equipping BPM practitioners with powerful computerized tools and an overarching infrastructure to enable a wide range of problem solving solutions. BPM tools can be classified in four groups:

(a) Strategy - utilizing tools like environmental influence and goal models, problem and opportunities models;
(b) Analysis - using tools like business interaction models, organization and communication models, and process simulation;
(c) Design - workflow and process models, use case and event models; (d) Implementation / Execution - creating sequence and operation models, business classes and system models.

Business Process Management and Six Sigma: Why Neither Can Stand Alone

BPM is a combination of these tools (and some more) helping the business to document, understand, measure and improve their business processes. BPM help to create well documented and streamlined processes, which are essential to ensure consistency, traceability and focus towards shared strategy and performance goals.

What is Lean Six Sigma (SS)?

Six Sigma (or its newer offspring Lean Six Sigma, LSS) is also a comprehensive and highly disciplined methodology that helps us focus on developing and delivering near-perfect products and services, by analyzing the underlying business processes and preventing and / or removing defects before reaching the customer. LSS also is a wide range tool set that is used under organized the following "problem- solving" cuasi sequential steps:

(a) Define -some of the deliverables in this step are project charters, CTQs, house of quality, Kano models;
(b) Measure - statistical descriptive and graphical tools, process and value stream mapping, capability analysis, data gathering tools;
(c) Analyze -statistical analysis tools, brainstorming, Pugh matrices, House of Quality (QFD),FMEA, Muda;
(d) Improve - Pugh matrices, mistake proofing, 5S, design of experiments; (e) Control - Process Control plans and Statistical Process Control (SPC).

Given the different origins, skill sets and backgrounds of a "typical" BPM and "typical" Lean Six Sigma practitioner, there are some deployment facts working against both methodologies:

1. Lack of knowledge of each other: Most BPM teams and BPM Software Companies know very little about Lean Six Sigma and vice versa. BPM traditionally has been used and deployed as an information technology effort. LSS has been viewed as an operational tool for manufacturing and / or back office processes, not software development.

2. BPM is almost all the time accompanied by an enterprise-wide software tool, and requires a software vendor on a periodical basis for training, new releases, technical support, etc.

3. BPM is usually deployed as a technology management direction or from higher up management levels. 4. Six Sigma and Lean have been for the most part manufacturing efforts; and most recently operations management directives. As a foot note, some of the most successful Six Sigma deployments were executive management mandates (Motorola, Allied, Bank of America, to mention a few).

5. Six Sigma tools do not have a large technology foot print, with software requirements mostly at some of the organization's desktops. Its deployment is typically driven at the beginning by consulting organizations and then passes to internal resources (a Program Office is a typical modus operandi).

6. Neither BPM nor Lean Six Sigma specialist is traditional a Change and Integration Management expert or trained specialist. This knowledge vacuum causes hiccups in the deployment and acceptance of either methodology by the stakeholders.

7. Neither BPM nor Six Sigma have an integrated data collection tool, creating always a delay in data gathering which hampers a quick deployment and execution. Both rely on a third party layer to perform data gathering and data readying for analysis.

What does BPM lack?

BPM tools are very effective in creating business interactions and communications models, mapping processes and workflows, as well as capturing key metrics and resources relevant to those processes. However, many BPM teams struggle to understand which processes are the top priority for the business and which defects are the most critical to solve for any given process. BPM lacks of quantitative ranking methods and statistical tools to prove significance. Teams sometimes use a series of "hunches" and past experiences to decide how prioritize design and implementation strategies for new or improved processes. LSS has much to offer BPM teams in this area - through tools like Failure Mode Effect Analysis (FMEA), risk prioritization index and Value Stream Mapping (VSM). So, conceptually, BPM and LSS should be a great fit.

BPM is also a thin methodology to monitor the sustainability of any process change after implementation of such changes. Once process changes have been deployed, a project is closed and the consultant systems analyst goes home, or starts a new project. Tools like statistical process control and non-existent in the BPM tool set, leaving the operational leadership with (maybe) a wealth of reports, at best real-time. LSS offers via SPC, a wealth of proven and robust tools specifically tailored to particular quantitative variables; designed to monitor stability, trending and within control operational status.

BPM tools allows for storage of key data and key metrics for the different artifacts that are created and used in a project. However, does not allow for a strong statistical analysis of the data. As a matter of fact, most of the BPM data stores are for simple figures (like an average), curtailing itself for a more accurate data analysis, like hypothesis testing or a regression model to forecast future process performance. And the few software tools equipped with discrete or Monte Carlo simulators are rarely deployed.

What does Six Sigma lack?

By definition and key to its success, LSS tackles specific defects in a specific set of operations within a specific business process. This approach is very effective in eliminating defects. However, in general LSS lacks of a wealth of enterprise-wide view of the organization strategy, objective and goals, its actors and the organization surroundings. This is an area where BPM has a very strong showing. So, conceptually, BPM and LSS should be a great fit.

Lean Six Sigma also falls short when tries to incorporate tools for computer automation and information technology designs (both vital is most of our business processes with high integration and automation). BPM lends a helpful hand with use cases, event modeling, business class models, subtype and package models. Conceptually, again BPM and LSS should be a great fit.

It becomes very apparent that Six Sigma Lean and Business Process Management (BPM) neither can stand alone. Organizations that master the integration of both will have a higher rate of financial success when designing and implementing process to take any organization for a closer level of customer satisfaction and global competition.

What both methodologies lack?

BPM or LSS do not consider Change nor Integration Management or any of its derivatives when communicating changes to their stakeholders and much less to their customers. These important aspects of buying into the changes and managing smooth transitions and changes are not considered at all in any project plan, or are left to the assumed knowledge of the project manager.

The last section of this paper will present actionable tips to both BPM and Six Sigma practitioners to counter any natural resistance to change that will typically emerge from any organization when facing changes.

Core Reasons why companies don't want to implement BPM

In our experience these are the top reasons as of why there is no need for a formal BPM approach to process problem solving:

1. We have so much low hanging fruit that we know already what to do and where to start, we don't need a Business Process Architecture
2. Mapping out Processes slow things down, and is really over engineering our processes
3. We need savings now and don't have time to map out all of our processes
4. Why don't we just work on Process Control?
5. We don't know how to do Process Owners but we know how to improve processes, we've improved them before, and we can do it again.

If you are a Six Sigma Lean Resource and want a rapid tip to overcome BPM Resistance

- One can help frame Six Sigma DMAIC project or initiatives in the larger organization strategy context by quickly leveraging BPM's communication models, opportunity models, business interaction models, etc. as part of the analysis phase of DMAIC.

- BPM tools with the appropriate team of analysts and subject matter experts can create process maps and workflows in working sessions on average under one day of duration.

- Business Interaction Models show more strategic views than the conventional process model utilized in LSS.

- Opportunity models are a powerful tool to quickly establish and detect any missing component or gaps in the deployment of multiple DMAIV projects.

- At Metaspire, we develop current and future Business Interaction Models (BIMs) to scope the work for the current organization leading to the future BIM indicating how the various elements of the organization would interact in the future. Without these BIMs, we have seen duplication of efforts and the change one department was hoping for, quickly becomes undone by another department or conflicting priorities or initiatives.

Core Reasons why companies don't want to implement Lean SS

During our consulting activities some of the reasons as of why there is no need for a LSS implementation:

1. Didn't Six Sigma bring down Motorola and became non-competitive - too cumbersome
2. Six Sigma has little to offer and the tools and methods can be found elsewhere
3. Six Sigma stifles creativity and innovation
4. It's too expensive and too slow to implement
5. Too much specialized training and high maintenance of the six sigma group
6. Sounds to me like it would introduce too much bureaucracy
7. I don't understand why I need it in the first place

If you are a Process Improvement Resource and want a rapid tip to overcome Lean SS Resistance

- Motorola's Six Sigma methodology has now reached what internally is called Second Generation Motorola Six Sigma, with a process for governance, moving the tool from counting defects in manufacturing processes to an overall business improvement methodology, and in 2006 started Motorola Lean transformation and Software Design for Six Sigma. Thereby integrating Six Sigma tools with Business Process Management mindset.

- It is true that Six Sigma have incorporated tools that have been useful in previous quality initiatives (nothing wrong with that). However, the older methods do not magnify the impact of defects using millions of opportunities as a measure of quality, nor move from the traditional three-sigma to our six-sigma as a goal of perfection. Under Six Sigma, defect and defectives counts provide tangible, measurable results that we can use. Rather than being too costly, Six Sigma detractors are very unaware or ignorant of the cost of poor quality (COPQ) in their organizations. They have no baseline, and therefore any number is a high figure. A well-documented fact is that average companies perform at a 3 to 3.5 sigma level, with a COPQ ranging between 24% - 40% of their sales. Companies performing at a 5 sigma level lower their COPQ between 5% - 10% of their sales.

- Six Sigma consultants can bring the expertise for a quick proof of concept of LSS effectiveness within the organization. They will help to determine and prioritize any apparent low hanging fruits.

- Six Sigma is a business process improvement methodology, and unless deployed within a BPM architecture, has a hard time supporting strategic decision making. We can have a near perfection, defect free process producing Chocolate Cupcakes, and still the company will go down as the horse Chocolate Cupcakes market vanishes (God Forbid!).

- Best approaches to LSS deployment happens when the operations staff -project managers, supervisors, managers, directors are the six sigma practitioners. They continue to perform their traditional job related functions, but now they have a quantitative and statistical thinking and they decisions are supported with data facts.

- Often times, companies have a multitude of disparate measures and metrics. The Lean SS tool "House of Quality", helps companies focus on identifying customer requirements, where improvement is needed to meet or leapfrog competition, and strategies for making those improvements. As a result of this exercise core customer process measures and metrics are identified and can be re-weighted with a higher significance or introduced to the company.

- Why use Six Sigma at all? Most companies gather data and perform statistical analysis and forecasting of some sort, why not use statistically significant tools from Six Sigma to outperform your competitors? Six Sigma tools answer questions like: How do I know that I am measuring the right thing? How do I know that we are satisfying Customers and Shareholders? How can I measure and report the right processes? How do I stop defects before they occur? Six Sigma offers 10-12 tools where you can pick the right tools for the right question.

To summarize, BPM assists with organizational strategy whereas LSS assists with tactical improvement; and the most of the times forgotten Change Management component helps with the education, organizational development, integration and sustainability to operationalize changes.

Metaspire Approach Metaspire leads clients through an objective facilitation process. As a result our clients will not only have an aligned view on the low hanging fruit definitions, we also help the group align on priorities.

Do you need help with Six Sigma Lean, Business Process Management or Change Management?

We can help trim processes, control costs and improve profitability and operationalize changes.

Business Process Management and Six Sigma: Why Neither Can Stand Alone
Check For The New Release in Health, Fitness & Dieting Category of Books NOW!
Check What Are The Top Cooking Books in Last 90 Days Best Cheap Deal!
Check For Cookbooks Best Sellers 2012 Discount OFFER!
Check for Top 100 Most Popular Books People Are Buying Daily Price Update!
Check For 100 New Release & BestSeller Books For Your Collection

Nina Segura B.S., M.A., CSSBB
Metaspire Consulting - "Performance improvement from strategy to execution."
Web: http://www.metaspireconsulting.com/
Our Whitepapers: http://www.metaspireconsulting.com/white_papers

"I think a major act of leadership right now, call it a radical act, is to create the places and processes so people can actually learn together, using our experiences." Margaret J. Wheatley

Risk Management in Business

In everything that we do there is always a certain amount of risk. An individual cannot achieve his goals without risking something. The same is true in business. No matter what the nature of the business there is always risk. We cannot totally eliminate risk in business but we can control it. This is what we term as risk management.

Risk management plays a crucial role in business and knowing how to calculate and handle these risks can keep your business safe and healthy. Having your own business can be a lot better and beneficial than being someone else's employee but it does carry some risks. Starting your own business does not assure you that your business will succeed, let alone grow. So how do you manage your risk? You can start by educating yourself about the business that you want to venture into. Having a clear understanding and knowledge of how to properly start the business and how to manage it properly is a good place to start. Next, you would want to assess your risk should you go into business. You have to identify the potential problems that you might encounter once your business is operational already. By doing so you will be able to prepare a contingency plan for it long before it happens. You'll need to identify the different government agencies and bureaus that are directly concerned with your business. You would also want to learn about business law, especially those which directly affect your business. The more you know about the laws concerning your venture the better off you will be. The more potential problems you identify and the more contingency plans you have the lower the risk.

How do you calculate risk? There's no specific formula for calculating risk in business. The same means does not assure you of the same outcome all the time. Every time you start a business even if you've had the same type of business before does not assure you that you will be facing the exact same problems as you did in your previous business. Every venture will present you a unique set of problems plus the problems you've encountered before. Calculating your risk is like an educated estimate. You try to identify your problems and you prepare your contingency plans; for every potential problem you identify you would like to have at least more than one solution. It's always better to have a plan B when plan A fails. Think of it as an emergency parachute when your main chute fails. Your potential problems will range from finances, to personnel, to marketing to operations and more. These are some of the factors that comprise your risk as you go into business.

Risk Management in Business

In general terms, the smaller the capital, the smaller the risk and the larger the capital, the higher the risk; your risk factor grows relative to your capitalization. On the other hand however, high risk ventures also mean high returns should the venture turn out well. It is essential that you conduct a proper feasibility study before you start project development. A feasibility study is a good way to assess your risk as well as find out if your idea is feasible. So you start with an idea, you conduct a feasibility study and then you assess your risk. Now that you've assessed your risk, you can start to manage it.

Risk Management in Business
Check For The New Release in Health, Fitness & Dieting Category of Books NOW!
Check What Are The Top Cooking Books in Last 90 Days Best Cheap Deal!
Check For Cookbooks Best Sellers 2012 Discount OFFER!
Check for Top 100 Most Popular Books People Are Buying Daily Price Update!
Check For 100 New Release & BestSeller Books For Your Collection

Neoko Cortwell is a freelance writer and web designer. If you want to start your own creative journey to becoming a freelance designer yourself, see these tutorial videos.

Visit her website if you'd like to know more.

7 Tips for Business Start-Ups

According to learned economists and others, we have been in a recession since late 2007. As this article is being written in mid-2009, the economy is not well. Businesses are cutting back, if not closing. General Motors and Chrysler, once pillars of American industry have both filed for bankruptcy and employment is the worst that it has been in decades. Projections for at least the next year suggest that things will probably get worse before we see any improvement. So, with things looking so bleak why would anyone consider starting their own business now?

Well, the quick answer is that maybe they wouldn't. But let's look a little further into this environment that we all presently find ourselves in. First, for most of us we can pretty much forget about job security. The days of having a cradle-to-grave job are but a faint memory. Companies are looking for ways to scale back and, as a result, many jobs are being eliminated. The sad reality is that your job could be the next to go. Today's jobless ranks are sky-rocketing.

Whether we are fortunate to have a job, or if we have recently been laid off, it has never been more important than now to have a plan for how we can continue to earn income. For more and more of us, this plan starts with a decision to start a business and continues with research into what products or services are needed by the buying public. The fact is that people are going to need products and services regardless of what the economic climate is. We need to educate ourselves as to what those needs are. And they don't necessarily have to be something new. If you can come up with a product or service that is better, faster or cheaper than what the competition is offering, this could lead to a successful business in good times or bad.

7 Tips for Business Start-Ups

A lot has been written about so-called recession-proof businesses. Everything from ice cream to diapers, to alcohol, to video games, to discount retail stores are considered recession-proof types of businesses by many. The fact is, you don't need to spin your wheels looking for that perfect recession-proof business to start. You just need to do your homework, find something you would like to do and do it better, faster or cheaper than others are doing it.

Use the Internet
As part of doing your homework, don't be afraid to use the Internet; particularly Google. Do a search on start-up businesses, home-based businesses and recession-proof businesses. At the very least, your research will get your creative juices flowing. But remember, it's just a start to the research you should do. Don't be quick to jump on something that you have not fully researched.

Go Slow, Be Small
Once you have found a business opportunity that you are convinced that you want to pursue, go for it. But, to the extent possible, take it slow and start small. Don't put a lot of money at risk. This is good advice anytime for budding business start-ups and it is particularly true in a less than desirable economy.

Finance It Yourself
The fact is, that in the present economy bank business loans of any type are fairly non-existent. If at all possible, finance your start-up yourself. Use your own money, either from savings, retirement or family. Don't fall to the temptation of using credit cards to finance your business. Believe me, using plastic will be very tempting. Don't do it if you don't have to. And if you do use them, plan to pay off the balance monthly. I cannot state this too strongly. This is a hole into which you do not want to fall. It could ruin your business before you gain the fruits of your own success.

Keep Your Costs To A Minimum
This dovetails with my suggestion that you start small. Depending on the type of business that you have decided on, there will be items of expense that you may want, and those that you need. When just starting out, it is critical that you incur costs only for things you absolutely need. This is particularly true when it comes to equipment. There will be many pieces of equipment that would be nice to have. They may even save you time. When it comes to these types of purchases, you seriously have to consider whether they are really needed at this time. Believe me, it is very easy to spend a lot of money on equipment before it is needed. This is another area where research and doing your homework will pay benefits.

Don't Be Afraid To Ask For Advice
You probably know friends or acquaintances who have their own businesses. Don't be afraid to ask them for advice. You may choose to filter some of what they are prepared to offer but, for the most part, they will have great things to share from their own experience that can go a long way in saving you time and help to minimize the mistakes you will be certain to make as you start you own business.

Consider Networking
Networking is putting yourself among a group of other business owners and managers on a regular basis so that you can share what you have to offer and have them share what they have to offer. Networking comes in many forms, including formally organized networking organizations that meet weekly, and also less formally or specifically organized groups where networking takes place, such as a local chamber of commerce. The local business networking groups generally have 15-35 members depending on the size of the community or region being drawn from. There is almost always a membership fee to join. Chambers of commerce generally have hundreds of local members and provide multiple networking opportunities throughout a given month. As a member of a chamber of commerce, you also have access to the membership list with addresses and phone numbers and mailing labels that can be used for direct marketing. There is a annual fee to join a chamber of commerce.

Provide Great Customer Service
Customer service is a term that has been used and abused today. Most businesses talk-the-talk but few actually walk-the-walk when it comes to excellence in delivering customer service. Customer service is NOT about giving "service". Frankly, the customer deserves and expects service. What we really mean by providing customer service is going beyond what the customer is expecting. Really good customer service is providing things that contribute to a "WOW!" factor. A WOW factor is something that causes the customer to say "WOW, I wasn't expecting them to do THAT for me". It's that extra service that the customer didn't pay for, but received anyway. Something that keeps them coming back.

For every business start-up there are many, many things to consider. For purposes of this article, my intent is to plant seeds that will grow into food for thought and discussion as you move toward declaring your independence and controlling your destiny with a business of your own.

7 Tips for Business Start-Ups
Check For The New Release in Health, Fitness & Dieting Category of Books NOW!
Check What Are The Top Cooking Books in Last 90 Days Best Cheap Deal!
Check For Cookbooks Best Sellers 2012 Discount OFFER!
Check for Top 100 Most Popular Books People Are Buying Daily Price Update!
Check For 100 New Release & BestSeller Books For Your Collection

Ed is a business related consultant and writer. His education includes an undergraduate degree in Business Administration and the "M" and the "B" in MBA. More importantly, he has views and opinions based on many years in the corporate world as a middle and senior manager, combined with several years as a business owner. He knows a thing or two about small business, business start-ups, home-based businesses and doing business online.

For more info on this article or other topics you want help with or just want to discuss, contact Ed through his blog at http://gt350ed.wordpress.com/

mobile phone watches Cheap Deals Valueflex Gs Red Air