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There is a common misconception that lean management means massive change in the operational structure of a business. Not so, and many beleaguered businesses in Europe would do well to look at the principles of lean management to improve and streamline all processes with the business.
Origins of Lean Management
The principles of modern lean management come very definitely from Japan and the Toyota Production System (TPS), which identified several areas of waste reduction and a revolutionary way of looking at business methodology. Of course, lean management and lean manufacturing is not just about ‘cost cutting’, but about sustainable measures introduced, that will positively affect the business across all sectors. Two of the most important areas of lean management in TPS are ‘Continuous Improvement and ‘Respect for People’.
The idea behind continuous improvement is that no single idea can be perfect, and it is only through continual questioning and analysis that new systems and processes can be developed. Lean managers always strive to enhance the working environment by encouraging change and the ability to question ‘norms’ by all members of the workforce. Respect within the business environment is focussed on building effective long-term working relationships based on trust, opportunity and openness.
In many businesses across the UK and Europe, businesses are bogged down by the lack of effective change and more importantly, the lack of initiative to effect change due to ineffective management style. When I moved from the world of accounting to strategic management and on to my MBA and a study of micro capitalism, I became interested in lean management principles and how they can be applied to small business owners to drive an economy and instil principles of change in a diverse workforce.
As a busy consultant, I always impart the wisdom and common sense of TPS and lean management as an integral part of starting a business that has the best chance of success in a global economy.
As a busy financial consultant, I am often asked what the ‘next big idea’ is going to be. The answer
that I always give is “anything and everything”. For the truly smart investor, it is never a question of
following the markets but about creating opportunity and recognising the business potential that is available everywhere.
Originally an accountant, my MBA in strategic management has given me the opportunity to advise and lead both established businesses and start-ups on the subject of how to streamline and manage a company to attract potential investors. I have been asked many times to write on the topic of micro venture capital and the tools that entrepreneurs and small businesses with big ideas can use to attract investors.
Micro Venture Capital Explained
If it is too small or too risky for the traditional financial institutions you need to attract the attention of Micro Venture Capitalists who are looking for diverse and different business ideas to invest in. The concept of micro venture capital started in India where entrepreneurs were given small loans to develop their businesses. The loans were usually awarded based on sound financial planning as well as a measure of trust between the parties. There are a number of ‘banks’ that deal specifically in micro-loans and one of the first institutions was the Grameen Bank in India, which in 1976 completely revolutionised the way that credit was extended to micro entrepreneurs. Micro venture capital and micro loans are now big business in many emerging economies, including the BRIC group and some of the most successful equity funds were built on the foundation of micro venture capitalism.
How to Attract The Attention of a Micro Venture Capitalist
One of the driving forces behind the emergence of micro venture capitalism is of course, the internet. It is no longer a costly exercise to set up a company and promote your services, products and ideas using the global web as a platform. Apax Partners, today one of the largest private equity firms has always held firmly onto the idea that it is ‘people first and product second’. They look for great ideas managed by people with a passion for business. If you’ve got a great idea and are passionate about your business then spread the word using the free web tools at your disposal. I always advise small and medium business owners to ensure that their business strategy and methodology is efficient and effective. You don’t have to be ‘big’ to attract the attention of investors.
Next week we will be discussing the different types of investor that you can attract to your small business.