Problems in Setting Up and Running a Business Unit.

Topics: Small business, Business, Strategic management Pages: 4 (1007 words) Published: June 8, 2013
A business unit, sometimes called a strategic business unit or SBU, is a segmented group or department within a company that focuses on reaching a specific market or client. It may also focus on achieving a specific goal for the organization. While some businesses find success with this strategy, there are concerns and potential problems to consider before trying it at your company.


In business, money is usually a problem. It can be good to make money, but when you are just getting started with a business, it can be easy to lose money quickly. Before you start your business, develop a comprehensive list of the things you will need to finance and how much money you will need to make it happen. Discuss your business with others who have experience to try to cover as many costs as you can. When you have developed your startup budget, add 20 percent to it to cover the costs that you have not yet accounted for. When it comes to financing a startup, it is better to plan for more than you will need than to find yourself deep in debt right away.


Your employees can be your greatest asset and your greatest expense. It costs money to hire, train and retain employees. Your company needs to provide some sort of benefits package that includes health insurance, paid vacation days and paid sick days to attract and retain employees, and even then, you will have competition from other companies that may be able to offer better. As you delegate responsibilities to your employees, you begin to rely on them for your company's success. A key employee leaving your company can have an effect similar to losing a major account.


It is common for a new business owner to try to keep his office and warehousing costs down. When your company first starts out, a small and affordable space may be adequate. As your company grows, you will need more space, and you may realize that the facility you signed the one-year lease for is no longer sufficient. Have...
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