As a small-business owner, you’ll often find yourself in charge of everything in general and nothing specifically. This occurs once you have managers for various company functions, such as marketing, accounting, sales, production, IT and HR.
The management of small businesses differs from the management of large corporations, which are often required to focus on increasing shareholder value and stock prices. How you define business management determines how your business will be run and your role in that model.
Starting the Company
When small-businesses launch, the owner often does all or most of the work. For example, a new housepainter might do the estimating, handle marketing, perform the painting, and keep the books before eventually hiring contractors, then employees. At this stage, SMB Places includes setting up the company for growth, which might mean hiring and directing contractors, such as an accountant, webmaster or lawyer, and staff.
The owner of a small business should create short-term and midrange plans to get the company to where she wants it to be in three to five years. One way to do this is to take a pre-launch business plan and turn it into an operations manual that’s updated each year, helping management guide the company’s growth through effective practices, policies and procedures.
Running the Company
Once a business is up and running and has steady sales or clients, small-business management requires ensuring the company doesn’t lose business, so quality control and quality assurance programs are added. This can include making sure products and services are delivered correctly, which means managing vendors, suppliers, in-house staff and contractors. The owner of a small business keeps track of sales, cash and credit, revenues and profits.
Financial Management Tasks
One of the key aspects of small-business management is creating an accounting system, which provides the owner information, rather than just a bookkeeping system that only records sales and payments. Financial management for a small business means creating, maintaining and analyzing documents such as a general ledger, annual budget, balance sheet, profit-and-loss statements, cash flow statement and accounts receivable and payable reports. Small-business management teams also need to ensure the business has access to enough cash and credit and avoids too much debt service (interest).
Managing Business Operations
If you don’t want to micromanage your staff, you’ll hire people who know more about their areas (such as HR, IT and marketing) than you do. Small-business management often starts with setting long-term strategic goals and then overseeing staff and departments who create the tactics needed to reach strategic goals, according to the website. A management team has regular meetings to ensure everyone is on the same page and meets deadlines.
Small-business management often includes performing an annual analysis to look at the company’s strengths, weaknesses, opportunities and threats. Management also sets specific goals, objectives, benchmarks and key performance indicators to keep the business on track. When things go wrong, management looks at ways to solve problems, which often must be identified first.
