Managing a small business can be very rewarding, but it is also quite challenging. Whether you are running your own business or if you have been hired to manage a small business owned by someone else, you'll find yourself fulfilling many roles, performing numerous tasks and multitasking on a daily basis.
Ten Important Aspects of Managing a Small Business
When you run a small business, you have to make sure that you are setting an appropriate leadership example for your employees. As a manager, you have to perform the supervisory tasks that are part of your job, but you also have to function as a role model, positioning yourself as someone of integrity that your employees respect and will follow willingly.
Small business managers are responsible for ensuring that day-to-day business operations function smoothly, maximizing productivity and effectiveness in an efficient way. This involves a variety of tasks related to overseeing personnel performance and productivity while improving the efficacy of business processes. Tasks may include ensuring quality control, making outsourcing decisions, sourcing vendors, negotiating purchasing agreements and more.
3. Policies and Procedures
Small business owners must be involved in creating, overseeing and enforcing policies and procedures in the workplace. Management tasks related to policy and procedure development typically involve working closely with department heads to clarify operating procedures, seeking assistance from an HR consultant or attorney to develop an employee handbook, and defining safety policies with assistance from internal and external efforts. Once policies are created, managers must ensure they are followed and updated as needed.
Managers must be involved in determining staffing needs, including hiring and downsizing as needed. Duties may include coming up with strategies to recruit qualified personnel, updating employment application forms, screening applicants, making job offers and onboarding new hires by establishing an effective employee orientation process and more.
5. Employee Relations
Managers must also be actively involved in employee relations activities, ensuring the workplace is a positive one where employees feel like valued members of the team. Employee relations activities can include team building efforts, implementing programs designed to have a positive impact on employee retention and recognizing employees for their accomplishments. Managers must also handle employee discipline when such is warranted.
Managers are involved in establishing appropriate employee compensation programs. This includes determining direct compensation such as appropriate wages, bonuses and commissions as well as indirect compensation in the form of employee benefits like group health insurance, disability insurance, employee assistance programs, programs for college tuition reimbursement and more.
No small business can be successful without effective sales and marketing strategies. Small business managers must be closely involved in all aspects of sales and marketing, including new product development, setting appropriate pricing, prospecting for new customers and establishing effective advertising and public relations plans. Establishing strategies for creating positive customer experiences and dealing effectively with complaints are also important marketing functions.
Small business managers must also remain very focused on the financial aspects of the companies they are running. Finance-related tasks can involve budgeting, choosing accounting software, monitoring profit and loss statements and preparing and filing payroll and income tax returns. Financial management also involves establishing an appropriate system of checks and balances to ensure that company resources are used properly. Managers may also be involved in seeking outside funding in the forms of loans or other types of funding for small businesses.
9. Risk Management
It's also important for small business managers to take steps to protect their organizations through effective risk management procedures. This involves making certain that the company has sufficient business insurance as well as workers compensation protection. Establishing an effective business continuity plan is part of the risk management function, as is compliance with OSHA requirements, employment laws and other applicable regulations.
10. Strategic Planning
Managers must be involved in strategic planning, which is the process of looking closely at where the organization is now, setting goals for what the organization needs to achieve in the future and figuring out a plan to get from present circumstances to the future desired state. Strategic planning involves conducting periodic SWOT analysis assessments, which focus on looking at internal strengths and weaknesses as well as external opportunities and threats.
Lay the Groundwork for Success
The key to being a successful small business owner or manager lies with recognizing the myriad tasks necessary to build and maintain a successful operation and to realize that you cannot do everything yourself. Familiarize yourself with everything that goes into running your company and put the right people in place to ensure that critical tasks get done in an efficient and effective way by people who have the expertise necessary to do them well.
While you can't delegate the ultimate responsibility for the success of your business, you can identify the tasks that can - and should - be delegated to qualified employees or professional service providers to set the stage for long term success.