Be a Great Manager: Managing Your Small Business

The Small Business Administration has reported that more than 90 percent of small businesses fail just because of poor management. Management is a broad term which can be described by planning, financing, marketing, human resource development and accounting. In this post I will describe 5 essential steps towards successful management of your small business.

Begin With Planning
One of the main reasons of failure of small business is lack of proper planning when starting the business. It’s amazing how many people are eager to start a small business but have only a vague illusion of what they want to do. But what you should do is, when you KNOW that you want to establish a business organization, you should discuss your idea with professors, friends, and family and in relevant online forums to help you get started. Then you should develop that idea and give it a “business plan” form. A business plan is a detailed written statement that describes the nature of the business, the target market, the advantages the business will have, the disadvantages the business will face, how they will create a market for themselves, how they will compete with the competition etc.

Act to Achieve a Solid Financial Stability
Number 4 mistake on the list of 17 common mistakes of small business entrepreneurs is related to having a weak financial backing. Before starting the business you should have the correct amount of capital on hand, or you should have a proper plan of getting the money in time. Starting a business with too little money on hand, or too much money on hand is bad for you. You should also pay close attention to not buying on credit too much. Many family members, friends, angel investors, venture capitalists, governmental units help out and invest on new businesses.

Try to Know Your Customers
One of the most important elements for succeeding in business is to know the market. In business, market consists of people who are/will be interested in your service or product. Once you have identified your market and its needs and demands, you can start acting according to it. The way to meet your customer’s needs is to provide goods and services which offer superior value than your competitors. Maybe you can offer less price, or add one or two new features to your product to create a position for your business in the market.

Manage Your Employees
As a business grows, you won’t be able to monitor each and every part of your business effectively. Even if you give 60 hours a week to your business, you won’t be able to manage accounting, HRM, marketing and all other essential parts of a business. That’s why you will need employees who will help you out. It’s not easy to find good and qualified help when you offer less money and benefits. But it’s more important to keep the best employees once you have hired them. But believe it or not, its easier to keep an qualified employee to a small business than to a large business. Because in a small business the employee will find that they are doing a more challenging job and their ideas are being granted.

Keep Accurate Records
A business can fall into trouble very fast, if they don’t keep accurate and timely records. That’s why accounting in business is so important. A businessperson who will set up an effective accounting system early will save much grief later.

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