Owning a small business comes with challenges that are unique to the function and the size of the business. Owners have to handle all the challenges of delivering, selling, managing, financing and growing the business sometimes with no or little staff. What is most important is to retain the interest of stakeholders such as vendors, customers and the team so as to build a momentum within a short period of time. Learning new ways to manage the business can make the business owner’s life easier and the business itself to become more productive.
With that in mind, here are 10 small business management tips.
Understand your customers
It’s important for business owners to understand their customers, the products and services they need, how they need them and when they need them. They should then develop strategies to make sure that they fully meet their customers’ needs.
It pays to be aggressive in small business management especially if there is a consistent competition. The business manager needs to learn how to work outside personal comfort zones and be prepared to take risks that he or she would not normally take. However, to minimize potential risks, he or she should take into account the effects of what the business does and anticipate the consequences if things go wrong. A manager needs to have confidence in the decision making process and avoid second-guessing him or herself on the big questions, so that once he or she makes a decision, they can move forward and reap the benefits that follow.
Develop employee loyalty
Employee management should be more than performance evaluation and responsibility delegation. Employees are much more productive if they feel a sense of loyalty. The loyalty can come from the things the business does for them, things they do or a combination of the two. There are many areas to consider that include financial, family, stress and grief where the actions of the manager can help in solving employees’ problems making them more productive at work.
When recruiting employees it’s important to employ only those who are qualified for the job. Small businesses sometimes tend to employ people who are not qualified in an attempt to save on expenses but forget that they are also lowering the quality of their production. By having qualified, skilled employees, you increase clients’ confidence towards your businesses.
Know the business
Small businesses are vulnerable to being drummed out of market easily by competition. To prevent this, business owners should stay on top of what is trendy or new in their business industry. They should stay informed all the time about current events in their small business’ industry so as to remain competitive all the time.
Keep communication channels open
Apple Inc, one of the world’s most admired companies thrives on culture that promotes debate and encourages workers to confront each others’ views. The same applies to congratulating and awarding workers who have gone beyond and above their job description. This is even more important in a small business.
Keep personal and business expenses separate
One common mistake small business managers make, is mixing business and personal expenses together. By mixing the two, they often have accounting problems that can subsequently result in tax problems. The desire to blend the two is often influenced by insufficient money. Keep a personal budget and make it equally important to your business budget. Transfer your regular ‘pay’ from the business and then use a private account for personal expenses.
Paying taxes can be a big challenge that small business owner’s face. They fail to pay the taxes because it is not as easy as having them deducted from a pay-check. You should estimate your tax payments as early as possible and set the money aside so it is available when due. Tax planning can be very complicated and we recommend small business owners seek the advice of a good tax professional.
Know basic accounting
Knowledge on basic accounting can be the difference between a successful and failed business. Owners should take active interest in the accounting and bookkeeping even if they have trusted professionals doing their financial paper work. Understanding the financial aspects of business they are running is as important as the products they sell. They should be aware of movement of cash out and in their businesses. They should also have knowledge on how to review or develop their business balance sheets so as to know their businesses financial condition at a specific point of time.
Use an accounting program you can understand
Many small business owners do their own accounting because of the cost of hiring a specialist. It is very important in this case to use an accounting program you can understand. Many, if not most, accounting programs require specialist knowledge of accounting with debits and credits. However, there is easy small business accounting software available that most small business owners can understand without any need for additional training.
I hope these tips will help you manage your business. By the way, if you are starting a business here is additional information to help you.