Learn the basics of successful small business management and how you can formulate an effective strategy that will serve you well for years to come.
There has never been an easier time to start a small business. The world is at a stage where just about everything you need to become a small business owner is well within your reach. Some businesses even thrive on providing done-for-you business setup platforms and resources.
No doubt, a lot of excitement goes into starting a small business. You’ve got big dreams, real passion, and an unrelenting drive to succeed. But then the reality sets in — running a successful business is nowhere near as easy as you may have thought.
This is especially true today where the business management landscape is ever-changing. Marketing tactics are evolving, employee expectations are shifting, even the mode of doing business has changed. As a small business owner, you’ve got a ton on your plate at any given time.
And that’s why it’s so important to work out and adopt the right management style.
The key to managing a small business well is to not get snowed under the daily grinds of running a business. If you’re wondering how to achieve that, we’ve got you covered. This guide covers the basics of successful small business management and how you can formulate an effective strategy that will serve you well for years to come. Let’s get to it!
What does it mean to manage a small business for success, anyway?
It means knowing how to utilize your scarce resources to achieve your set business goals. This is a loaded statement. So let’s break it down a bit so you have a deeper understanding of what it means to successfully manage your small business.
Every startup and existing small businesses all face the same problem — lack of adequate resources. And yet, this is the stage where it would seem like there’s a never-ending pile of things to do. You have to: register the business; set up the operations structure; hire people into key roles; invest in business administration tools, have a marketing strategy; work out the financials… the list could go on.
The point is you won’t always have all the resources you need to solve them all in one go. Instead, you must know how to appropriate your available resources in such a way that business operations flow without hindrances and you remain on track to achieve your goals.
Speaking of business goals, there may be slight variations in the description, but ultimately, it all comes down to profit generation. So the question is how can you utilize your resources to remain fully functional and profitable? That’s what small business management is all about.
What are the best small business management tips for succeeding in today’s digital landscape?
Successful entrepreneurship means making sound business decisions. As the small business manager or owner, you are essentially the glue keeping both sides of the business (client-facing and internal processes) together.
So how do you go about it?
Here are our best tips on how to run a successful business:
Always have a reference point
By reference point, we mean a documented business plan that guides your decision-making. Whenever things start to feel like they’re spinning out of control, your business plan keeps you grounded and focused on the important stuff.
To create an effective business plan, start by outlining your business goals and then describing how you intend to achieve them. Break down each core business function — operations, human resources, payroll, billing and invoicing, marketing, sales, etc, and write down how you want them to operate in order to achieve your goals.
Review your business plan every now and then to see what’s changed and what needs to be revamped.
Time over money
Successful small business owners prioritize time over money. They know that money can always be recovered, but time, never. So if you can spend money to buy time, that money is well spent. This just means investing in automation tools and streamlining your processes so you can spend your time on things that actually contribute to your business’s bottom line.
You’ll be surprised at how much free time you’ll need when business operations begin. Sometimes, despite your best time management efforts, you still find yourself working extra hours every day for weeks on end. This is not an effective or efficient way to run your small business.
Spend money to make time, outsource roles that you’re not good at, invest in automation tools, and focus your time on improving your business’s profitability.
Systemize your business
When managing a new business, it’s important to know how to build systems and document processes. This way, you can onboard new employees and they can quickly learn about how your business operates in a structured way. More importantly, they know how you want things done. Plus, you have a benchmark by which to measure effectiveness in that regard.
Building systems is not just for managing your human resources. It also covers other aspects of your business such as how you onboard new clients, how you bill them, how you deliver your products and services to them, and so on.
When you build your business model around systems, you can scale better and improve profitability. And that brings you one step closer to successful small business management.
Business finances must be separate from personal finances
It is common practice for freelancers and solopreneurs to use a single account for both personal and business finances. This is not a sound small business management practice. In any case, when the time comes to register your business as a legal entity, you will be required to set up a business bank account so this issue should take care of itself.
But on the off chance that you are unable to set up your business as a legal entity, don’t mix up your business finances with your personal funds. Don’t use your personal account to accept payments for services or products provided by your business. And don’t use your personal credit card to fund business expenses.
Getting your finances mixed up will only cause confusion down the line, especially when you want to meet your tax obligations to the IRS. At the very least, open a separate personal account and use that strictly for business transactions.
Invest in continuous education
Things tend to change real fast in our current digital landscape. What you thought was a must-have today could be obsolete tomorrow. For example, just a few years back, mass printing physical advertising materials was a constant in every business marketing strategy. This is no longer the case. Small business owners now have access to digital marketing tools and data-backed systems for getting word out about their offerings.
If this is your first time managing a startup or small business, going the trial-and-error way is not an effective management strategy. It makes more sense to spend a few hundred dollars or maybe even a few thousand to have an expert teach you how to get it right the first time.
Furthering your education and upgrading your skills is never a wasted investment. Look for areas that you need to improve on and then invest in a course or workshop to increase your knowledge and gain deeper insight. This is what pushes you further up the entrepreneurship ladder.
Build your business offerings around value
If you can create high demand for your business products or services, you’re already halfway through being a successful small business owner. The only way to do that is to focus your business on delivering actual value to your customers.
Value means that whatever your business is offering, it solves a problem in a distinct way. If your business has no unique value proposition, then it will quickly become unprofitable. You’re doing what everyone else is doing and therefore not positioning your business for growth.
Invest in product development and keep looking for ways to improve your business offerings. From time to time, do a market survey to understand what your potential customers absolutely need. Get their thoughts on what they expect when looking for a particular solution.
For example, most customers expect eCommerce websites to offer free shipping. This means your eCommerce site should offer free shipping in addition to other perks and expectations, such as 24/7 customer service accessibility and competitive pricing.
Hire a professional marketer
There is no successful business without a well-defining marketing strategy. Launching a business website and setting up various social media accounts are not enough to get you customers. Today’s business marketing landscape requires brands to build and nurture customer relationships before sales start to happen.
Marketing is quite broad — from content marketing and SEO to paid ads and social media campaigns, and everything else in between. You’ll only waste valuable time and money trying to do it all on your own. That’s why it makes sense to hire a professional marketing agency instead to take everything marketing-related off your plate. Even if you cannot afford to retain the services of a marketing agency, you can always turn to freelancers to get the work done.
Find a marketing expert to create an effective strategy based on your business model. Then simply let them handle the task of improving your brand awareness and driving new customers to your sales pipeline.
Empower your employees
It’s tempting to want to focus most of your attention on clients and cash flow. After all, that’s what is keeping the lights on. But it’s important to remember that if your business’s internal processes aren’t working fine, then the output will not turn out fine. Your employees are the backbone of your business — empower them and your business will stand strong.
That’s why when it comes to human resources, it’s not enough to just hire some to fill a full-time or part-time role. You must be able to empower them to grow in that role and even contribute directly to your business growth.
One of the best ways to do this is to expose them to continuous learning. Buy relevant courses for them and let them use company hours to go through them. Find ways to improve morale across the board and keep them excited to want to work with you. Quarterly bonuses, paid leaves, flexible working arrangements, and streamlined workflows are all examples of things that you can offer your employees to empower them and facilitate their growth.
It’s a small price to pay to have a dedicated and knowledgeable workforce.
Declutter your business
Train yourself to let go of anything that isn’t useful to your business or negatively impacting the happiness and productivity in the workplace. Whether it’s a client who is leaving you and your team feeling drained all the time, an employee who is not pulling their weight, or stacks of old files and folders that no one needs anymore, cut them out.
By eliminating all the unwanted physical, emotional, and mental clutter in your business, you become more confident and efficient with your decision-making, project management, cash flow management, and other important aspects of small business management.
Never lose sight of the bigger picture
It’s all too easy to get caught up working IN the business that you actually forget to work ON the business. Spending the bulk of your time on day-to-day small business administration is hardly effective in the long term. If you’re not mindful, you could end up being more of a reactive manager who is primarily concerned with putting out fires that arise every day.
Of course, it’s important to address Immediate-term problems right away. But be sure to also create opportunities within your business for proactiveness and growth. Stay up to date on trends, network with fellow entrepreneurs, hold interactive workshops with your team, and look for initiatives that can push your business to the next level. This helps you stay ahead of potential issues in the long term while also keeping you focused and energized in the short term.
Leverage data to guide your decision making
From sales and marketing numbers to employee productivity and logistical information, there are all sorts of real-time data everywhere in your business that you can use to guide what kind of decisions to make. Leveraging this data allows you to identify areas that need improving and make your process more efficient.
Remember to also reevaluate your systems and business progress from time to time. There’s nothing worse than continuing to implement business processes that are not beneficial.
What are the most important small business management skills?
Management tools, mobile apps, outsourcing, consultancy services — these have become essential solutions in today’s business landscape. It’s important to know how to utilize them to help you manage your small business for success.
Beyond tools and tips, it’s important to have the right skill set for making the right business decisions. Thankfully, you don’t necessarily need to have a broad set of management skills. Having just a few of these skills will be super helpful. Plus, you can always learn more to augment your current skill set.
Clear communication
Sun Tzu’s “The Art of War,” perfectly explains the need for clear communication.
“If words of command are not clear and distinct, if orders are not thoroughly understood, then the general is to blame. But, if orders are clear and the soldiers nevertheless disobey, then it is the fault of their officers.”
— Sun Tzu
Of course, small business management is not necessarily a war, but the point is valid nonetheless. Everyone in your organization needs to know exactly what is expected of them at all times. Clear communication applies to all forms of businesses anywhere in the world.
It’s also important to communicate transparently. This builds trust and respect from your employees, which in turn, improves their loyalty and motivation to deliver quality results.
Attention to detail
This goes without saying, but let’s say it anyway. A good business manager knows how to pay attention to detail. You can’t afford to overlook even the minutest details in business as small issues today can always become huge problems tomorrow. Being able to hone in on important details makes it much easier to make critical decisions down the line.
Decision-making
At any given time, you will be faced with tough choices in your business. This includes everything from letting go of employees to making huge financial outlays. You must know how to take decisive action and manage whatever fallout may come up as a result.
The truth is not all your business decisions will pan out the way you expect. There are way too many variables to consider; some can even spring on you out of the blue, like with the stay-at-home orders and contactless transactions that ravaged the business scene in 2020. The important thing is that you don’t let these issues paralyze your decision-making process.
Delegation
Delegation is one area where most small business managers or owners struggle. Even if you’re managing a one-person business, the fact is you can’t do it all on your own. Knowing when to let go and bring in someone else to handle specific tasks or projects is an important management skill.
Learn to take a step back and imagine what would happen to your business if you weren’t at the helm pulling all the strings. How would you ensure the continuity of the work being done? Who would you trust to take over and maintain the same level of output? If you don’t have such people in your organization, start grooming them now.
Organization and time management
As a business manager, there’s no shortage of things that need your attention. One of the worst things to do is to multitask. There’s nothing efficient about juggling multiple tasks at the same time. The more effective approach would be to prioritize and complete one task at a time. Create a schedule and stick to it, and have your team do the same. This can lead to consistent performance across the board.
Motivation
When you’re managing a business, it’s your responsibility to ensure that morale stays high and that everyone is able to get their job done without hassles. For instance, you could check in with your team every now and then and discuss any issues that they may be going through, even non-business concerns. You could also hold monthly contests and giveaways so everyone in the organization is engaged. These little things go a long way in improving motivation.
Wrapping up
Successfully managing your own business is no walk in the park. But these small business management tips should help simplify various aspects of the process and help you come out on top.
Learn more small business basics with B12
Did you enjoy this handy guide? Check out the B12 resource center for more relevant small business and online marketing guides. If you’ve got any follow-up questions, be sure to reach out to our team.
At B12, we’re all about helping small business owners make smarter decisions. We offer a wide array of business management solutions, such as online invoicing and billing tools and calendaring software, as well as digital marketing features like web design, SEO, copywriting, and more. Sign up on B12 to get started today and let us show you a better, more efficient way to manage your small business.
Citation
B12. “How to effectively manage your small business for success,” Small Business Basics, 1 July 2021, B12, https://www.b12.io/resource-center/small-business-basics/how-to-effectively-manage-your-small-business-for-success.html.
The National Business Association has authored and curated resources on various topics and in multiple formats that will help you achieve your goals. Whether you are considering starting your first business or if you are a seasoned entrepreneur, there is something in this Resource section of the NBA website that will be helpful. We hope you find this article useful.
Providing relevant resources in an easy to navigate format is one of the many ways that the NBA accomplishes its mission of helping small businesses succeed. It fulfills our vision of being an indispensable resource for the self-employed, small business owners, and entrepreneurs. If you are interested in a deeper relationship with the NBA, sign up for our free email newsletter or learn about becoming a member by clicking on the “Join the NBA” tab.
