Effective Small Business Management

Small Businesses are popping up like nobody’s business. Some grow through the decades to become multinational companies, while others go through a phase of glory but wind up in disasters. What’s the difference between an effective small business that has potential for growth and an ineffective one that is destined to bring the stakeholders involved a nightmarish experience? After having worked in my company for a period of time and having meetings with different people, I think I can come up with a fairly good answer. Of course, I’m not suggesting that you read what I have to say and take it as a fact. You may like a particular point I made and dislike another. Whatever it is, feel free to leave your thoughts after reading my post and we can all share our knowledge effectively.

An Effective Small Business Has Motivated Staff
In a small business, it’s usually the staff that brings the company to new heights. For new business startups, there are not many employees and the boss is usually very close to his employees. The management is super effective at this stage, since employees and the employer feel like close friends and have a common goal to grow the company. For small businesses that do not have motivated staff or owners, we can almost be sure that it will fold within a few months. There is not much assets that a small business owner has, with the most valuable asset being himself and his few employees.

Getting Out of Small Business Management
When the staff and owner is motivated in the right direction, the company will soon grow. The growth will lead to more job tasks and the owner will get increasingly drained, since he has been the approving authority for almost everything. This is still alright when the company is small and everything is manageable. However, the business owner has only that much time and there is a limit to how much he can do. To enable the company to continue growing, the business owner has to implement systems to effectively manage everything. Usually, empowerment of staff is required so that the boss focuses only on the most critical issues. Many entrepreneurs get stuck here, since they are usually control freaks, therefore the business cannot grow. For example, we still see many minimarts with the owner as the cashier when it does not cost much to hire a cashier. Won’t it be more effective to hire a cashier and the owner will be able to spend time in opening more branches and growing the business? The sad fact is that sometimes there is just not enough trust in their employees.

Short Example
Let’s look at 7′eleven though. Do they need to trust their employees in order to leave them with the job of being a cashier? No, they don’t and it’s simply because they have electronic cash registers which take down all the sales of the day. It will be difficult to falsify figures with this in place. This is the perfect example of a simple system that companies have to adopt in order to continue growing. Contrast that to the minimart owner who insists on being the cashier and we can see that it is unlikely that the owner will grow the business any further than a single minimart.

When systems are in place, they should be made so simple such that anyone can use it. This will inevitably make most of your staff dispensable, but jobs will definitely be completed faster. Ever noticed that in Multinational Companies, most people have clearly defined job scopes, unlike an employees in small businesses? Clearly defined job scopes will help tasks to be completed effectively, without relying on the motivation of employees. At this stage, usually we can see that employees are becoming increasingly unimportant, because someone else can be employed to replace the employees fairly easily. After all, there are already systems in place to manage the company. Just look at the amount of employees slacking around in a multinational company, so why is the company still able to turn a profit? The systems in place is an important factor.

I won’t go into motivation, since there are employers who still treats the employees like gold even after systems are implemented. Businesses led by such owners usually grow even faster. This post is a sequel to my previous post on ‘The Internet Gold Mine Story’ where I also talked about the importance of systems. My whole point is that systems are imperative in any businesses, whether offline or online. They help you to manage your business effectively, so that you need only concentrate on growing your business. Even if you do not want to grow your business anymore, systems help to free up your time, so that you concentrate on what you want to do.

Think about the systems you can implement, automate everything and you will truly become a proud business owner that can go for a 3 months holiday and still make money. Otherwise, you are just a slave to your business.