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Basic Ingredients of Small Business Management

Aug 5, 2008
This article is about the most important basic ingredients necessary to manage a small business. However, they are also necessary to manage very big businesses as well.

As all entrepreneurs know there is just one thing everyone needs to do, but most don't like it very much. It's the solid foundation of a business controlling system, your accounting/bookkeeping. Being able to control your business requires an up-to-date accounting. However, sometimes rough pictures about your business situation and development are enough to decide what has to be done next.

In these situations your controlling system needs to use other figures, as the accounting data you usually get once per month. If your controlling system allows you to use early indicators, such as the number of customer contacts in a given period, than you could be glad, because you got a system which enables you to see what's actually going on and not what has happened in the past. To have control of your business needs a controlling system where you get weekly reports, which just show you the most important numbers of your business development. There are some numbers which will always be important, such as customer contacts, new customers, customer loyalty as well as some data from your accounting system, such as your total receivables, payables and your bank account balance, which have to be observed carefully.

But your controlling system won't run your business, so it is most important to have a lean organisation as it is called these days. It's most important to have an idea of your workflows, so that you are able to adapt your organisation to your needs. This will save tremendous time, which could be used to develop or improve products and services for your customers. There are many ways how you could structure your organisation. Being able to retrieve documents from your archives fast is one effective way, to save a lot of time. A small archiving system could be set up within minutes, if you don't like to use document scanning. You only need an index list of your folders, than all documents have to be indexed as well. Indexing the documents is done by showing the folder number in a list, describing the document and assigning a number to the document, which will be kept in the list as well. In case you are searching for a document, you just need to search the descriptions; taking the indexed folder and looking for the document carrying the number you are searching for. This system requires using a numerical archiving system, which is not usually used by most of us. It takes a little time to get familiar with it, but when you saved a lot time searching for documents, you would be glad that you use it.

Another topic most important for business management is "Security". This does not mean, that only the security of your customers and employees is kept under this heading, it also includes the security of everything in and about your business. It includes to keep copies of important documents in several places other than your office, keeping your computer network save and to provide a secure working environment for your employees or yourself. You know best what is important for your company, so just take a sheet of paper or your favourite spreadsheet program and make a list of everything important to run your business. After you finished this list, think about what has to be done on each topic to have a secure solution. That's not that difficult to do, if you have a computer network you have to take care that access is made available only to the right people, this includes the installation of firewalls, virus scanner and so on. Document copies for example could be stored in a safe place at home or preferably in a safe-deposit box at your bank.

Until now, all this has covered the internal management of your business. You have not made any sales from all of this. So, most important is the last part of business management. It's all about getting customer and customer loyalty. It seems getting a new customer needs tremendous affords these days, but sometimes you hear from businesses where new customers just come in as if there where no other solutions. Well, that is not usual anyway. To get new customers today, you need good products and services and you must be able to communicate what are the benefits of them. This has to be done while advertising online and offline. As soon as you have customers you need to keep them staying with your business. This should be not a problem, due to today's techniques. You may send regular news on products and services and most important you provide quality customer support. Otherwise customers will leave as fast as they have arrived. Getting customers is the hardest task in business management. You could read a lot about it, but not getting any customer. The best way is to try what works for your business and then improving the procedures. Keep one thing in mind, nothing happens all of a sudden, so take your time and try again and again.

To summarize the above, there are 4 basic ingredients needed to manage a business,
  • Getting and keeping Customers (requires good products and services)
  • a Controlling System which gives you a rough picture about business development every week
  • an organisational Structure and Workflow that suites your needs
  • and a secure working environment.
About the Author
Stephan Szugat is founder of abenetis a web-based service about Business Management Solutions focusing on the core needs of business management. This includes Operational and strategic analysis especially Early-Recognition-Systems, Knowledge-Management and other Services for small and mid-sized businesses. He has approx. 15 years experience in the Finance and Accounting Area from companies of different size and from various industries. http://www.abenetis.com
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