A Step by Step Guide to Managing a Small Business
If you run a company within the United States, chances are, you’re a small operation: over 99% of all companies in the U.S. are classified as small businesses.
From your geographic reach to your management budget, your small business operations likely differ greatly from large corporations and therefore require an even closer eye to keep everything running smoothly.
Keep reading to learn more about managing a small business to keep your team happy and your operations profitable.
Choose & Value the Right People
The key to all successful and efficient businesses is the people within them. The right team members will push themselves and those around them to grow.
Look for motivated, high-energy people who care more about long-term success than what their paycheck looks like. Those who are eager to learn will likely go farther than accomplished candidates who aren’t open to advice.
Once you have the right people on your payroll, you need to give them the time and resources to understand the ins and outs of your business. Give them ample training to learn about their role in the company and to eliminate any confusion before higher stakes are at risk.
Show your employees that you value them by offering growth incentives. Offer free resources for continued education, and provide opportunities to advance within the company. Honor the work-life balance, and look for ways that you can integrate flexibility into the workplace.
Invest in Marketing
A great team and product may be enough to attract customers. But more often than not, you’ll need to combine your high-quality products with a well-designed marketing strategy.
As a small business, your primary battle is just becoming visible. To invest in marketing properly, you’ll need to conduct some research into the platforms that will give you the most visibility.
For instance, LinkedIn is one of the best tools for companies offering B2B services. 80% of B2B marketing leads from social media come from LinkedIn, and 92% of B2B marketers use the platform above all others.
Meanwhile, a platform like Instagram is an optimal choice for a small retail business that relies heavily on aesthetics. With its “shop” feature, you’ll appear to relevant users.
Don’t forget to integrate search engines into your social media strategy. Investing in services like Google Ads may be what’s necessary to make your business stand out for local searches.
Keep a Close Eye on Inventory
As a small business, it’s likely your company offers a limited range of products – so identifying which products are your most successful and which need to go becomes especially important.
Your inventory turnover ratio, the measure of how many times inventory is sold or used in a given time period, gives you insight into which products sell and when they sell.
If your small business has a significant portion of its capital tied up in inventory, having an understanding of your inventory turnover is crucial. When items in business inventory don’t get sold, you won’t have the funds necessary to pay suppliers, employees, and lenders.
If you’re wondering how to calculate inventory turnover, you don’t have to conduct this process yourself. Numerous online tools simplify the process and give you the final data you need for future decisions.
Pay Your Taxes
Keep your small business in prime financial health by paying your taxes when they’re due. As a small entity, it may be easy to avoid paying taxes without getting caught.
However, you’ll likely face repercussions in the long run at a cost that will far exceed your original payments. If you don’t pay minimum amounts on time, you’ll likely get caught eventually and pay a fine.
Getting in touch with an accountant can help you stay on top of your payments and avoid any future legal troubles. And making payments every quarter doesn’t mean you have to file every time – you just need to send in your check or online deposit.
Leverage Your Time
Time is the most valuable resource of your business, and one of the most difficult to optimize.
Proper time management will keep your small business running smoothly and maximize your brainpower.
Reduce decision fatigue and make better choices by spending the beginning of your day on the most important tasks. That means no checking emails or working on lower priority tasks. Tackle those big things on your to-do list, and the rest of your day will stay on track.
And no matter how talented you are at thinking on your feet, you’ll need to structure your time at work if you want to accomplish everything on your to-do list. Take a few minutes on Sunday night to plan your tasks for the week. At the end of each day, revisit your list and modify the rest of your week as needed.
Implement 80/20 (Or Your Chosen Analytic Method)
The famous 80/20 rule, also known as the Pareto Principle, states that just 20% of inputs are responsible for 80% of your results.
In business, this means that 20% of your workers will generate 80% of new clients, 20% of products will yield 80% of products, and 20% of your time will provide 80% of your productive actions for your day.
The 80/20 rule is essential to strategic planning because it requires you to take a look at your current operations and be honest about what’s working and what isn’t.
Collect data on your team members, products, and profits. Give your most successful team members rewards and encouragement. Produce the most successful products at higher volumes.
And you don’t need to follow the 80/20 rule to be successful – you just need a way to analyze your business’s performance candidly.
Managing A Small Business The Right Way
Managing a small business is one of the most challenging tasks of being an entrepreneur, the right approach will do wonders for making your business more efficient. Learn more about running a business by viewing the other articles on our blog.