Written by: Mark Thomasson
Small business ownership has become more popular over the years and the appeals are quite obvious. Having control over your activities and schedule, working on projects you care and are passionate about, all the while having a fair chance of making good money. That being said, running a business, regardless of the size, is not for everyone and it’s certainly not a walk in the park. Research shows that around 20% of small businesses fail in their first year, a figure rising to 70% over the course 10 years. The reasons for them going under are aplenty and they lead back to poor management, under qualified team, or just offering a product or service the market doesn’t need.
Knowing your business inside and out will play a key role in your success. Companies both big and small have a lot of moving parts and as an entrepreneur, you need to be familiar with all of them to some extent. If your resources aren’t abundant, there’s a good chance you’ll need to take some of these activities on yourself. We’ll be focusing on the 5 core processes necessary for running a successful small business.
The balancing act of coordinating all company activities is essential for productivity, efficiency and achieving goals. Compared to larger organizations, project management in small businesses has obvious downsides, but there are certain advantages that are often overlooked. Larger organizations, as a rule, have more resources in terms of both financial and human capital. On the other hand, smaller companies have fewer components, which makes room for better informational flow, easier communication, more control, and fewer unpredictable situations and scenarios. Not only that, but small businesses can adapt to agile methods more easily than larger organizations. If you’re not sure if agile project management is the right fit for your company, this article might hold the answers to your questions.
Human Resource Management
When it comes to the importance of having qualified people on your team, it doesn’t really matter if you’re running a small business or a large corporation. People are your greatest resource and you need to work on acquiring the very best. The biggest problem for small companies with recruitment and selection is the lack of resources, meaning they can’t afford to cast a very wide net and they’re not able to offer salary terms and conditions that would match the ones of their larger competitors.
There are still ways in which you can attract talented people. Just because big names from the field can offer them more money, doesn’t mean they can make them a better deal. If your cause has merit and people can a identify with your mission and vision, there’s a better chance of them joining your team. You can also remain competitive by offering them positions that have more responsibility because it will resonate with their need to feel like they’re making a difference.
When it comes to company culture and work relations, small businesses have the upper hand. It’s a whole lot easier to get your message across in terms of values and vision. Small teams have perfect conditions for establishing efficient channels of communication. Exchanges between all members of the company can also be more direct which will lead to fewer misunderstandings and easier conflict resolution.
Accounting and Finances
Making money as a small business owner is a great feeling, but there are huge responsibilities that go along with it. And although accounting is unlikely to come with the adrenalin rush and the excitement that accompanies some other activities, it can help reduce the number of unpredictable problems and stress significantly.
The important thing is to set up a system that’s easy for you to manage. If you have the resources to hire someone who will do these things for you – great. If you can afford accounting software – even better! Unfortunately, for small business owners, accounting experts and bookkeeping software are a luxury, so chances are you’re going to have to roll up your sleeves and get involved. However, there’s really no need to reinvent the wheel here. There are well-established practices that will help out immensely, like opening up a separate business bank account or using standardized invoice templates to keep track of your business transactions.
Marketing and Sales
Whether you’re a product or a service-based business will affect many things, but when you get right down to it, in business you’re always selling something and you’ll need marketing in some shape or form to do so. Even if you have a low marketing budget, there are still ways of staying relevant in the competition for your market’s attention. It only means you’ll need to pick your battles carefully and get creative. Thinking about costly marketing strategies will only leave you frustrated.
When you’re low on resources every penny counts and the costlier the action the greater the risks. The good thing is there are lots of ways to form a solid marketing strategy on a shoestring budget. Just don’t forget to think of your time as a resource. Content marketing, for example, can be performed and organized with little to no investments money wise, but the time spent on producing the content does cost money and should also be a part of your budget calculations.
Business development is essential for taking your small business to the next level. It’s sort of like a “meta” process which is based on analyzing, planning, organizing and modifying all other activities and aspects of your business. When you get right down to it, any action or activity intended for and eventually leading to improvement and/or growth falls under the category of business development. You can and need to use all sorts of different information. Not just about your company, but about your competitors and the market as well. The end product should be an overall strategy along with a detailed plan for achieving both short and long-term development goals. You can check out more information on small business development strategies here!
AuthorBio: Mark is a biz-dev hero at Invoicebus – a simple invoicing service that gets your invoices paid faster. He passionately blogs on topics that help small biz owners succeed in their business. He is also a lifelong learner who practices mindfulness and enjoys long walks in nature more than anything else.