Small Business Management – A Balancing Act – Part One

So you have taken the plunge, and embarked on the painful, yet rewarding journey of starting you own business. With so many books on small business management, and advisors offering help, what do you do? As always the answer is never straightforward, but here is my humble contribution, to these vexing small business management questions.

Managing a business, is an exceedingly difficult exercise, as all small business people, only discover, after having established the business. For the most part, business management is a balancing act.

Allow me to expound on this balancing act. If a plumber quits his normal job, to go into self-employment he will be an expert in his chosen field, and remain confident that the money will roll in. Later on, he runs into cash flow problems, customers shortages etc. He then comes to the sobering realization, that business is not the bed of roses he thought it would be.

A small business owner concentrates at what he is good at, i.e. computer services, building, carpentry etc. But any business, no matter, how big or small needs an admin department, and an operations/production department. No matter how good you are at what you do, if you lack certain skills and competencies in administration, you business will constitute part of the 75 to 80% small business failure stats.

You might create a workshop for you product and services, but do you have a proper administration department? Businesses collapse due to a lack of proper administration.
Here the balancing act comes in. Divide time equally between your administration and operations duties, as a small business owner.

Many new business owners cannot grasp the fact that an inadequate administration department leads to eventual business failure. This compels me to provide numerous examples to my clients.
Here are some to ponder on:

· A potential customer sends you a fax or an e-mail requesting a service or product. The fax or e-mail goes missing. By the time you have located the e-mail, the potential customers have gone to the competition.

· You don’t maintain a customer list or e-mail list. You have many products and services to offer, but customers don’t know about it! You lose business.

· You don’t maintain records on how much your customers owe you, and is therefore not in a position to collect.

· You’re phones go unanswered, or messages are not noted from prospective clients.

· Inadequate stationery (no business cards, letterheads with contact info)

· You don’t maintain proper books of account, so spending and income patterns are not monitored, leading to stock and /or cash losses.

Jack up your admin department, to the same level of your operations department within the first three months of your new business. I am not suggesting you spend less time on operations, only equal time on administration. That is a good start, but the balancing act between admin and operations department goes much deeper. Look out for the second article, later in this week, which provides more detail, of additional sub-departments under admin and operations.

Getting IT Support For Small Businesses

In today’s business environment, advanced technology has taken center stage and it is an integral part of every business. Businesses whether large or small, need IT support. While the large businesses can afford to hire experts to run their IT departments, the small businesses have to rely on outsourcing. The IT support has become a necessity for any business that hopes to grow and remain competitive in the market.

Virtually every task or project in a business has been automated. Computers play an important role of ensuring that a business runs efficiently. Having an effective computer network system helps to ensure that a business can operate smoothly and cost-effectively. The computer system enhances efficiency and is able to enable the business to hire fewer employees than would be required to run a manual system.

As advancements in IT continue to expand and change, it is becoming increasingly important to have people who know how to run the systems, working for the business. Outsourcing IT services has become one of the most important functions that a company can carry out. Most administrative tasks have been automated and the business has to get a reliable service that ensures that the systems are working at all times.

The benefits of IT support services include the fact that productivity is increased without the need for additional staff. A small business does not have to increase the number of employees, as the technology implemented is able to perform many specialized tasks. By outsourcing its IT services, the business can concentrate on its core functions, including dealing with customers and bringing in more clients.

Small businesses are able to compete on a level playing field with larger businesses, when they have access to the latest technology. The companies that offer the IT services have expert personnel who are able to acquire the latest software and skills. The small business gets the benefits of the skills without paying to hire new computer specialists. The service providers are able to ensure that their clients have all the support they need at all times.

Support services offer a wide range of IT related services; from simple computer tasks, to more complex network issues. A business can hire the service provider to deal with any number of issues, whether they are hardware related, or software related. Most IT support services are offered round the clock and the business can get assistance any time of day or night. The company is able to monitor the clients systems to ensure there are no problems, and they perform routine maintenance on a regular basis.

Most small businesses depend on remote support where the IT service company ensures that the system is running properly, from a remote location. This means that the service provider can even be in a different city or country, but is still able to handle the affairs of the business. The support company is able to monitor the company data to ensure that everything is running smoothly. Communication can be conducted through the telephone, emails, online chats and any other systems.

Organizational Structures for Small Businesses

In life, we need to keep things organized so that we know what to do. When it comes to business, organization is important to keep everything flowing perfectly. Everybody has a role to play and these roles need to be made clear so that staff and employees know where to go if they need something. Organizational structures are formal systems that show the tasks and hierarchy of the people in the organization. It classifies the responsibilities and roles of the different positions and what relationship in present between them. A good structure coordinates and controls the organization’s resources and helps motivate employees in achieving the collective goal of the company.

Distribute Authority

An organizational structure should establish an order that determines each of the position’s responsibilities. It should also show how the different positions are related with each other. In management, people need to know who decides what; this is where authority comes in. Authority can either be centralized or decentralized. Supervisors can make decisions for the majority or a collective decision must be made.

DeterminesSpanor Range of Control

Even in a small business, there should be a guideline that sets how many people a supervisor or manager takes charge of. This span or range of control varies greatly between different organizations. Some manager might have narrow spans and only manage a few people whereas others might have wide spans and manage a big group of people. Either way, this helps set management to prepare how they will manage these people.

Organizational Height

There is always a hierarchy in any organization. Think of it as a cake with different layers. However, an organizational structure’s height is what sets it differently. Some organizations might be tall, which means that they have narrow spans of control while others flat with wide spans of control. Organizations with a more flat organizational height tend to adapt faster.

Staff or Line Structure

Highlighting and determining staff and line positions and tasks is one of the most important uses of the organizational structure. A line position is the most directly involved position to the organization’s main goal. For example, line positions inside a manufacturing business are the one that participate in producing the businesses products. Staff positions, like marketing officers, provide help.

Creates Departments

When small businesses decide to expand, an organizational structure can help with creating more specific divisions or departments for responsibilities and tasks. This process is called departmentalizing and can be done in different ways. A department can be made based on product, function, geographic location, and even by client.