The chance of a small business surviving its first five years is only around 50%.
Making good business management decisions from the beginning is one of the best ways to give your business a chance at success. Small business management means making strategic decisions for your small business that promote growth and protection.
Keep reading to learn seven small business management tips that’ll help your business survive.
1. Business Plan
One of the biggest problems small businesses face is that as they expand they lose sight of their initial goals. And in cases where they’re expanding rapidly, it means that company goals are moving targets.
Lack of clarity around the business mission and goals leads to the business losing its direction. And once a business loses its direction, the decision-making is impacted. Decisions aren’t made with the bigger picture in mind so the business loses out on growing in the way that would best achieve its initial goals.
This is why a business plan is important. This is a document that outlines the goals and objectives of the business, the market your business operates within, and the exact products or services your business is producing.
Refer to this document and revisit it every few months to update it and check in with your business goals.
2. Separate Business and Personal Finances
A lot of the time, running a small business can start as a hobby being monetized or a “side hustle”. This means that, when the foundations for the business are built, the finances are linked to someone’s personal account.
But business taxes are calculated differently from personal taxes. As soon as it’s more than just a hobby, make sure you’re setting up a business account and registering the business.
This way your business can grow and you don’t have to worry about untangling the finances later. This also means you aren’t personally liable if your small business runs into financial trouble.
3. Financial Management
Managing a small business involves lots of financial awareness.
The first step is securing funding for your small business. A successful small business is usually built on a loan of some kind, either from an investor or a bank. This funding allows for the business to have money to spend before it’s made a profit.
Next is managing day-to-day finances. This is the general business budget. Profit goes towards paying off debts, paying employee salaries, and buying business supplies. Leftover profit goes towards other business spending like the marketing budget.
Finally, business management includes sorting out taxes. It’s always better to make sure the job is done correctly. This means if you don’t have good accounting skills or tax knowledge, it might be better to hire someone for tax relief.
4. Hiring and Training Staff
The success of the business is largely due to the people who work there. Make sure you’re hiring people with the right skills and attitudes to make your business a success.
It’s always wise to think about where people will be in a few years, not just where they are now. As the business expands, some members of your team might need to step into management roles, so consider candidates who could be trained up.
The best way to retain employees who bring value to your business is by offering them competitive salaries and perks.
It’s also important to understand that all employees have adjustment periods and need training. You can’t expect someone to walk in the door knowing exactly what you want from them. Hire people who are willing to learn, and create training plans to make sure they develop the skills they need to work in your small business.
5. Invest in Marketing
Small businesses often struggle to get the word out about themselves. The best way to change this is with marketing.
A strong social media presence is a great way to do this, but you need to include a budget for sponsored posts and ads to widen your audience.
Another option is to boost your search engine result ranking. Use SEO tools and services to increase the chance of someone finding your website when they search for keywords related to your business.
Don’t be afraid to use traditional marketing means like broadcast ads, pamphlets, and posting flyers on local bulletin boards. But to ensure this isn’t a waste of money, carefully consider who your market is and where you’re most likely to find them.
6. Delegate
Growing a small business from only one or two employees to a lot more usually leaves managers in a habit of taking personal responsibility for everything. This simply isn’t practical.
Managers need to focus on running the business and managing their time carefully. This means they have to learn to trust their team and delegate tasks that they don’t have to do.
7. Use Your Company Data
Analyzing your own business data is a great way to guide future decisions.
Look at your sales data, cross-check it with marketing campaigns, and use this to inform future marketing decisions.
You can also look at how productivity changed when you brought in new employees. This can help guide you on balancing paying another salary compared to having another person to share the workload.
Good Small Business Management
Small business management isn’t easy. The chances of success are relatively small, which can make running a small business daunting.
But if you’re making good decisions from the beginning, your business has a much higher chance of success. Keep these tips in mind as you grow your business.
Check out our blog for more management and financial insights that’ll help you grow your small business.
