Good management is the key to a successful business, and there are tools to help business owners become good managers.
A well-written business plan, goals, pro forma financials, and a good policies and procedures manual help you be a successful business manager. They eliminate many mistakes and allow you to mostly concentrate on decisions when changes occur. To improve performance, planning should be proactive, continuous, and creative, not reactive. To be effective, goals must be written, understandable, challenging, achievable and measurable. Applied intelligence software is helping business owners be more effective and efficient, but nothing will ever replace the owner’s need to make decisions. The overall quality of these decisions strongly affects the business success or failure.
Management involves leadership, which is an important part of management; but it is not the same thing. Business owners are managers and have legitimate power within the business. Leaders are able to influence others toward the achievement of goals. If you are purchasing a small business you will likely be the manager; but a larger business will have managers under your authority. A good manager will be a good leader, earning the respect and trust of his/her subordinates. Some suggestions for building trust are being open, fair, and consistent, maintaining confidences, and telling the truth. It is also important to fulfill your promises and speak your feelings.
Scheduling involves a list of necessary activities, their order of completion, who is responsible for each, and time needed to complete them. Preparing a chain of command on a chart for everyone to see and going over it in a meeting with all employees present can help eliminate any question as to who is each employee’s immediate superior. It is especially important when promotions are given, as this simplifies communication and the placement of responsibility.
Every business owner is involved with human resource decisions. If you are buying a business, it is important to keep the sale confidential until after closing for employees, customers, suppliers, and everyone. The buyer and the seller want the business to continue as it is and do not want to lose anyone. The chances of employees staying with the business are good at that point, as they don’t have as much fear of the unknown.
When you prepare your business plan, you will plan for personnel needs and write a job description for each employee. This will include minimum acceptable qualifications. You will take an inventory of the current personnel and their skills and match with the overall personnel needs. You will then determine new personnel needs that must be filled. For a smooth transition, it is usually a good idea to keep personnel as it is until you are comfortable with the business and the employees are comfortable with you.
Change is inevitable, so managers must find ways to deal with it. It is occurring at an explosive, accelerating rate. External change forces tend to have a greater effect on a business, because business owners have little control over them. External forces include the marketplace, government laws and regulations, technology, labor markets, and economic changes. Internal change forces, which come from within the business include changes in strategy, changes in the workforce, new equipment, and change in employee attitudes. Even though change is inevitable, there is always some resistance. Most people get nervous about any change. Resistance from change can stem from uncertainty, concern over personal loss, and belief that the change is not in the best interest of the business. There is usually conflict, and business owners as management must deal with opposition. Good communication is important between management and employees. The opposition might just be a misunderstanding or not having complete information.
It is important for business owners to remember that any change causes stress, whether it is good stress or bad stress. Good stress can enhance, enrich, and be a powerful motivator. Bad stress can cause job burnout caused by job-related stressors. These employees tend to be idealistic and seek unattainable goals. It is important for management to encourage employees to think creatively and positively. It is also important to let them know how much they are appreciated.
Management is so much more than keeping track of the sales and income. It is caring and appreciating the employees, customers, suppliers and everyone involved.
