Chapter 14 - Professional Small Business Management

Managing Small Business

• Managing a small business is a complex job

• Must be a generalist with a myriad of management skills that are used every day

• Lacking resources of large organizations

• Expectations are high, so must be professional at all times

Four Functions of Management

• Planning: Determining the courses of action to achieve organizational goals

• Organizing: Coordinating activities and resources to achieve organizational goals

• Leading: Guiding and motivating a team toward a common goal

• Controlling: Monitoring and evaluating activities to ensure that they are on track to achieve organizational goals

What Managers Do

• Get things done through others

• Balance between doing and managing. The more time you are spending time doing work in the business, the less time you have to work on the business

• Think of the manager as the conductor leading an orchestra, rather than as a musician

• Frontline managers average 583 activities during an 8-hour day

  • Hiring and staffing

  • Training new employees

  • Coaching and developing existing employees

  • Supporting problem-solving and decisions-making

  • Conduct performance reviews

  • Translate business goals into functional and individual goals

  • Planning and goal-setting for future periods

  • Tracking and reporting scorecard results

  • Monitoring expenses and budgets

• Use resources efficiently and effectively

Being Effective vs Being Efficient

• Effectiveness

  • Why is this being done?

  • Doing the right things?

  • Aligns with objectives and goals

  • Future looking with the desire for a better future

  • Not easy to measure

  • Requires an external view outside the organisation

  • Requires subjective visioning

• Efficiency

  • What needs to be done?

  • Doing things the right way in the best possible manner

  • Focuses on process

  • About current work, what must improve now

  • Easily measurable by analysing specific metrics

  • Internal within the bounds of the organization

  • Requires objective analysis

Small Business Growth

• Growth is natural

• Growth comes in many forms: revenue, total sales, number of customers, employees, products offered, and facilities needed

• Businesses experience growing pains

Your Growing Firm

• Stage I

  • Existenece

• Stage II

  • Survival

• Stage III

  • Success

• Stage IV

  • Takeoff

• Stage V

  • Resource Maturity

Transition To Professional Management

• What does the transition look like?

  • Transition can be complicated

  • Thinking like a manager

  • Attributes of professionally managed business

The Next Step: An Exit Strategy

• At some point, every owner must leave

• Plan how to end business:

  • Realize when it is time to leave

  • Watchout for your employees

  • Make sure you are leaving the company in good hands

• Options you have: sell, merge, or close

• Specific exit options

Leadership In Action

• Managers who are also leaders

• Foundations of leadership is credibillity

• Leadership is the inspirational part of the many things a manager must do through directing and influencing team members

Leadership Attributes

• Defining the vision

• Communication ability

• Self-confidence and dependability

• Adaptability, commitment, creativity

• Ability to follow through

• Ability to take action

Negotiation

• Art of negotiation is continuous

• Negotiation has four possible outcomes

  • Lose-Lose

  • Win-Lose

  • Win-Win

  • No outcome

Delegation

• Giving others power is not easy to do. Some of us have difficulty in delegating

• Tips to help delegate effectively

  • Understand the task and the results that are needed. Make sure the needed authority as well as resources are provided

  • Choose the person carefully. Make sure the person had the needed skill set to successfully accomplish the task

  • Check on the progress of the delegated task before the completion date. See if additional information or resources are needed and provide necessary feedback

  • Provide recognition and appropriate rewards when the task is successfully completed

Motivating Employees

• Reason individual takes action

• Interest in what motivates employees

• Motivation theories

• Maslow’s hierarchy of needs

• Expectancy value theory

• Motivation techniques

• Motivation myths

Motivation Myths

• All employees need external motivation

• Some employees don’t need any motivation

• Attempts to motivate always increase performance and productivity

• Money always motivates people

• Intrinsic rewards provide more motivation than money

• Fear is the best motivator

• Satisfied workers are always productive

• This generation of workers is less motivated than the last

Can You Motivate Without Using Money?

• Do you know what motivates people who report for you?

• To what extent are they motivated by money, recognition, opportunity?

• Have you motivated others?

Employee Theft

• Costs more than $50 billion

• Small businesses especially vulnerable

• What can you do?

  • Get good insurance covering theft

  • Create culture of honesty

  • Divide up financial tasks

Special Management Concerns: Time and Stress Management

• Other duties and responsibilities

• Personal, family, social activities

• Time management

  • Invest time

  • Indicators of time management problems

  • Time audit

  • After conducting the audit

  • Perceptions of lateness vary

• Stress Management

  • Stress is ambiguous

  • Distress is consequences of stress

  • Conditions for distress

  • Source of stress

  • Role conflict

  • Task overload

  • Role ambiguity

  • Preventive stress management

  • Relaxation techniques

  • Social support systems

  • Take care of your health