You may have started your own business for a variety of reasons. Perhaps you have created something that can really help people, and your passion has driven you to launch a great new startup. Maybe you are driven solely by the potential profitability of your business venture. There’s nothing wrong with that. Maybe your talent and skill in a specific area has brought you to a position of leadership, and now you have gone out on your own to make the most of your abilities. You have passion, talent, and drive to spare. The question is, do you have a grasp on the fundamentals of managing a business? Can you lead people? Do you understand how to market both yourself and your products and services? What is your level of experience with strategic planning? How will you leverage the profit you make in the best way possible? Successful business management takes a lot of skill and knowledge. Some of which you may not have right now.
Don’t be discouraged. There have certainly been passionate and talented people who managed to start businesses that turned into empires without a lot of formal business management training. You can become one of these people as well. You just have to commit yourself to learning about the management side of owning a business. Let’s start with 5 basic fundamentals. You won’t learn everything you need to know, but you will learn enough to get started. From here, you can decide to educate yourself further. You can also use this information to help you understand what you should expect if you hire or contract with people to manage these important business areas for you.
5 Fundamental Basics to Manage the Business
This is the business area that deals with production, quality assurance, shipping, receivables, logistics, supply chain management, capacity planning, inventory, and a variety of other business areas. If your business was a machine, the area of operations would essentially be all of the moving parts that keep that machine running. In order to be successful as an operations manager, you have to be super organized, able to communicate with a variety of people in and outside of your organization and have the ability to keep an extremely complex yet organized schedule. If you have a high growth startup, be prepared for operations management to become more complex the bigger you get.
Action Steps: Don’t be afraid to outsource some of these responsibilities to third parties. You might also consider hiring a COO with a proven track record.
The people working for you are your biggest asset. In order to get the most out of them, you need great leadership skills. You also need to have the ability to understand people, and what motivates them. The better you are able to help your employees develop their skills and talents, the happier they will be, and the more productive they will be.
That is, of course, only one aspect of human resources. In addition to people development, you have to manage a benefits plan, put a payroll system into place, develop employee policies, and adhere to state and federal regulations. You also have to purchase and maintain appropriate workmen’s compensation and liability insurance, establish a retirement plan, and plan any enrichment or training programs your employees might need. Finally, there is recruiting, hiring, and, unfortunately, terminating employees.
Action steps: Consider taking a class at a local community college or business co-op on basic Human Resources Management. For payroll and benefits, you may be able to purchase a decent software package or contract out with a payroll company and benefits administration firm. As your business grows, you may even want to hire a dedicated HR manager and staff. Keep in mind that HR issues can become litigious, so education and expert advice are key.
How are you going to grow your business, expand and improve on your products and services, and maintain a competitive edge? All of these things fall under the heading of strategic planning. If you are like many entrepreneurs, you may have a great handle on part of this. If you are passionate about the products you sell and the services you offer, you may already be elbows deep in research and development trying to make your offerings even better. This is great, but it’s not enough.
Strategic planning isn’t simply improving or adding to your products and services. You also have to spend time learning what your competitors are doing. You have to find ways to create barriers for those who want to compete with you, and you have to pay attention to the world around you. Changes and trends within your industry, fluctuating customer desires, the economy, and a variety of factors all impact your strategic planning.
Action Steps: Keep up with what your competitors are doing. Join professional organizations and subscribe to publications that are related to your industry so that you always know what is happening and what is around the corner. Get feedback from your consumers and pay attention to what they tell you. Read financial and business publications. You may be able to hire people to help with strategic planning, however, this is one business area where your knowledge and participation is key.
Finance And Accounting
Finance and accounting is the business area that deals with incoming and outgoing cash flow, banking, accounts receivable and accounts payable, budgeting, investing, and payment of taxes. This business area works with all areas of your business and requires a lot of education and technical expertise. If you have investors to consider, things can become even more complex.
Action Steps: Commit to taking steps to always ensure that you have a solid picture of your company’s financial position. Then, find a qualified professional to help you with accounting and financial management. If you have grown into anything more than a fledgling organization, it is foolish to manage this area yourself unless you happen to be a CPA or otherwise qualified.
Marketing is the process of developing your brand, promoting your business, establishing a customer base, and ultimately making sales. Marketing encompasses, advertising, web development, and design, establishing a social media presence, content marketing, copywriting, graphic design, creation of promotional materials, planning marketing campaigns, customer service, sales, and data analysis. A great marketing team is a combination of creative and technical professionals and talented sales people.
Action Steps: Consider hiring a good marketing/advertising firm to work with, or developing an in-house team of marketing professionals. It is worth the investment to ensure that you are in good hands.