Small business management: A step-by-step guide featuring 6 real businesses

What is small business management?

Small business management involves aligning and co-ordinating all aspects of a small business. That can include managing employees, suppliers, finances and all the daily processes of the business. A small business manager will often also be responsible for overseeing the big-picture business plan.

Everyone’s definition of the company size of a “small business” is slightly different, but for our purposes, let’s just say these are companies with 1 to 99 employees.

Why is small business management important?

Well, there are a few reasons why good small business management is important, but here are the big ones.

It directly impacts employee productivity and performance

What a small business manager says or does will have a direct impact on employee performance—especially if this person is also the boss (and especially if you don’t have a human resources team yet).

Unlike a manager of a larger organization or business, a small business manager will likely have constant day-to-day contact with their employees.

So, their management style will be one of the most important factors in whether employees succeed or struggle. A manager can lift morale and inspire everyone to work together—or cause it to plummet.

It builds the foundation for company growth

A small business manager is often one of the first managers in a company (if not the first manager). And if this person is good at their job—and stays with the company as it grows—they will be a treasure trove of knowledge for new employees.

From the product development history to company dynamics and politics, to a holistic vision for the future, there’s a lot that this person will learn during their time as a manager, and they’ll be a key piece for the company’s growth plans.

Cash flow, cash flow, cash flow

Can’t run a business if you’ve got no cash. Do you want to maintain a healthy cash flow or be over budget every month? When it comes to management, your business finances are a huge part of the job.

Do you (or your manager) know how to hire strategically so you’re not overspending? What about choosing the right software and tools to fit your actual business needs (instead of trying to copy what Fortune 500 companies are doing with their tech stack)? These are all important parts of small business management.

(A manager who’s also the small business owner will probably have no trouble with this one.)

What are the most essential skills for running a small business?

Transparency and clear communication

Transparent and clear communication is a must, and this applies wherever you’re running your small business. This may not come naturally to many folks, especially because entrepreneurship can be a lonely journey in the beginning, but it’s essential as you’re building out a small business. All those great ideas can’t just live in your own head. You have to be able to communicate them to others who can help you turn them into reality.

Attention to detail

From performance-related metrics to business administration and revenue—and much more—there’s a lot of information to pay attention to in order to make good business decisions (often, in real time).

Incorporating a software as a service business model can be a game-changer for small businesses, offering scalable solutions that adapt to their evolving needs. And if there are tools that can help you measure and track this information, even better. (More on this below.)

Effective time-management skills

With so many tasks to juggle when running a small business, time management skills are a prerequisite of the job. You have to know how to manage, prioritize, and delegate, as well as stay on track when working with your team.

6 small business management tips from 6 small businesses

1. Build communication into your processes: TownCenter Partners

When people talk about business relationships, most will think of customers and prospects—but what about the business relationships with your own teammates?

Everyone knows and talks about how important communication is, and it can be even more challenging if you’ve got teammates in different countries and time zones?

Employees often get siloed, even when they’re in the same office, so how can you make sure that everyone’s communicating regularly?

The best thing you can do is to build communication into your day-to-day workflows. What that means: Have a good communications platform that lets everyone talk to each other through whatever channels you use as a company. Plus, using a work time tracking app can help monitor productivity and ensure efficient collaboration despite geographical distances.

Phone calls, video meetings, instant or SMS messaging—these are the most common channels that employees use to talk to each other (and often, clients and prospects as well), so your task is to make sure that they have the right tools that allow for that.

And realistically, you only really need one tool, because there are many unified communications solutions that have all of these in one app. For example, Dialpad’s desktop and mobile app lets you do all of those things, from the same place: