Running a small business is no walk in the park.
This is especially true today.
In the face of ever-changing business tools, marketing tactics, and employee expectations, you’ve got a ton on your plate.
That’s exactly why your approach to management is so important.
To manage a small business well, you need to not get overwhelmed by the day-to-day hustle and bustle of running a business. Wondering how to achieve that? We have you covered. In this guide to small business management, we’ll look at:
- What “small business management” actually means
- Why doing it right is so important
- The key skills needed to manage a business successfully
- 8 tips for becoming a better small business manager
What is small business management, anyway?
Let’s kick things off by breaking down a small business management definition we can work with:
Small business management is the process of overseeing and coordinating the day-to-day operations of a company (typically in the 0–99 employee range).
Yep, it’s a big job. Whether you’re a business owner or manager, you’ll likely have to make decisions related to hiring people, choosing the right tools for your marketing stack, and more—especially if it’s a small business that doesn’t have dedicated departments.
Basically, you’re in a hybrid leadership role—and the glue that keeps the business together.
So… what exactly does a small business manager do?
The specific duties of a small business manager vary from company to company, but usually includes:
- Hiring, onboarding, and training employees
- Budgeting (for new hires, advertising, and other business initiatives)
- Getting the company’s name out in the market (say, through a brand awareness campaign)
- Setting goals and business targets (ex: quotas and revenue)
- Finding ways to keep customers happy and keep up a high customer retention rate
- Providing a vision for a business (ex: company culture and morale)
- Evaluating company data (ex: employee performance)
Why small business management matters so much
Sure, you obviously have a hand in the essential functions of your business.
But your management style also has big-picture implications on the lives of your employees and longevity of your company.
How so? Let’s look at some numbers.
1. Managers have a direct impact on employee performance and productivity
Data by Gallup notes that a manager determines 70% of employee engagement. Translation? Your approach to management is tied to your employees’ motivation and overall performance.
2. Effective managers help businesses retain their top talent
If you expect your best employees to stick around long term, you’re going to have to, well, be a good manager. If you can do this, you’ll have a better shot at keeping talent—even if other companies try to lure them away with a bigger paycheck.
Piggybacking on the previous study, over half of all exiting employees say that their managers could have done something to encourage them to stay. The same research also notes that only 12% of companies do a good job of onboarding employees.
This data tells us that a big part of managing a business well involves retaining current employees and also encouraging new ones to get off to a positive start.
3. Good managers go hand in hand with positive cash flow
According to recent small business statistics, cash flow and employee retention are the top two challenges that companies face today. And if you’re managing a business, you’ll have to deal with both. After all, this is your profits we’re talking about.
What are the most important skills for managing a small business?
Okay, so what do you need in order to do this job?
Well, the good news is these skills are pretty much universally helpful—regardless of your business or industry:
Clear communication and transparency
No surprises here. You need to make yourself available to employees while also being honest and explicit about your expectations. Regardless of your management style, being personable is also a plus for creating a sense of trust between you and your employees.
Attention to detail
From performance data to revenue and beyond, you must be able to dig into data to make decisions.
What role should you hire for next? Why were profits down last quarter? What’s your strategy for handling huge volumes of inbound calls? The ability to hone in on these details makes it a lot easier when you have to make important decisions later.
Juggling so many tasks means you need to know how to manage, prioritize, and delegate what needs to be done. This also requires that you stick to a schedule while also working effectively as a team and respecting other peoples’ schedules.
Motivation and leadership
From answering questions to asking them, you’re essentially always “on.” When you’re managing a business, you have to motivate employees in addition to yourself, ensuring that morale stays high and everyone’s able to do their jobs to the best of their abilities.
Let’s face it: you’re responsible for making tough choices. This includes everything from major financial investments to letting go of employees.
These choices shouldn’t be taken lightly, but you often aren’t given much time to linger on big decisions. Small business management requires the confidence to make big decisions and do what’s necessary for the company.
8 tips for managing a small business
Here are some eight small business management tips to help you step up your game.
1. Build relationships and a sense of trust with your employees
Becoming a better manager starts with stronger relationships with your workers.
Even so, nearly 70% of managers struggle to communicate effectively with their teams. This can happen for many reasons, such as fear of giving negative feedback or having trouble finding time to talk one-on-one with people.
But making that time is crucial to building trust with your team.
Conversations and feedback are necessary because they help people understand what they are doing well and where they need to improve. (When you trust your employees, it’s also easier to delegate and hand off tasks to them.)
Think of it as a virtuous cycle: being open and honest builds more trust, which in turn supports a company culture that empowers your employees to be open and honest, which builds more trust… You get the idea. Here are some strategies to build that sense of trust:
- Make a conscious effort to check in with your team (at least once per week, ideally in person).
- Take advantage of a team messaging tool to provide frequent feedback and praise when you can’t meet one-on-one:
- Make yourself as available as possible (think: reachable via email or instant message, keep your office open) and highlight specific times when your team can meet with you.
2. When in doubt, set aside extra time in your schedule
Conventional wisdom tells us that to do small business management well, you should be strict and disciplined when it comes to sticking to your calendar.
That said, having your day completely booked day after day is a recipe for disaster.
Don’t make your schedule so rigid that a meeting that runs long or some unexpected issue throws your entire day off.
Instead, allow for some free time sprinkled throughout your schedule to give yourself some breathing room. This makes you more available to your team—and helps you stay sane.
Basically, keep a to-do list, but try to avoid overbooking your own time.
3. Be flexible and regularly reevaluate your company goals
Piggybacking on the last tip, flexibility is key when you’re managing a small business.
Spoiler alert: your goals and projections aren’t always going to be 100% accurate.
Maybe your revised sales quotas are unrealistic. Perhaps a hiccup in your finances means holding off on that new hire.
Either way, don’t look at these issues as “failures.” Be willing to make adjustments to your strategies and assess your data on a regular basis. Keeping an eye on analytics (think: employee performance dashboards, sales numbers) can help you avoid any surprises.
4. Create processes and workflows that can be automated and replicated
Anything you can put on autopilot to save time in your day is a major plus.
Specifically, think about common tasks that require templates (think: emails, invoicing) and processes that are uniform (think: new employee onboarding).
If you can automate your process and workflows, it also makes it easier for your team to get work done when you’re unavailable. (Handing off a task to someone else with a defined process already in place means there’s less of a chance for mistakes.)
Tasks both big and small can be put on autopilot thanks to today’s tech.
For example, you might have to sift through data and dashboards every week. Whether you’re dealing with employee or website performance, having reports summarized and ready in your inbox is a huge time-saver.
Consider how you can set up performance reports that get automatically delivered straight to your inbox in Google Analytics to keep a pulse on your website traffic without leaving your email. Most major tools can provide the same sort of summaries for everything from email data to social media data:
For example, setting up an auto-attendant and call-routing flow for your phone system makes sure that callers get in touch with the right people faster. (If you’ve ever called a company and then hit different numbers to navigate their phone menu, you’ve already encountered this!) Here’s how it looks in RingCentral’s cloud phone system:
5. Learn to prioritize your day-to-day tasks
When you’re managing a small business, you should be able to quickly decipher between what needs to be done ASAP versus what can be put off for later.
This means coming up with a prioritization strategy. For example, some managers might use a version of an Eisenhower Matrix to figure out which tasks are most pressing. Essentially, this strategy helps you assess duties that are both urgent and important:
6. Invest in tools and resources to save time
The average day for a small business manager can be daunting—there are literally hundreds of things to do.
As we mentioned earlier, third-party tools can help do the heavy lifting when it comes to tedious or time-consuming tasks.
Integrating technology across your team can help everyone communicate and collaborate more efficiently with each other. (You don’t have to try fancy new technology either; sometimes upgrading something as basic as your phone system could help you save money and time in the long run.)
For example, these tools are staples of small business management and are important to invest in if you need to work smarter:
- Project management platforms (e.g., Trello, Asana), which highlight employees’ to-do lists, tasks, and ongoing progress
- Sharing tools (e.g., Google Docs, Google Sheets, Google Drive), which allow everyone to work together and easily share documents
- Communication and collaboration tools (e.g., RingCentral), which allow for frequent check-ins, status updates, and meetings—especially important if your team is scattered around the world
7. Focus on what you’re good at first
The role of a small business manager is often a sort of jack of all trades.
But as the old saying goes, “jack of all trades, master of none.”
Realistically, you can’t be a superstar at everything that you do. You’ll naturally excel at some aspects of running a business and struggle with others.
That’s okay. Just focus on your strengths and figure out what you need to be successful.
For example, you might be a rockstar at motivating employees and delegating tasks. On the flip slide, you absolutely loathe accounting and billing. That means you can either shift those responsibilities elsewhere—or get a tool to make your schedule more manageable.
You don’t have to put a round peg in a square hole when it comes to your skill set.
8. Invest in your ongoing education
It might sound cliche, but nothing in the business world stays the same for long.
Office and workplace trends change. Your teams’ expectations are evolving, too.
To make sure that you’re continuously learning, you need to be open to new ideas and opportunities to constantly learn more about small business management. Doing so ensures that you’re up to date on best practices without running the risk of getting stuck in your ways.
For example, you can find an in-person or digital business seminar to attend through platforms like Skillpath and AMA. You can also ask people in your network which courses or events they recommend personally.
If you want an immediate crash course in management, look no further than the library (or Amazon). To do even more homework, here are some small business management book recommendations that we’ve found interesting:
- The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It
- The Lean Startup
- Zero to One: Notes on Startups, or How to Build the Future
- Boss Life: Surviving My Own Small Business
“Do I need a small business management degree?”
Of course, a degree in business is helpful toward reaching your full potential in running a small business.
Of course, you probably also don’t have the time for a full-blown traditional degree program right now. That’s okay. You still have options.
For example, there are platforms like Coursera that offer college-level coursework and materials from actual degree programs in business management:
There are tons of learning opportunities out there that fit different schedules, budgets, and workloads. Look for ways to introduce your team (and yourself!) to new ideas and perspectives.
Ready to step up your small business management skills?
There are obviously a lot of moving pieces when you’re running a small business, even if you’re a team of only five (or one).
That said, you can do even little things to get more customers, run more efficiently, and help your business thrive.
The good news is, there’s no “right” approach or style you should adopt—you just need to learn what works for you and your business, and these small business management notes can help you figure that out.