According to the US Small Business Administration, there are nearly 30 million small businesses in the United States employing 47.8% of US workers. Despite this fact, many SMBs still struggle when it comes to unlocking growth and long-term scalability. This is due, in part, to a lack of essential small business manager skills.
This is understandable. Learning how to manage your own small business can be a challenge, especially if it is your first venture. Small business manager responsibilities include managing your own employees, taking care of your company’s finances, and adapting to ever-changing customer needs and new technology.
In this post, we will share 7 essential skills you need to manage small business. We’ll look at what your role is as a small business manager and share tips to help you become an effective leader.
Why Develop Small Business Management Skills?
If you are a small business, then you probably don’t yet have a dedicated human resources department. This means that it falls on you to manage all your HR tasks. This includes everything from managing your employees to processing payroll and monitoring performance. It’s also your responsibility to develop your company culture and build a strong reputation that helps you attract and retain top talent.
Here are some of the reasons why it is so important for you to develop your small business management skills:
- As a small business manager, you have a direct impact on employee performance and productivity. In fact, according to data by Gallup, managers account for at least 70% of the variance in team engagement. In other words, your management style and the skills you possess have the biggest influence on how successful your workforce is. If you work to develop your small business management skills, you can lift morale and inspire your team to give it their best.
- How you manage small business tasks has a big impact on your potential for growth. Your team looks to you for guidance and support, so if you are transparent, approachable, organized, and motivated, then they will learn to work that way too, helping you build a strong business from the ground up.
- Your management skills will also help you attract and retain top talent. Plus, by developing the right soft skills, you will be able to communicate, motivate and lead your employees to meet and accomplish the goals and objectives you set them.
- Finally, the better your small business manager skills are, the better your cash flow will be. And this is ultimately what running a business is all about: generating profit.
Role of a Small Business Manager
As a small business manager, you have a number of roles and responsibilities that enable you to align and coordinate all aspects of your business. It’s on you to manage the bigger picture and make sure everything runs smoothly.
The specifics of your role will depend on the nature of your business but, generally speaking, the management of small business will probably involve:
- Small business hiring, onboarding, and training
- Defining and implementing your business strategy
- Designing and managing your organizational chart (the hierarchy of your company)
- Managing budgets (new hires, advertising, suppliers, etc.)
- Marketing and brand awareness
- Setting goals and objectives (individual and overall)
- Finding ways to increase customer retention
- Creating strategies to motivate, engage and retain your staff
- Nurturing a company culture based on your values and mission as a business
- Evaluating and improving company metrics (such as employee performance)
And all this requires a certain set of skills.
7 Top Small Business Manager Skills
As a small business manager, your management style has a direct impact on the success of your organization. Your ability to develop the skills and competencies you need to support and develop your workforce will determine whether or not your business is able to grow and succeed in the long term.
Take a look at the following essential small business manager skills. These are required in order to develop an organized, motivated, and productive workforce. Do you need to work on developing any of these skills?
Communication and Transparency
Clear and transparent communication is the first essential skill you need in order to effectively manage your small business. As a leader, you need to make sure you establish clear goals and expectations for all of your staff. You need to check in regularly and provide honest feedback to each employee on a regular basis.
Make sure your workforce knows that you’re available and approachable. They need to see you as a source of guidance, and this means they need to understand what you expect of them. Set up open communication channels and offer support whenever needed.
According to Christina May, Founder & CEO at Illumine8: “The best small business management tip I can give other entrepreneurs is to establish a culture of transparency within your organization. Constructive, timely, and candid feedback can boost employee and team performance. Entrepreneurs often hold feedback until formal reviews because they are caught in the day-to-day management of the business. Making transparency part of the day-to-day management of your employees will help them improve their work faster while accelerating results for the company.”
As a small business manager, you are responsible for juggling many balls. This means you need to know how to manage, prioritize and delegate all your tasks. You need to be aware of legal and compliance obligations, and you need to stay on top of your schedules and budgets. You need to motivate your staff, and you need to track their progress towards their goals and objectives.
The only way to stay ahead of the game is to be as organized as possible. An HR checklist can help you document everything so that you can stay organized. You can then use to list to keep track of all your plans, policies, and processes so that you can protect your employees and create a roadmap for success.
Attention to Detail
Attention to detail is also an essential skill for small business management. Developing this skill is the best way to ensure quality, accuracy, and consistency in your business.
Although some people are naturally better than others at paying attention to detail, it’s, fortunately, a skill that you can easily develop. The best way to ensure accuracy and consistency in your tasks is to give them your full focus. This means avoiding multitasking and distractions. Set clear goals for your tasks and create a schedule for each day. Make sure you regularly track all your business metrics so that you don’t miss any important clues.
As a small business manager, you are responsible for making a lot of important decisions. For example, you have to decide which financial investments you are going to pursue, and what your long-term objectives are as a business. If an employee is struggling, you have to decide whether there is enough potential for them to improve with the right guidance or support, or whether you need to let them go. All these issues and more ultimately come down to one thing: having the confidence to make the right decision for the benefit of your company.
You’ll probably have to solve problems, big and small, on a daily basis. When you have to make a decision, focus on remaining calm under pressure and not making snap decisions. Think things through and focus on the bigger picture. And, most importantly, keep your emotions out of it. As a business manager, you need to remain cool, calm, and collected at all times so that you can make the best objective decisions for the good of your business.
As with organizational skills, learning how to manage your time is vital if you are to succeed as a small business manager.
Planning your week is the key to good time management. Create a schedule for each week, so that you can prioritize your tasks and stay focused. Work on similar tasks on the same day so that you’re not jumping from one thing to another.
Try and identify which tasks take up most of your time and see if there is anything you can do to redress the balance so that you can prioritize your most important duties. Are there any changes you could make to your schedule that would make you more efficient? Always aim to work smarter, not harder.
Motivation and Leadership
Finally, perhaps one of the most important small business manager skills you should be developing is your ability to be a motivating leader.
One of your most important roles as a small business manager is boosting morale so that everyone is motivated to do the best they can. This means working on your communication skills and reminding your team that you are there to guide and support them.
For example, a good leader should:
- Lead by example
- Encourage personal and professional growth
- Offer guidance and support, as well as regular feedback
- Motivate and encourage development
- Communicate efficiently and effectively
- Be respectful and instil hope, not fear
According to Steve Benson, Founder and CEO of Badger Maps:
It’s important to constantly teach your employees to make them successful at their job and keep them motivated. I break the things I try to teach my employees into two groups. One is the strategy and direction of the business; the other is the set of skills that they need to be successful. I believe that regular communication and training is really important, because both of these topics are moving targets.
How to Manage a Small Business
As a small business manager, most of your time will be taken up with three important aspects: managing your employees, processing payroll, and managing your finances.
How to Manage Employees in a Small Business
Your employees are your most important asset. You need to make sure you hire the best talent and nurture their potential so that they remain at your company. You also need to make sure you are clear about your policies, processes, and procedures from day one so that each and every employee is clear about what you expect of them. The more effectively you lead your workforce, and the clearer you are about what their role is within the company, the more loyal, productive, and motivated they will be.
The best way to clearly communicate your expectations from the start is to create a comprehensive employee handbook that clearly explains all your policies, procedures, and expectations. Your handbook should include your codes of conduct, and information relating to compensation and benefits.
It should provide employees with information about their rights, and what they can expect from you as an employer. This enables you to establish clear guidelines and expectations as well as safeguarding the company if those expectations are not met. Ultimately, by documenting all your information you will be able to clearly and consistently manage your workforce on the road to success.
If you don’t already have an employee handbook, then you can download Factorial’s free employee handbook template to get you started. In the template, you’ll find all of the central topics that you need to include while drafting your handbook. That way won’t miss out on anything important!
How to Manage Payroll in a Small Business
Another important responsibility as a =manager is understanding the ins and outs of payroll for small businesses. There’s a lot to keep in mind, and it’s important to get it right. Firstly, you need to make sure you are tracking employee hours so that you know how much to pay your staff. This included tracking time off, sick leave, and overtime, and making the necessary deductions.
You also need to make sure you are aware of all your legal obligations as an employer. This means understanding the requirements set by the Fair Labor Standards Act (FSLA), such as minimum wage and record-keeping obligations. Make sure you are up to date and check federal and state laws regularly.
One way to effectively manage your employee payroll is by investing in payroll software. The main advantage of payroll software is that you can use it to streamline your payroll management processes. This saves you time and helps you avoid errors on your payslips. You can also use a payslip template to make things easier. For example, with Factorial’s free payslip template, all the correct fields are already in place, so you just need to fill in the blanks.
The other alternative is outsourcing your HR obligations, including payroll, to a third-party provider. However, this obviously comes at a price, so it may not be a viable option if your company is just starting out.
How to Manage Finances in a Small Business
The final aspect to consider is how to manage money in a small business. This means learning everything you can about managing your business finances in the most efficient and effective way possible.
Managing finances can be a challenge for any small business owner. You need to work on your accounting skills and learn how to apply for a loan and draft a financial statement. You need to understand how to keep good credit, monitor your books, keep track of income and costs, and plan ahead. If you get all this right, then you are more likely to create a stable financial future in which your company is less likely to fail.
There are a number of choices here. You can either hire an accountant to manage all the above, or you can invest in DIY accounting software. Whatever you decide, make sure you keep track of all your small business expenses. You also need to make sure you have clear financial projections. This will help you anticipate and address any potential obstacles.
Small Business Manager Tips
Let’s finish by taking a look at a few management for small businesses tips and best practices.
How to manage a small business effectively:
- Build relationships and develop a sense of trust with your employees.
- Build communication into your day-to-day workflows and establish as many communication channels as possible.
- Make sure all your employees have all the tools, resources, and support they need to perform their best.
- Offer consistent feedback and hold regular check-ins and appraisals with your staff. This will help your employees understand what they are doing well and where they need to improve.
- Prioritize accessibility. Make yourself as available as possible and highlight specific times when your team can meet with you.
- Finally, the best way to become an effective small business manager is to motivate and empower your employees. According to Nate Martin, CEO of Puzzle Break: “For companies below a certain size, employees can and should be made to feel directly connected to the success and growth of the business. Even if they’re not equity partners, helping to build a successful business – and being recognized as an integral component – is a point of pride, a valuable résumé item for the future, and does wonders for morale and motivation”.