Think like a manager
Managing a small business demands that you develop not only a whole new set of skills, but also a completely different way of using existing skills.
You are responsible for everything: setting it up, getting it established in the marketplace, growing it, employing staff and moulding them into effective, empowered team members who will support you in achieving your goals and objectives.
The first principle for improving your management skills is to identify areas where your performance is not up to scratch. Once you know your weak areas, you can start working to improve them: read magazines like Grow Your Business, buy self-improvement books on the specific subject, find a mentor who can help you, attend seminars or courses.
Consider your performance in the following areas of effective management.
As a manager, you’re responsible for creating a happy, fulfilling, challenging work environment and keeping your staff motivated. Motivation is the ‘enabler’ that inspires your employees to willingly do what you want them to do, embracing your goals as their own. In turn, the confidence that flows from employees’ increased sense of accomplishment fires greater drive and incentive to give their best.
Employees crave managers who can assist them to enjoy, and derive satisfaction from, their jobs. A manager who sincerely believes that most people a) are not inherently lazy and b) do not like being lethargic and bored, and also understand that their role is to channel their team’s energies into an acceptable work performance, has a head start to becoming a top motivator.
While numerous theories about motivation have been formulated through the years, the tools of motivation can be distilled into two basic types:
Tools of maintenance
The practical tools that maintain rather than inspire employees’ efforts on the job. They include salary, fringe benefits, job security, working conditions, company policy and administration, status, and management competence.
Tools of satisfaction
These are the less-tangible tools that inspire employees to greater achievement. They include recognition, the work itself, achievement, advancement, additional responsibility, and personal growth. Research shows that the last factor is so important that employees often accept a lower salary in exchange for the opportunity of growth.
While it’s essential to get the maintenance tools right in order to satisfy basic needs, the majority of your motivational efforts should focus on tools of satisfaction.
Praise, feedback and open, free communication are the primary motivational keys in a small business.
Be generous with feedback and sincere with praise. Routinely thanking employees for their daily efforts is essential, but it is especially important to recognise extra effort, as people need this individual recognition and boost to their self-esteem.
Recognition not given for work ‘above and beyond’ has an extremely de-motivating effect that leaves employees wondering why they bothered – and next time, they won’t!
Be imaginative so that praise never becomes mechanical, and personalise it by making specific mention of the action you are praising. Sometimes public praise is appropriate, at other times a personal handwritten note or even a token gift is warranted.
Encourage open, honest, two-way communication with your staff in an atmosphere of trust. Talk to them about how they are doing, their progress, problems that may be evident. When you need to discuss a shortfall in performance, use the opportunity for coaching.
Get the message out
If you choose to enhance just one set of skills, make it your communication skills. Even if your overall management skills are superb, poor communication ability can result in less than optimal performance.
Good managers keep their staff informed, knowing that open sharing of information leads to empowered people. The more clearly you detail your expectations, goals and objectives, the more concisely you give instructions for each task and explain the reasons for doing it.
The more feedback you provide about completed tasks, then the greater the chance that employees will meet performance requirements and expectations, and the less chance there’ll be of serious mistakes arising from misinterpretations.
Plan of attack
Many managers get so caught up in the day-to-day running of their business that they find they have no time to spend in forward planning. Big mistake: lack of planning makes it almost impossible to achieve business goals, which puts your business’ future at risk.
Ideally, your basic planning tool should be the business plan you prepared when you set up your business. Keep this plan alive and evolving: conduct a major review at the end of each financial year, comparing results against estimates, analysing the differences to identify where you’ve fallen down and where you’ve done better than predicted, and determine – in both instances – how you can further improve performance.
Measure your performance against your mission statement to ensure the two remain aligned.
Prepare a SWOT analysis (strengths, weaknesses, opportunities and threats) and write up a plan to build on your strengths, address your weaknesses, capitalise on opportunities and address threats.
Update your plan for the coming financial year by preparing new sales, expense, profit and cash flow budgets for the entire year, and also broken down month by month.
Each month, compare your actual financial results with your budgeted figures. This lets you identify potential problems such as poor sales performance or expense blowouts and nip them in the bud before they get out of hand and negatively impact your business.
With each goal you achieve, set a new one so that you are constantly stretching your own and your staff’s abilities.
If your business starts moving ahead more quickly than you anticipated, more detailed planning becomes critical to ensure you can sustain that growth and your cash flow.
It’s also important to have five and 10-year plans in place to help you structure long-term growth strategies such as expansion through branch offices, e-commerce, diversification; increases in staff numbers; creating new jobs and reallocating tasks within existing jobs to make better use of the employee skills.
When you talk growth, inevitably the question of finance will come up: any bank manager will tell you that they like organisations that use their business plans as an operational tool. A dog-eared, annotated, coffee-stained business plan is always looked on more favourably than a pristine document clearly produced to impress.
A manager needs vision
A man whose greatest claim to fame was that he was a good encyclopaedia salesman has become the guru of small business owners, writing the greatest selling small book of all time called The E-Myth.
Michael Gerber said the biggest mistake made by a small business owner is to believe that his or her business is different to every other business.
“Many business owners are simply technicians and not true entrepreneurs,” he argues. “Technicians see their business as a job but it should be a product of an entrepreneur.”
The argument runs that as a consequence the technicians, be they hairdressers, consultants, retailers or manufacturers spend most of their time working in their business, where on the other hand, entrepreneurs work on their business.
Gerber says the starting point for creating a successful business is to look to the future, then look back at your life. “You need a retroactive view of your life as if you are at your own funeral,” he says. “You need to create a vision of your business and your related life and be happy with it.”
Implementing systems throughout your business creates the opportunity for the entrepreneur to work on the business.
“The technician is work-centric, the manager is systems-centric and the entrepreneur is vision centric,” Gerber insists.
The bottom line is that becoming managerial and implementing systems creates the time to work on the vision for the business. “Vision is the most critical thing,” Gerber says. “The vision will determine whether you are really going to be successful.”
Author: Biz Think Tank
BizThinkTank is a dedicated small business website, with a wealth of regularly updated tips and articles. Whether you’re looking to start a business or grow your business, you’ll find a wealth of handy advice and information.