13 Tips for Starting and Managing a Small Business

Managing a small business is not easy. Without the resources that large corporations have come to rely on to make business run smoothly (think HR departments, finance, legal, etc.), it can be difficult to learn how to start and manage a small business. Between incorporating, hiring, firing, and learning how to manage a small business budget, entrepreneurs have their hands full with just the basics of how to manage a small business effectively.

1. Take care of your mental health

It might seem like a strange place to start when talking about how to manage a small business effectively, but it’s the foundation of starting a small business. Starting and managing a small business can take a toll on business owners’ mental health. It’s important that entrepreneurs take care of themselves through the process. Reserve time to decompress. Whether it’s meditation or yoga or simply going for a walk and listening to a podcast, taking “time off” is an incredibly important part of managing a small business effectively.

The other key is to try to adopt some level of flexibility. Your business may not turn out exactly the way you envisioned. Give your business room to pivot and adapt to whatever trends you’re seeing in the market.

2. Find the right setup

While there’s a lot that comes with managing a small business, it’s important to start with the basics. A clear vision or business purpose will help you get started and define a clear path for your entrepreneurial journey. Do some market research. Make sure your small business can meet a need in the market and that there is significant demand for your product or service. Once you’ve established the need, you can incorporate or set up a separate business LLC. The key here is to make sure that your business is a separate taxable entity — even if you’re the only employee.

Separating your small business from your personal assets is more of a safety net than anything. This way, your personal assets will be protected should your small business run into financial or legal issues.

How to Manage Accounting for a Small Business

3. Separate business from pleasure

Speaking of protecting your personal assets, even if you don’t incorporate or set up a separate LLC, you should separate your business financials from your personal financials. Open a business-only bank account and sign up for a credit card that you’ll use only for business expenses. This will make your life a lot easier as you’re figuring out the best way to manage receipts and how to manage taxes for a small business.

4. Hire a professional

Another practice that will make your life a lot easier come tax time is working with a bookkeeper. While this isn’t always an expense that small business owners can afford, it will give entrepreneurs peace of mind that their finances are being managed correctly. A bookkeeper can help business owners manage money in a small business and manage taxes and payroll.

You’ll also want to have an accountant on your roster of professionals, especially at tax time. Unlike a bookkeeper, an accountant can provide advice on the best ways to manage your finances, along with tips and tricks for optimizing your taxes. A good accountant will make suggestions as your business grows to help manage cash flow.

5. Lean on technology

If you can’t swing the costs of a bookkeeper, try your hand at doing your own bookkeeping. There are many accounting apps that can help business owners manage expenses and keep finances in check. Two popular software programs to consider are Freshbooks and Quickbooks. (More on those below.)

6. Pay the tax man

Another key to managing accounting for a small business is to always pay your taxes. Be aware of your tax payment schedule and how much you’re likely to owe. An unexpected tax payment can cause financial ruin for a small business. It’s incredibly important to always manage cash flow and know when (and how much) you’re expected to pay.

What does it mean to manage a small business for success, anyway?

It means knowing how to utilize your scarce resources to achieve your set business goals. This is a loaded statement. So let’s break it down a bit so you have a deeper understanding of what it means to successfully manage your small business.

Every startup and existing small businesses all face the same problem — lack of adequate resources. And yet, this is the stage where it would seem like there’s a never-ending pile of things to do. You have to: register the business; set up the operations structure; hire people into key roles; invest in business administration tools, have a marketing strategy; work out the financials… the list could go on.

The point is you won’t always have all the resources you need to solve them all in one go. Instead, you must know how to appropriate your available resources in such a way that business operations flow without hindrances and you remain on track to achieve your goals.

Speaking of business goals, there may be slight variations in the description, but ultimately, it all comes down to profit generation. So the question is how can you utilize your resources to remain fully functional and profitable? That’s what small business management is all about.

What are the best small business management tips for succeeding in today’s digital landscape?

Successful entrepreneurship means making sound business decisions. As the small business manager or owner, you are essentially the glue keeping both sides of the business (client-facing and internal processes) together.

By reference point, we mean a documented business plan that guides your decision-making. Whenever things start to feel like they’re spinning out of control, your business plan keeps you grounded and focused on the important stuff.

To create an effective business plan, start by outlining your business goals and then describing how you intend to achieve them. Break down each core business function — operations, human resources, payroll, billing and invoicing, marketing, sales, etc, and write down how you want them to operate in order to achieve your goals.

31. Build Good Relationships With Your Employees

“Good managers give their employees two things: goals and ownership. I set clear goals for my team’s work and hold them accountable for completing tasks. That said, I don’t micromanage my employees. I let them have plenty of space to use their talents and learn new skills.

I also make people feel they have a stake in the company as a whole, not just in their own work. For example, I recently bought a new office building. I kept my employees informed throughout the process—from property searching, to negotiating, to signing the papers. Since I kept them in the loop, they’re excited to move to our new location. They’ve even made some suggestions for building modifications that I’ll have our contractors incorporate during the remodeling process.”

Sources:

https://bmoforwomen.com/business-ownership/how-to-manage-small-business/
https://www.b12.io/resource-center/small-business-basics/how-to-effectively-manage-your-small-business-for-success.html
https://www.fundera.com/blog/small-business-management