Small businesses usually find themselves being disadvantaged compared to medium or large businesses, because they do not have the resources available. The owner/operator is required to wear a range of different caps, which has a range of negative impact on the business. The business is managing the owner/operator, which means that the strategic perspective is lost and as a result the business is not able to move forward. Now let us have a closer look at this cause and effect.

The business is managing the owner/operator

When there are 117 different things to do in the business every day but there is only a few people (or one person) to do the tasks, some things are not done very well or not done at all. As a result the owner/operator is working like a firefighter – putting out the fires as they appear, rather than prevent the fires to start in the first place. This becomes a viscous circle, which leads to the next point

The strategic perspective is lost

During the working hours the owner/operator is focusing on the operational tasks, and it is hard to take a few steps back and look at the business from an objective perspective

As a result the, the business owner does the same thing day after day, week after week and so on. Unless the owner/operator has an active supporting network to step in and provide guidance, the owner will keep making the same mistakes and end up the same place that many before has ended.

Get an advisory board

The solution is to establish a formal or informal advisor board. An advisory board should consist of a group of experts of their chosen field. It can be private friends (though this can include some complications and as such is not advised). An alternative to an advisory board is finding a business coach or even better – a business mentor. They all have in common the fact they do not work directly within the business and can see what is going on and help managing the business. Once an advisor has been identified, it is important to identify the core business functions and analyse if certain activities can be fulfilled more effectively, and maybe even outsource some of these activities.

Outsourcing

Outsourcing is a great tool to manage the business with, in particularly if the owner keeps attending fires. Outsourcing simply means that someone else is a called in as a “hired gun” to do some of business activities, in particularly the activities that does not contribute to the business profit. One such thing is bookkeeping and accounts, which is very time consuming, but is not a core business function (unless you are a bookkeeper). When outsourcing the bookkeeping function to someone else, it is very important that the bookkeeper not only does the simple bookkeeping tasks, but also provides the owner with the proper reporting tools that the owner need to manage the business.

The bookkeeper should be able to provide the owner with the following reporting tools:

• Profit & Loss

• Balance Sheet

• Cashflow report.

If you do not understand how to read these reports, ask your bookkeeper to explain to you what it means. If your bookkeeper cannot explain this to you, it is probably best to find a new bookkeeper. Your accountant can also help you explaining what indicators to look out for, but the accountant usually charges a whole lot more than the bookkeeper.



By: Rasmus Nielsen

About the Author:

Emery

nickelle84 asked:


I need to set up some project management software for a small business, but we work from different parts of the country so it’d be easier if we could all be networked into it, or if there is something online.

So first, is it possible to purchase something like MS Project and have computers all networked onto the same documents?

And second, is there anything online that would do that same thing?

Hugh

Bj Penn asked:


my dad owns a business in socal and im at northeastern univ almost done with this major and want to get a job that is most marketable for me since this is first full time job other then internships ive done.

which entrepship and small business management is that major make it so i am stuck running my dads business and not going into the corperate world or doing lets say global operations?????????/

please someone help me im kinda anxious! i did real well in school but friends of mine with marketing degress and finance have clear cut paths
is it possible with that major to go into other fields of business or will i be outcompeted with people that have majors exactly for there work???

im thinking finance or global operations??

Melville

dude. asked:


Recently went into business for myself, a plumbing co, business is good, real good, need to hire people,

Problem, I’m a damn good plumber but I know nothing about the paperwork,,,, taxes, insurance, workman’s comp, payroll, etc, etc. I can’t afford to time away to go to school nor can I afford to hire a fulltime bookeeper yet,

Are there any reputable companies that would provide just that sort of service, a place where a small businessman can contract out the day to day office paperwork and concentrate on keeping the customers happy?
I’m in Houston, if it makes a difference.

Lane

Ryan M asked:


My company (35 employees in home office, with 10 employees scattered in 5 remote locations) is looking for a product/service that we can used in a web based environment to track important projects and collaborate on those projects. We could host the product on our own system or use a hosted package, either option is fine.

We do NOT want something over complicated, but we do want to be able to do file sharing, have threaded conversations, track to-dos & responsibilities, set & report on milestones, track whether or not key due dates are being met.

Managing the system should be relatively easy. I am the only IT person on staff and already have a full plate.

Thank you in advance for your feedback.

Broderick