Resources for Young Entrepreneurs
The importance of management
Implement good management practices
Management involves setting goals and making decisions based on careful planning. As the business owner, you are responsible for all aspects of the business. Your management skills in guiding the business, and your employees if any, will play a large role in the success of your business.Management encompasses the following areas:
- Planning. Setting the goals and strategies for your business.
- Organizing. Deciding on tasks, delegating, scheduling, etc.
- Staffing. Hiring, training, and terminating (if necessary) employees.
- Directing. Supervising and motivating employees.
- Controlling. Evaluating and analyzing how you are doing in your goals and reacting accordingly.Becoming an employer
Employees add another layer of complexity to your business so think it through carefully before hiring. Hire the right people, train them well, keep them happy so they will stay, and be aware of taxes and legal
requirements. Initially, you may want to consider hiring outside contractors or temporary help instead. (Make sure you satisfy IRS requirements for contractors.)
Plan your hiring
Hiring employees is expensive and shouldn’t be approached casually. Make sure your decision to have employees fits in with your goals as outlined in the business plan. Write out a job description that indicates exactly what is expected of each employee. Interview several people and select the one you feel has the best qualifications. The majority of employers consider attitude of potential employees as the number one trait in their hiring decision. It is a good idea to have a 30 or 90-day trial period before taking someone on permanently. The wrong employee can cause a great deal of damage to your business.
Train employees well
Training is expensive but necessary. You want well-qualified employees who will do things the way you need them done. A well-defined company policy handbook plus a job description outlining duties, responsibilities, ethical standards, and criteria for success will be valuable. You may want to invest in your employees by sending them to special trainings. Small business owners should pay special attention to cross-training employees in areas other than those specifically defined in their individual job descriptions.Working with employees You want your employees to be satisfied, motivated, and involved with your business. Keep the lines of communication open. Let your employees participate in the goals of the business and give them constructive feedback – positive as well as negative – on their progress.
Legal requirements
Talk to your accountant and lawyer to make sure all the paperwork and legal requirements of having employees are met. Keep written records of personnel matters. There are many laws regarding working conditions, minimum wages, and safety considerations.
Some of the areas you should consider include:
- Workers’ compensation insurance
- Employee Taxes
- OSHA requirements
A management information system
The sources of information listed in ” Gathering information ” could lead to significant amounts of data being collected. You need to consider how you will deal with this information. You need a system.
If you use a PC, there are some computer programmes available commercially which will help you organise and analyse the data. Alternatively, a paper-based system might suit your business needs.
Whichever type of system you adopt, it must:
- Be simple to use and follow (otherwise it will fall into disuse)
- Provide analysis on which to base decisions at the right time (it’s no good finding out that a new competitor is opening up once they have successfully taken most of your customers)
- Give you the management information you need (too much detail can be as bad as too little – you need to be able to disregard irrelevant information).
Only you can decide what system best suits your business.
Time taken at the planning stage in setting up a system will pay for itself manyfold once it operates.
