This is the first article in a series about powering your small business through 12 areas of internal management.
Even in the best economic climate, growing a successful small business isn’t easy. And in today’s business environment? Small business owners are being challenged on every front! After months of adjustments to keep business moving forward, it seems like we’re all waiting—for the pandemic to end or the economy to rebound or the government to outline PPP forgiveness guidelines.
Waiting is hard, but it doesn’t mean you have to put your business on hold. There are many steps you can take to power up your business as you wait! By using this time to assess and hone your financial management strategy, your business will be all the stronger once the world starts up again in full.
Something that I’ve found especially helpful over the years is reviewing 12 areas of internal management. I helped develop this model years ago when I served on a task force during my 15-year stint as business manager of a financial management consulting firm. That original model had 10 areas of internal management, and I’ve since added two others after years of using it with my clients. The 12 components are:
- Facility Management
- Financial Management
- People Management
- Risk Management
- Service/Product Delivery
- Relationship Management
- Social Impact
Each of these areas deserve a deep-dive, but I thought a 12-part blog series giving a high-level overview of each component would be a huge help to small business owners right now! We’ll start with the tie that binds them all together: Strategy.
Strategy is both a component of the model as well as the way the model works. Without strategy, none of the other components will function properly. So what is strategy? Strategy is a plan of action designed to achieve the overall goal. For small businesses, that plan of action consists of coordinating all the components to make the business a success.
But strategy doesn’t happen without someone overseeing it and driving it forward. Plans that are made but not carried out on purpose by the business are of no use whatsoever. Someone has to make the plan, understand it, and make it happen across all components of the model. Typically, the CEO establishes the strategy and the president/COO ensures that strategy is applied and executed throughout the 12 areas of internal management. For the small business, it is quite common for the owner to wear all these hats! You are the owner, the CEO, and the president/COO… as well as juggling all the implementation in all areas of internal management! Small business owners definitely have a lot to think about, which is why strategy is so very important.
Strategy is what makes it possible for each of the other 11 components to be managed for success and profitability. For example, you’ll need to coordinate finances to balance your business’s technology needs with your product delivery needs. And you’ll have to consider your people and staffing when you plan for your sales needs. Each area touches the others, and someone—most likely you!—need to keep them in mind to make the overall plan work.
In addition to executing that strategic plan, it is also vital to review the results and adjust as needed. Ideally, you would review your strategy each month to see what’s working—and what isn’t—and modify the plan to get closer to your overall goals. If you aren’t able to conduct a monthly review, I would urge a quarterly assessment at the very least.
Conducting these assessments will keep you on-track in your never-ending race for profit and stability in uncertain times. Knowing how far your business has moved down the course is essential for strategic decision making. If you need some help staying on-course, that’s what Officeheads is all about. We come alongside small businesses like yours and make sure your financial management strategy is in place and up-to-date so you are ready to take every curve toward success. Reach out today to see how teaming up with Officeheads will help your business find a winning strategy!