Business Management: Size-Related Issues in MSMEs

https://en.wikipedia.org/wiki/Operationalization

In the entrepreneurial dynamism pervading in the country, start-ups and growing enterprises operate side by side with those that have acquired a certain semblance of stability. Among all these, entrepreneurs, owner/managers as well as professional managers are confronted with the inevitable challenge to manage people. One of the most difficult problems facing companies involves attracting, using and retaining competent manpower. Studies have revealed that differences between small and large companies are manifest in the area of people management.

Hiring

Any firm appreciates the need for competent people in the organization. Traditionally, big businesses get the more competent people because of the offer of better compensation, employment stability and opportunity for growth. The smaller enterprises with weaker recruiting ability tend to make do with the leftover of employable people.

This situation has been slowly reversing, as large businesses could not sustain high wages and tenure of employment, much less growth space, as skills and capabilities are shifting toward knowledge qualifications rather than physical skills.

Hence, small companies do as well as large ones in practically all but the top jobs which favor big companies. This requires the entrepreneur to be a multitasking manager who must know all functional areas of management at the start-up stage. An assistant who may be recruited must likewise be a multitasker whose salary must be afforded by the smaller enterprise.

On the other hand, some high potential managers may opt to work with smaller enterprises where there are better opportunities for recognition. Also, the small firm offers greater challenges and a variety of experiences than the larger ones.

The challenge to the owner/manager is the demand on his time to find the right persons for the positions generated by a growing business. Mistakes are often committed due to time pressure, and such errors in finding the right person for a position may not be afforded by operating costs. Advertising is expensive and out-of-pocket costs in conducting employee search for qualified candidates are difficult to estimate, but must be weighed against getting the wrong person.

Smaller enterprises suffer more as owner/managers tend to underestimate and underutilize the available human resources.

One of the ways to improve personnel performance is by assigning tasks that will raise the contributions of all personnel to the limits of their potential through motivation and recognition. Although there are narrower ranges of competence from which to draw, the small firm will have to perform most, if not all, the functions in the large organization. This provides opportunities for people to develop and project their capabilities for other tasks.

As the enterprise grows, opportunities for promotion to more responsible positions may be considered. Careful assessment of potentials must be exercised to avoid operationalizing Peter’s principle in promoting anyone to a level of incompetence.

Retaining

Keeping the good staff is another hurdle to overcome. As they learn the ropes and tricks of the business, their value to the enterprise has appreciated and become attractive to other companies in need of able people.

The pressures of growth in terms of new issues and problems which constantly emerge call for people who can be alert and adaptable to constant change. Slowly, the staff in the business acquires greater value as multitaskers and must be matched by commensurate compensation and recognition. The owner! manager must be prepared to share certain authorities, if not business ownership, to keep the now above-average personnel, or risk their departure to a competitor or becoming a competitor themselves.

Personnel who cannot keep up with the business growth must also be recognized. Some supervisors work very well with two or three people but find difficulty in managing 15 or 20 persons. Constant monitoring and observation become imperative to anticipate stagnant managers who probably need reassignment or reinforcement.

Larger sized enterprises do not feel the need for retention as they may have more people than necessary. A few extra persons on partial work load or some actually performing redundant tasks manage to get away until the cost pinch comes around. Retrenchment and redundancy retirement are then resorted to, usually to the satisfaction of all concerned.

Goals Setting for Small Business: Managing Action Plan, Target Dates, Actual and Intended Performance

Goals Setting for Small Business

One way for small business owners or entrepreneurs to manage and improve chances for success is to set goals that will accomplish the business strategies through various business activities. For each goal, a plan of action should be indicated and target dates specified for each goal’s achievement. As each target date is due, actual performance can be compared with intended performance.

Criteria of Effective Goals

You can increase the chances of your goals being reached successfully if you can follow the following criteria:

Goals are Written

In business jargon, a goal that isn’t in writing isn’t a goal, as management experts will say. By writing down the things a business owner wants accomplished, goals are realized. Written rules not only clarify but enable to keep focus attainment of the business objectives.

Goals are Measurable

Goals are measured to ensure that business activities are aligned to business objectives. For example, as a form of measurement, after a year or two, the criteria for judging whether goals have been attained could be through sales volume, profits, losses, memberships in specific organizations, write-ups in newspapers and magazines, and so on.

Goals are Scheduled

Each goal set should have a specific time frame for its completion. If a date needs to be moved forward or pushed back, it can be done. Having a completion date to shoot for will make it much easier to schedule or re-schedule the work needed to accomplish goals and to monitor progress.

Goals are Realistic

If goals are set unrealistically, a business owner is setting himself or herself up to failure. Few people become instant millionaires or earn enough to retire within six months of starting their business. A profile of similar business owners in the field being pursued can be studied to find out how long it took them to do it, bearing in mind that circumstances vary from one owner to another.

Goals are Worthwhile

In order to motivate, to achieve, or to be worth working for, goals must be worthwhile. If goals require stretch or extra efforts, reward should be provided when achieved.

Participative Goals

This is important to ensure commitment. No business wants to fail. Although imposed goals may be accepted, they will not receive as much commitment as when those responsible for achieving them are participants in setting them.

Flexible Goals

This is in case of conditions that change dramatically beyond control in which predetermined goals become unattainable. When this happens, goals should be re-evaluated in fairness to those responsible for achieving them.

Finally, here’s a tip on priorities:

Priorities need to be set after goals are determined. It is possible to have clearly defined goals, but still not have meaningful priorities because goals haven’t been ranked in order of importance.

Free Software to Reduce IT Costs for your Small Business

Free Software to Reduce IT Costs for your Small Business

Anyone who has looked in to starting a small business knows it can be somewhat daunting when you start looking in to the potential costs of IT. It can be far too easy to listen to that salesman telling you that you need to invest large amounts of money to do the most simple of tasks.

If you are willing to spend a bit of time researching alternatives away from the companies that want to close a sale there really is a great deal of free software available to reduce your costs as a new or existing business.

Just because a task is being done in an office shouldn’t make the necessary software triple in price when compared to a home product. This is a list of three pieces of freely available software that are sure to optimise your office setup whilst reducing IT expenditure.

 Google Sync for Blackberry, iPhone and Outlook

Syncing your Outlook calendar and contacts wirelessly with your iPhone or Blackberry without subscribing to an expensive third party has always been a dream. This dream is now a reality with the efficiency of the Google Sync application.

Create a free G-mail account for each of your staff, and then download the free application to each computer. After this all you need to download is the necessary and freely available plug-in for your Blackberry or iPhone through the App Store on the device.

You can configure the sync relationship to sync your calendar and contacts from your Outlook to your handhelds and vice versa. To simplify, both devices will keep the latest information, and with sync intervals adjustable to a few minutes it is a clear cost reducer.

Skype Manager

Skype has recently started concentrating on corporate clients a great deal more and with this increased demand for business implementation they have released the Skype Manager. This is a great piece of software that incorporates a useful amount of business features. Conference calls, Video Conferencing, Office Instant Messenger, Voicemail, Call Divert and due to the fact that it uses VOIP (Voice over IP) technology through your company internet the savings on calls each month can be surprising.

You can even setup a standard office number for clients to call without them knowing you aren’t using a conventional telephone system. The Skype Manager allows centralised access to manage each of your employee’s calls and available credit. A large amount of small and large businesses are moving to Skype and other VOIP services to reduce costs. Why can’t you? All you need are some decent wireless headsets.

TAS Basics Free Accounting Software

Some of the accountancy software on the market comes at a high cost and in most cases a small business won’t necessarily have a need for all of the costly features that come with this cost. TAS Basics is a completely free piece of accountancy software that the developers claim they will never charge for.

All they ask is that if you ever need more features to consider them for the more extensive packages they sell. It comes with all the accounting essentials such as the ability to reconcile your accounts and keep track of invoices. It even holds a client database so you can stay up to date with money owed to you and money that your business owes.

This really is the tip of the iceberg when it comes to reducing your IT expenditure. Try to really spare some time to investigate upcoming costs. A good idea is to research other businesses on and offline to discover what solution they have in place. If you use this level of cautiousness with each aspect of your IT you will successfully reduce costs within your business indefinitely.

Marketing a Small Business for Little to No Cost

Marketing a Small Business for Little to No Cost

Many people associate marketing with television, radio and print ads, but marketing includes any tools or strategies used to spread awareness and good word-of-mouth about your business. Potential clients or customers typically need to see your business name several times before they will be willing to pick up the phone and dial your number. Good small business marketing does take time, so don’t expect instant results. Use marketing tools to plants seeds for future business opportunities. It can take three months or more to see results from most low-cost marketing strategies.

Business Marketing Points

Figure out what sets your business apart from the competition. Why would a prospective customer choose your business over other local businesses that provide similar services? Check out the competition. Make a list of all the things that make your business better. These will be your key marketing points.

Media Marketing: Submit Press Releases

Write press releases about anything your business does that is even remotely newsworthy. Submit your press releases to your local community newspaper and area newspapers with wider readership. When newspapers have a small amount of blank space to be filled, they often use press releases to fill that space. You will also be putting your name in front of local media representatives. If a reporter needs to interview someone in your business field, she is more likely to contact you if your name is familiar to her. Did your business donate to a local charity auction? Submit a press release. Do you offer a service no other local business offers? Submit a press release. Are you teaching classes or running a promotion? Submit a press release. If you have a website for your business, publish your press releases to a “news” or “press release” page.

Social Media Marketing

Set up pages on social networking sites solely for your business. Utilize Facebook and Myspace. Update your status at least daily, and list any special offers, sales or promotions. Ask current clients to “follow” or “friend” your business; that way, friends of your current clients will see your information as well. Remember to stay positive in your posts on social networking sites and avoid any political, religious or negative posts or comments. These pages represent your business, not your personal views.

Blog Marketing

Start blogging about your business and the services you provide. For example, if you run a massage therapy practice, write blogs about the different types of massages you provide, what first-time customers should know, and how massage therapy helps with different issues. Create two to three new blog posts each week. Share your blog posts on the social networking sites you created for your business. Use keyword research and search engine optimization to help web users find your blog. If you aren’t confident in your writing skills, find someone to ghostwrite your blog for pay or trade.

Marketing Communications: Newsletters for Clients

You can create an email newsletter that lists any specials, sales or promotions, links to your social networking pages, and information from your blog. Direct this newsletter to current clients and encourage forwarding to anyone who might find the information useful or interesting. If possible, include a special offer, discount or printable coupon that can only be received in the newsletter. Make sure you avoid spamming by always including a link to unsubscribe. Many online services, such as Constant Contact, offer tools to help design a newsletter as well as email database subscription services.

Marketing Communications: Newsletters for Referrers

It may be helpful to create an email newsletter for people who are likely to refer business to you. For example, if you run a massage therapy practice, you may get referrals from chiropractors; direct an email newsletter to local chiropractic care providers and let them know why they should refer their patients to you. Include information from your list of things that make your business better than the competition. If you offer any incentives for referrals, include that information as well.

Marketing with Online Classified Ads

Many people find service providers by searching craigslist.com or other online classified ads. Consider paying the fee to post ads in the appropriate section. Keep your ad short and to the point, but make sure to include information about specials, promotions and sales. Update your ads weekly.

Directory Listing Marketing

Find listings for your business on as many online directories as possible and check them for accuracy and completeness. Claim listings whenever possible. Find your business on online map services and claim those listings as well. Keep the information current.

Marketing with Referral Programs

Word of mouth may be the easiest, least expensive way to increase your client base. Create a referral program to reward current clients for referring new clients to your business. Include an incentive. For example, if you run a massage therapy practice, give the referring customer a discount on his next massage, or offer a free half-hour massage for every five paying referrals. Make sure all current clients are aware of your referral program. Always thank people for referring new customers to you.

Acquire Testimonials for Marketing

Ask current customers for testimonials about your business. Have a form for customers to fill out, and ask them to fill it out before they leave. Send emails to current customers asking for testimonials. Testimonials can be used on your website, blog, social networking sites and online ads. Make sure customers are aware that their testimonials may be published online.