In this article we will talk about:
- What do I mean by small business?
- Understanding what needs to be more organized
- The two most important areas of your small business
- How to run a small business in practice
- How to do it all in a smart way
Every time throughout this article I write something about running a small business I will be referring to small businesses, micro enterprises, micro entrepreneurs (MEI) and even for small businesses. These are different nomenclatures that speak of companies at different levels of billing, but often have similarities to the lack of professionalization of the management of the business as a whole.
Before you think this is not your case, give me a second, because when I talk about running a small business well, I want to show you how to find out which areas need more attention in your business, what indicators really are important, such as putting your plans into practice and I will still point out tools to facilitate your work.
Like everything in life, you need to take an initial step in running your business, but if you do not know exactly which area or areas need the most attention, you can take the wrong step. So, my first recommendation, before any other activity, is that you make a diagnosis of your business.
How to run a small business with a diagnosis
In our business diagnostic worksheet, you will get an overview of the 5 main areas of any company: strategy, finance, marketing, operations and people management:
Just answer a few questions for each of the areas that will automatically have you maturity level response for your business and a score (ranging from 0 to 100%) for each of the areas of your business:
Do you already know or are you ready to see this result? I've seen cases where the key strategies of the small business were focused exclusively on areas that were well, while some sectors that needed attention were abandoned.
In addition to the diagnosis (which analyzes almost exclusively features of your company), it is also worthwhile to do a SWOT analysis to observe the environment in which your business is inserted.
Managing a Small Business with a SWOT Analysis
Basically the SWOT is for you to assess your strengths, weaknesses, opportunities, and threats. In our spreadsheet you can generate scores for each of these items and see a ranking of which are most influential to your small business:
From these data, cross the SWOT items that most affect each of the areas outlined by the diagnosis, so you get more data and information to make the decision of where and how to start acting
Regardless of the outcome of the diagnosis and SWOT, we know that there are two areas that can never be neglected in any business: the financial and sales areas, since they are intrinsically linked to the outcome of the company as a whole.
Professionalizing your financial area
When we talk about how to run a small business, the most important thing is to have good control of your cash flow. It is with him that you will have a vision of revenues, expenses, profit or loss, profitability, accounts payable and receivable. Basically this data already solves 80% of all your financial doubts. In our spreadsheet cash flow, this is the view of the cash flow statement:
Obviously, depending on the size of your business, it may be important to have bank analyzes, payment methods, financial projections, specific customers, suppliers, cost centers or even everything together in one spreadsheet financial control. In these cases, it is worth finding the tool that suits you best.
Some ideas that can help you organize your finances:
- Set aside one or two days to make payments (improves spending scheduling)
- Balance payments between 5 and 20 days so you do not unbalance the cash
- Use automatic debit and scheduled maturities (to reduce mandatory tasks)
- For recurring payments made with DOC or TED use future scheduling with repayment
- Automate the issuance of invoices
- Avoid more than two bank accounts
- Use a cash flow worksheet
Professionalizing Your Sales Area
Just like finances, the sales area will be crucial to the success of your company. After all, it is through sales that revenue goes into the box. Therefore, having a sales control worksheet can be the difference between business success or not.
In this sense, control the amount of sales, the average sales ticket, the targets set and if there are large variations from one month to the next. Whenever a drastic change occurs (up or down), it is worth investigating the causes.
In the example above, we have many months in the red (result of quantity of sales below the target), but with positive revenues, which would indicate a need for analysis in which products are contributing more to this result.
Some ideas that may help:
- Have a sales or revenue goal for sellers
- Assign bonuses to sellers who beat their goals
- Create a well-organized sales process (in steps)
- Track indicators of your sales funnel
- Work on your credibility and ways to strengthen your brand
- Think about how to increase the chance of selling (free sample, live demo, images, etc.)
- Use a sales control worksheet
Obviously so far we have looked at ways to organize your strategies, but in every company it is necessary to put this planning and new ideas into practice. For this it is important to unfold your plans in activities and usually indicate the 5w2h Action Plan Worksheet for this:
It has this name by working with simple and practical answers to each action plan from the initials that form the name of the method 5w2h:
- What - What?
- Why - why
- Who - who
- When - When
- Where - where
- Hou - like
- A lot
That way, it's easy to keep track of the action plans you've laid out and have the real certainty that everything was done as planned and that the management of your small business is on track.
Throughout the article I have indicated the tools that I consider to be ideal for each of these steps, but if you want all of them, I highly recommend our small spreadsheet package, which already includes all the spreadsheets I mentioned here: