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What are the key responsibilities and priorities for a small business owner?

Updated: Mar 25, 2021



The short answer is that small business owners do whatever it takes to make their business a success. This could mean doing everything from emptying the bins, to picking up the mail, to making sales calls, to developing the go-to-market strategy.


Where a business owner spends their time depends on the type of business and how the business owner chooses to spend their time.


However, generally, every small business owner has 6 key areas of responsibility:


1. Financial Management

2. People Management

3. Marketing and Sales Management

4. Operations Management

5. Planning and Strategy

6. Self Management


If this sounds really broad, it is.


That is why you hear about small business owners wearing multiple hats. Business owners do whatever it takes - no task is too small or too big when it is your business. And they do it happily.


And this is why the role of a small business is so tough.


A summary of the key responsibilities:


1. Financial Management


Poor financial management and the lack of planning, anticipation or foresight are the main reasons for business failure.


Small business owners are responsible for the financial performance of their business. It is up to the business owner to establish a viable business model for how their business will earn money. The business owner is responsible for establishing budgets and sales forecasts — and making sure their business meets them.


The business owner needs to understand key financial metrics like Sales, Cost of Goods Sold (COGS), Profit Margins, and Cash flow as these are key to making the right daily decisions for a sustainable business.


The business owner may actually invoice customers, collect overdue accounts, keep the accounting system up to date and reconcile bank statements.


The business owner makes sure all expenses are kept in line and can be met.


Put simply, the business owner’s responsibility is to make sure the money is there to pay everyone in a timely manner — staff, suppliers, service providers, tax authorities, creditors and the business owner themselves.


If the coffers get low, to meet these commitments, the business owner may need to arrange for a line of credit or loan to bridge temporary cash flow issues.


HINT:

Be accountable for your financial performance. Every business owner should spend time each month reviewing the financial performance of the business for the previous month, and forecast the performance for the forthcoming month.


2. People Management


A small business owner is responsible for putting a top notch team in place to operate their business. This includes recruiting and hiring new staff. It also means training and developing existing staff.


Small business owners write job descriptions, provide feedback and performance reviews, and reward employees with pay, benefits and recognition.


As a business grows the pressure is on. The business owner’s role changes. Most business owners start out doing everything. To enable a business to grow, business owners need to hire and develop staff to support delegation of tasks they previously performed.


HINT:

Start with delegating some of the financial responsibilities or outsourcing to others – book keeping, payroll, accounts payable.


3. Marketing and Sales Management


Small business owners are responsible for sales revenue and the marketing to drive sales of their products or services.


Many business owners, especially in the early years, also go on sales calls and help close sales. Business owners may get involved in marketing, including establishing campaigns, placing ads, doing email marketing and social media marketing.


HINT:

If you are not an expert on how to reach your potential customers, ask for help.


4. Operations Management


Small business owners are responsible for ensuring their customers get what they want. They need to ensure the product or services they provide are delivered at the required quality, price, packaging, display, design, distribution, production and service.


It is also important to look up from ‘doing’ to see the bigger picture. That is why smart business owners work on the efficiency and effectiveness of daily operations.


Every business has inefficiencies and waste. Every company has processes that could be tighter. Part of the business owner’s role is to identify where that occurs and find solutions. This includes automating tedious manual procedures, or adopting new technology to drive cost out of your bottom line. It may mean outsourcing non-core functions.


HINT:

Small business owners should network with peers by attending industry events a few times a year. This is how to discover best-in-class technologies and new operational methods. Continuous learning is key to running a business.


A critical area of Operations is ensuring that there are appropriate Systems and Procedures for every part of the business. The business owner needs to constantly review their Systems and Procedures, as they are key for growing, scaling and expanding a small business.


5. Planning and Strategy


Small business owners are responsible for setting strategy and having a business plan. The business owner establishes the vision and mission for their businesses.


HINT:

Every business owner should ask and answer the question ‘what do we want to be known for?’ If you can’t do that, your business will be rudderless and could lack distinction.


The business owner is also responsible for the communication of the vision and mission so that their staff, customers and the world understand.


As part of planning and strategy, business owners need to keep tabs on marketplace trends, competitors and changing customer needs. The market and customer needs are always changing — they don’t stay static. From time to time, business owners have to update their products and services, adjust pricing or adapt their marketing strategy to meet expectations.


6. Self Management


Your small business can only grow to the extent that you, the owner, grow. It is not what your business can do for you, but what you can do for your business. The more valuable you become to your business the more valuable the business will become to you. Developing the right skills, habits, and focus is not just important it is vital for survival in today’s business world

HINT:

Ask yourself what areas you could improve or require assistance with. Identify ways to address your less strong areas – for instance training, using a coach / mentor, delegating to one of your staff.



What are the most important responsibilities?


Some responsibilities have a greater impact on your business depending on where the business is in its growth cycle.


For instance, for a new start up business, Financial Management, Sales and Marketing Management and Operations are important.


As the business grows and becomes bigger the other factors like developing the Self Management, People Management and Operations Management responsibilities are important.


Sales and Marketing Management and Financial Management are the small business owner’s biggest tasks and responsibilities. But the one key responsibility of a business owner which influences success and failure is Financial Management.


Rod is a business advisor providing smaller businesses with the necessary skills and processes to deliver their business improvement and turnaround initiatives in the role of advisor and delivery manager. In particular, based on 30 years advising and delivering large and small enterprises on technology projects, Rod has provided guidance and support to businesses on how to use technology to grow or to support the scaling of businesses. For more information refer to www.transcendhcs.com.au.

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