Small Business Management

In order to get a proper understanding of small business management let us look at the concept of management. According to Wikipedia the word management is taken from an old French word “management” which means “the art of conducting, directing”, from Latin manu agere “to lead by the hand”) characterises the process of leading and directing all or part of an organization, often a business, through the deployment and manipulation of resources. sees management as the organizational process that includes strategic planning, setting; objectives, managing resources, deploying the human and financial assets needed to achieve objectives, and measuring results. Management also includes recording and storing facts and information for later use or for others within the organization. Management functions are not limited to managers and supervisors.

From the two definitions above we can see that the word management means the act of conducting and directing all the parts of an organization. This process includes strategic planning, objectives setting, resources allocation and management and result measurement.

Function of management

Let us look at the function of small business management. The following are the basic function of management that will enable an organisation or a small business achieve its goals;


Planning is the basic function of small business management; it is the foundation stage that all other aspect of the business depends on. Once the business fails in its planning stage it will find it difficult to succeed in any other aspect. When carrying out the planning process care should be taken not to deviate from the business set objectives and goals.

The planning process is a continuous course of action. A business may come up with a different strategy due to its analysis or cycle and will decide to make a new plan. Depending on its PEST analysis a business may have to alter its course of action in order to accomplishing certain goals. This kind of preparation, arrangement is known as strategic planning. In strategic planning, management analyzes external and internal factors (SWORT Analysis) that may affect the company from achieving its objectives and goals. And carry out a strategic planning process for the business.


The second function of the management is getting prepared, getting organized. Management must organize all its resources well before in hand to put into practice the course of action to decide that has been planned in the base function. Through this process, management will now determine the inside directorial configuration; establish and maintain relationships, and also assign required resources.

While determining the inside directorial configuration, management ought to look at the different divisions or departments. They also see to the harmonization of staff, and try to find out the best way to handle the important tasks and expenditure of information within the company. Management determines the division of work according to its need. It also has to decide for suitable departments to hand over authority and responsibilities.


Directing is the third function of the small business management. In directing business management supervise and control the action of staff. This can be done through the bottom top model or the top bottom model.

This helps them to assist the staff in achieving the company’s goals and also accomplishing their personal or career goals which can be powered by motivation, communication, department dynamics, and department leadership.

Employees that are motivated and involved in the change process can easily adjust to change and its easy to direct such employee. When carrying out the direction process communication and feedback is very important and everyone involved in process must be aware of the objectives they are to achieve. The objective must be achievable and it should be a SMART objective. It is very important to maintain a productive working environment, building positive interpersonal relationships, and problem solving. And this can be done only with Effective communication. Understanding the communication process and working on area that need improvement, help managers to become more effective communicators.


Control, includes establishing performance standards and quality control which are of course based on the business’s objectives. It also involves variance analysis i.e. the difference between budgeted and actual result and reporting of actual job performance. These analyses can be used by management to make proper forecast and budget for the future.

In an effort of solving performance problems, management should higher standards. Business managers should not compromise on company standards and quality of products or job performance. Management should know when to be flexible with its standard if need be but flexibility of stands should be in line with company or business objectives.

Effective and efficientsmall business management leads to success, the success where it attains the objectives and goals of the organizations. Of course for achieving the ultimate goal and aim management need to work creatively in problem solving in all the four functions. Small business management is all about following the planning, organizing, directing and control stages to achieve business objectives.

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