8 essential small business management skills
Running your own small business can often feel like an endless list of tasks and to-dos. And if you’re a sole trader, all the work and responsibility rests on your shoulders. But while many business owners are Jack or Jill of all trades out of necessity, there are a few management skills they all need in order to run a business successfully.
Here’s what you need to run your own business
We’ve honed a list of the eight essential skills you need to keep your business ticking along like a well-oiled machine.
- Financial management.
- Sales and marketing.
- Time management.
- Project management.
- Problem solving.
- Relationship building.
Chances are you’re good at one or two (or three) of these already. This list will help you hone in on the ones you haven’t mastered yet.
1. Financial management
One of the most important requirements of running a business is having an excellent understanding of its financial health. From setting up an accounting system and managing cash flow to maintaining proper records and meeting your tax obligations, being comfortable with the numbers is vital.
If you have employees, you’ll also need to manage payroll and superannuation.
Sound difficult? The good news is that it doesn’t have to be. Financial management software such as Xero or QuickBooks can help you manage:
- Bank reconciliation
You can also find financial management training and support through the Australian government business portal.
2. Sales and marketing
Every small business owner must know how to promote their products or services. Developing strong sales and marketing skills is a matter of building rapport with your customers by listening to them and understanding what they need (and then delivering it).
Your customers are the beating heart of your business. The happier they are, the more likely they will be to refer others and leave you glowing reviews.
At the same time, you’ll need a marketing strategy to bring in a steady stream of new customers. You don’t need a degree to be a marketer anymore — there are plenty of short courses where you can learn these skills.
3. Time management
Chances are, you already have an entrepreneurial streak and the qualities of a self-starter. But are you making the best use of your time? We all have the same 24 hours in our day — but for some, staying on task can be a real challenge.
Time management is all about:
- Making a plan
- Prioritising tasks
- Tracking your time
- Doing what needs to be done
Apps such as Toggl and Be Focused can help you track your time across various projects. If you’re game, try RescueTime, which tracks the time spent on apps and websites and delivers weekly reports to highlight where you’re spending (or wasting) your working hours.
4. Project management
Effective project management keeps work on track (and money coming in) by mapping out the required tasks and assigning deadlines to each.
Like managing your time, this is one of the essential ‘greatest hits’ of business skills. Taking the time to plan and track your project tasks will help you get work done and move you towards larger goals. Without a proper plan in place, projects can easily get derailed wasting time and money.
Project management tools like Trello, Basecamp and Asana can help you get more done.
Whether you’re managing a process such as product development and testing or running a marketing campaign, these tools help you stay on schedule and deliver day after day.
Strong leadership is about leading by example — taking ownership for your actions. It’s also about:
- Communicating and sharing knowledge
- Entrusting others with responsibility
- Encouraging and rewarding initiative
If you’re a small business with employees, knowing how to exercise leadership to bring out the best in your staff is fundamental.
Even if you’ve been in business for a while, getting some training in basic leadership skills can be beneficial. There are many accredited Australian courses that can help you develop leadership skills. Here are just two:
Leading a team can be challenging. But by creating a happy, productive workplace, you’ll enjoy a lower staff turnover and higher morale.
6. Problem solving
From the customer issues to the inevitable headaches that arise behind the scenes, the ability to troubleshoot is a key management skill.
Effective problem solving is the ability to:
- Make decisions under pressure
- Handle unexpected situations
- Solve complex challenges
It can be broken down into four deceptively simple steps based on the famous framework by mathematician George Polya:
- Identify the problem
- Devise a plan
- Implement the plan
- Assess the outcome
There is often more than one way to solve a problem, so it’s important to consider all possibilities, and give the mind time to work through the options.
While it’s fine to wear multiple hats in the startup phase of your business, eventually you will need help. Knowing when and how to hand tasks off is another essential management skill.
Many business owners try to keep doing all-the-things, especially if they started out on their own.
And while knowing how to perform the different roles in your business is important, so is recognising when it’s time to make your first hire.
It might be as simple as:
- Paying a freelance bookkeeper to handle your quarterly BAS (Business Activity Statement) payments
- Assigning weekly administrative tasks to a virtual assistant
- Hiring your first permanent staff member
However you choose to do it, handing tasks off is an investment in your business that frees you up to focus on more important work.
8. Relationship building
And finally, a successful business is about more than just a product or service. It’s about relationships — specifically the quality of the relationships you have with your:
- Employees and business partners (if you have them)
Building relationships is especially important for service-based businesses. Customers who come back again and again, and who spread the good word, are your business.
Consider joining a business association or connecting with others in your industry on LinkedIn. Be active in online communities where your ideal customers hang out, offering advice when appropriate.
Trust is built over time, so start growing your network now. That way, it’ll be there when you need it.
Update your management skills
Whether you’re a team of one or 21, these business management skills will help you work smarter. From good financial systems and effective time management strategies to relationship-building and leadership skills, work through this list as you have time. Once learned, these skills will keep your business running smoothly for years to come.