Small Business Owners are no different than any other Business owner or Leader, they have to manage their business. This doesn’t have to be a complex endeavor and can if the proper tools are used, be a relatively simple process.
Most business owners will use some type of tool to help them manage their business. These tools, often meant for large businesses can be complex and challenging to use, even for experts in a particular area such as Inventory or Accounting. However, the process doesn’t have to be hard.
Managing a business is unique to each business, however, some processes are the same no matter what the size or type of business. Depending on the type of business this can involve a few steps or many steps.
What are these processes that are involved in all businesses?
- Sales (Revenue) – this is nothing more than the money you receive for selling your products or services
- Cost of Goods Sold – simply what it costs you to provide and sell your products or business. This is not the expenses you have that must be paid regardless of a sale. They are only those directly involved in the sale.
- Business expenses not involved in Cost of Goods sold – Things like rent, advertising, marketing, insurance and so on. These are things you must spend money on if you have a business and do not directly involve sales of your product or service.
- Inventory– You always have some inventory. The paper you use, the ink in your printer, envelopes and so on. Sometimes it is unfinished or semi-finished materials such as lumber, paint, fuel, etc.
- Customer Management – It is important to know who your customers are, how often they buy from you and how much they spend. Knowing where they come from is also important to other efforts of your business.
- Sales Management – Whether you are tracking those sales that are actually happening or those who might buy from you in the future, tracking your actual and potential sales is important to running your business.
- Cash Flow – How money moves through your business, from when you receive it to what you do with it, knowing your cash flow is critical to the survival of your business. The phrase, “Cash is King” is important for a reason. Without cash, your business won’t survive.
To many Small Business Owners, this can seem like a daunting task. Having to track all of that information can take a considerable amount of time and if the Business Owner is not proficient at doing them, they struggle and sometimes don’t even bother doing it. That could be a fatal mistake for your business. Some purchase tools that are designed to manage each of the above areas individually. Some of those tools will manage several of the areas. Regardless, most of these tools are over time expensive and first-year purchases of them can easily exceed $3000.00 or more, depending on what the Business Owner purchases. Subscription costs afterward can easily exceed $2,000.00 annually. None of that includes training on how to use these tools or use the information the tool provides. Further, while these tools claim to work for small businesses of as few as 1 employee, they are in fact tools that are designed for larger businesses with internal experts that can use them effectively. Even then, many of the features of these tools go unused.
To my knowledge, there is only one tool that is specifically designed to manage all of these, is simple to use and comes with the training necessary to use them. We have found that the MyDMAIC tool has all of these features and can significantly help a small business owner manage their business. You can learn more about this tool here: www.mydmaic.com.
Many small business owners use their own spread sheets, notebooks or a stack of paper to manage their business. This is a natural outcome of their only seeing complex tools that they have difficulty using. Their own tools, varying in effectiveness, can help and of course, is better than not using factual information at all. If for no other reason than taxes, some formal tracking of the performance of your business is important.
Using the data is also important. It is one thing to collect a bunch of information. It is quite another to be able to use the information to make fact based decisions regarding your business. All too often we make decisions based on what we have read elsewhere or by gut instinct. This usually results in efforts that have little effect and are costly. What ever type of tool you decide to use should, in fact, be usable and understanding to the small business owner. Making business decisions on facts instead of by gut is crucial to the survival of your business.