- Every entrepreneur should understand the general principles of business management to maximize their chance of success.
You were probably really excited to start a new business. Unfortunately, you probably found that it was harder than you expected. Sadly, the U.S. Bureau of Labor Statistics shows that around 45% of businesses fail within the first five years.
The harsh reality is that there is no guarantee of success as an entrepreneur. Running a business is a very time and resource-intensive process. Unfortunately, many people spend a tremendous amount of time and money on poor business practices, which ends up costing them a lot in the long run.
If you want to run a successful business, then you really need to learn the basics of business management. This will help reduce the likelihood of business failure.
What is business management?
Business management is the art of organizing and managing a company’s or an organization’s activities. There are unique business management strategies for entrepreneurs. This is done by supervising operations and supporting workers to attain their greatest levels of productivity. A manager can assist a company in achieving its financial and operational goals by supervising and training new staff members.
Business management also includes investigating internal processes to increase productivity and controlling resources such as funds, supplies and goods. Controlling resources is how you boost success and profitability. Additionally, the monitoring of employees is a significant component of the duties of the company’s management specialists.
The role of a business manager in an organization is highly diverse, and it requires having a solid base and knowledge of various managerial duties, including overseeing staff, managing finances as well as mastering a variety of other soft skills.
Responsibilities of a business manager
Business managers frequently play a significant role in recruiting, firing and managing the workforce. The management of staff is the foremost duty of a business manager. They assess worker performance and put into practice evidence-based skills and techniques to boost the quality and pace of employee performance. A company manager could also be asked to handle or informally coach brand-new hires. They may also be required to help with event planning for a business. They are crucial to the smooth running of a firm, so they must be able to handle high levels of pressure and stress. Some of the primary responsibilities of a business manager include:
- Designing goals and targets that assist in individual and organizational development.
- Designing and executing strategies and plans that aid in achieving the company’s objectives.
- Ensuring that the organization has all the required assets to complete its activities without any hindrances, including manpower, tools and materials.
- Making sure that all the operations are organized and coordinated to guarantee optimal performance.
- Observation of the performances of the employees and offering feedback and advice to enhance effectiveness and productivity.
- Maintaining a good relationship with all the vendors, partners and providers.
- Collecting, analyzing and reporting on internal and external data.
- Assessing the overall performance of the organization and comparing it with previous records to highlight areas that require improvements.
- Representing the company by attending various meetings, events and seminars.
- Making sure that all the rules and regulations are understood and implemented.
Basic concepts and principles of business management
Below is a list of the top business management concepts, sub-concepts and principles that are necessary to run and manage a successful business. One is more likely to be successful as a business manager in any firm by comprehending and learning to use these fundamental universal business management ideas and concepts, as the benefits of these concepts have been studied thoroughly using scientific research methods.
1. The five functions in management: Business management includes the procedures that assist a firm in making the best use of its employees and resources in order to achieve its goals.Planning, organizing, staffing, leading and controlling are the five fundamental duties that constitute management at its most basic level. These five roles include a body of beliefs and practices regarding what it takes to be a great business manager. Managers may focus on tasks that provide outcomes by having a solid understanding of the functions. The five components of effective management are as follows:
- Planning: The first step is to plan. Planning is the process of identifying which goals and measures are suitable to follow, what tactics to implement, what steps to take and what resources are required to accomplish the objectives. However, it is more complex than it seems. One must be realistic in evaluating the company’s goals and lay out the tactics that will allow their accomplishment. Additionally, it is also necessary to make a backup plan if those tactics fail to achieve success. In fact, planning is one of the most essential business management strategies as it effect the remaining functions. Firstly, planning ensures all the organization’s targets and objectives are met. Secondly, planning helps prevent meaningless activities, random acts or rash conclusions. Thirdly, the resources available inside the organization may be utilized efficiently through planning. It encourages workers to come forward with problems they are having in meeting the objectives. Finally, it reduces uncertainty and offers a foundation for control.
- Organizing: The second step is organizing. Employee connections are built through a process that enables teamwork to pursue company goals. To manage a well-functioning unit out of all the resources, including staff, equipment and finances, business managers must adequately combine and synchronize all these elements. Organizing helps to specify who is going to accomplish what. It establishes clearly defined work positions and organizational levels and simplifies interdepartmental coordination. Good organization skills help liberate much-needed time to complete other vital tasks. Organizing is essential as it helps personnel to focus on objectives and acquire perspective on priorities. Organization in a business also allows financial management and alleviates unnecessary stress and errors by employees that result in an unorganized workplace.
- Leading: The most crucial task in the business management process is leading. One can only accomplish business objectives with a motivated team. Aligning staff responsibilities with the overall company goals is vital to effective leadership. Leading can be described as the process of inspiring, influencing and motivating others to achieve at their highest level. Making team members willing participants in the expansion and improvement of the business is what leadership is all about. Corporate leadership can strengthen and encourage cooperation, foster a sense of larger good, instill and promote trust, or offer direction and meaning. Transformational leadership is one of the most appreciated ways of leading an organization. Evidence indicates that organizations that are led according to the transformational approach have a clear goal. Employees in such workplaces are motivated, highly productive and loyal to their jobs. The employee satisfaction rate in such places is also very high. As a result, the employee turnover rate is very low.
- Staffing: The staffing process involves finding, hiring and retaining the most qualified and skilled personnel to achieve organizational goals. The goal of staffing is to have a positive influence on the effectiveness of the company. Staffing also ensures that the correct people are in the appropriate roles, carrying out the right actions. Staffing assists in the acquisition of the strongest human resources for a variety of positions inside the company. It revolves around human resource acquisition, education and promotion within organizations. This contributes to increased organizational productivity. Understaffing is highly disadvantageous for a business organization as it can result in an overly burdened, drained, unproductive and stressed-out workforce. As a result, the quality of work produced by employees is extremely poor, and the growth of the organization becomes stunted.
- Controlling: Controlling is the process of analyzing the progress towards the goals, the performance and the activities. Put procedures in place to aid in creating standards, allowing for comparison, measurement and decision-making. This is the active and ongoing observation of the company’s personnel, operational procedures and other resources. The manager monitors the organization’s resources effectively to ensure everything is operating as it should. Controlling allows the manager to accurately determine if the organization’s assets are being used to their fullest potential for intended business goals and to address errors, deviations and gaps wherever and whenever they occur.
2. Business managers in an organization – types and roles: Every company has a system that is crucial to moving the organization forward. There are line managers, middle managers and top executives in any organization, regardless of their level within that organization. Just above the top executive team are typically the CEO and a board of trustees. Individuals working in these positions each need to fulfill certain obligations and responsibilities. The specific duties that a business manager must carry out as part of their managing responsibilities are known as managerial roles. A degree in organizational management can help you develop these abilities. Every successful manager has a significant role to perform. All managers fulfill one of three primary roles: interpersonal, decisional or informational, and these are described below:
- Interpersonal role: Managers can serve as mediators, mentors and spokespersons in interpersonal situations.
- Decisional role: Managers might engage entrepreneurially in the process of decision-making by addressing disruptions, allocating funds or bargaining.
- Informational role: Managers in informational roles keep a close eye on different processes in an organization, serve as spokesmen or ambassadors, and share their expertise and experiences.
3. Management of organizational resources effectively: Resources must be allocated where they will have the most significant impact towards achieving the company’s strategic plan. This is one of the most crucial actions to take. By participating in operational and financial preparation procedures, business managers determine what must be done, in what order, and what kinds of funds and resources should be allotted to effectively carry out the plan. The business strategy and its unique objectives dictate what is significant and what might be less important.
4. Enhancing individual performance by knowing and using the four aspects of emotional intelligence (EQ): Effective business managers are aware of the circumstances and environment in which they operate. The four aspects of EQ are high levels of social awareness, self-awareness, self-management and effective interpersonal skills. Each of these skills is crucial and promotes solid interpersonal relationships. These dimensions result in a more robust and successful management performance. For a manager to succeed, emotional intelligence is an essential factor. The business manager’s responsibility is to find a strategy to transform a company member’s potential and expertise into better performance levels. This concept in no way implies manipulation. Instead, it focuses on helping staff to develop to their full potential.
5. Know the business: A frequent premise in management is that a competent leader can run any firm, although this is not entirely true. Although most managers are generalists instead of experts, many very great managers started off their careers as specialists. What most effective managers bring to their job in managing teams, divisions, subdivisions and organizations is both a deep grasp of the industry (they are extremely experienced) and a good awareness of the principles of excellent management. Aspiring managers should first gain knowledge related to the attributes of the industry via experience, working in the frontlines, and exploring how the different components of the organization collaborate to create a universal whole, because most successful managers investigate what is fundamental in the industry and build on it to improve the firm and improve results.
What particular skills are required to become a business manager?
Some of the primary talents and certifications you will need to become a successful company manager include a Bachelor’s degree in business management or a comparable discipline. However, many aspiring business managers choose to pursue a Master’s degree as it can provide numerous additional opportunities. Thankfully, obtaining an MBA degree today is not as challenging as it was a few years back due to the advancements and acceptance of distance education. Kettering University Online offers a comprehensive MBA program online that prepares students for the practical world.
Apart from a solid educational background, an aspiring business manager should also possess well-developed soft skills. The world’s most excellent business managers demonstrate some of the most fundamental abilities, such as communication, critical reasoning and problem-solving. Individuals who possess these qualities will be in high demand among business owners. The leading business managers have honed abilities in fields such as accounting, finance, marketing and informatics. To operate at maximum effectiveness, managers must be thoroughly aware of these domains.
A business manager must be a competent analyst to succeed as a company manager. One must anticipate the needs that a firm will confront in the future. They can collaborate and communicate effectively with others. Business managers need to be able to get along with many different types of people. For direction and inspiration, the team will rely on their leader. When the firm is under a lot of strain, managers should be capable of motivating staff to achieve desired goals. A business manager must also have solid accounting abilities if a company wants to undertake a monthly budget review of business activities.
Particular abilities are necessary to succeed in every managing position. The following are some examples of critical managerial competencies:
- Leadership abilities: A manager can motivate staff, provide clear direction to their team, and hold employees accountable.
- Problem-solving abilities: Managers should be able to develop innovative and practical solutions to complex and difficult challenges.
- Interpersonal skills: Essential management elements include creating goals, providing feedback and providing updates to shareholders and top senior executives.
- Organizational abilities: A strong manager should be able to oversee several tasks at once while ensuring that no aspects are overlooked.
- Technology skills: Digital literacy is already becoming extremely important at all levels of management. Managers must be familiar with the technical skills required for their role.
Types of business managers in an organization
It is important to note that business manager is an umbrella term as there are a variety of managerial roles that might be necessary to run an organization smoothly, these include:
- Office manager – They manage the activities of the entire company. Their main tasks include representing the company in meetings, budgeting, managing resources and all the company’s employees.
- General manager – They manage a specific department in an organization, its staff and its workflow. Their main goal is to enhance a company’s productivity and performance.
- Operations manager – Their duties primarily involve hiring skilled employees and managing their onboarding.
If your business fails, will working as working a business manager a rewarding career?
You may feel disheartened if your business doesn’t succeed. Fortunately, there are still other things that you can do as a business manager. You may try running a business for someone else.
Individuals working as a business manager in an organization may earn a considerable annual pay, and in some cases, they will also receive additional benefits. Apart from the organization that they join, the industry they work in and the geographic area they reside in, these professionals’ salaries may also be influenced by their degree of knowledge and experience.
The options for a profession in business management are plentiful. Highly qualified individuals with many years of business experience may anticipate competitive pay and long-term work stability. Gaining the relevant skills and becoming an expert in the field of business takes time. Many newly skilled individuals begin with low salaries before securing their ideal employment and earning their highest salary. However, the professional path is manageable for those with the resolve to take chances when they are presented. Working as a manager or supervisor is not restricted to a particular business or sector. Managers are necessary for all organizations. There are unlimited opportunities in the career of business management, especially for those with work experience.
Learn About Business Management to Grow Your Business Successfully
Hard work isn’t enough to succeed as a business owner. You also need to understand the principles of business management. You should learn how to manage a business properly if you want to succeed.