This may seem like a dumb question but I will go on record here and say that 90% of the people that I come into contact with on a daily basis never really understand what business management really is. The typical entrepreneur has this idea that management is making it happen. How he makes it happen has more to do with his personality and willingness to work until the job is done than management skill. I will repeat that. The typical business owner makes his business successful due to his commitment to work until he completes his task, no matter what. That attitude has nothing to do with good business management.
I sent an email to a local businessman and asked him this question, What is Business Management? I asked him this question because of his ability to write interesting and informative articles. His response was:
People often think business management is running a business by intuition. They think it's their ability to know what's right for their company by their gut. It's a superstition methodology, which is to say it's no method at all! Business management is tracking, learning, and knowing what is and is not working in a business based on scientific measurements.
Though there are vertical markets, and unique aspects of every business, basic business management breaks down to two things: tracking processes and tracking money. Myth number two about business management is that there are lofty goals in running a uccessful business that can be nuanced and complex. Wrong. A business is a body of people, assets, and market position that allow the owners to reap a profit for their investment.
Tracking money is often correctly identified as accounting. The mistake common to small and moderately successful business owners is that they assume their business has accounting needs different than the millions of businesses that have come before and will come after, and that accounting stops with money. Accounting, or business metrics, is a tool for steering a company through the rough waters of the market and responding to changing economic winds.
A business manager can track anything: assets, market share, market reactions, sales, costs, labor, and productivity. If he can't quantify productivity, for example: what an employee is worth to his company, per hour, or per day, he doesn't have any hope of managing anything. He's sailing blind. Likewise, each and every aspect of a business that is not measured and weighed is nothing more than a series of coin tosses. In the end, no amount of skill or good fortune can outperform disciplined management by the numbers.
Jason A. Nunnelley
Well said! The key to effectively managing your business is to uncover the profit drivers of your business and then focusing on maximizing those drivers. We can help you do this and set up systems that will help you "focus on the majors". This type of consulting is business consulting and is one of the more enjoyable things that we do for clients. If you would like to discuss a Business Consulting engagement then click here to contact us.
