As the owner of a successful business, you recognize that you must embrace change. With growth, pressures increase to rapidly produce and deliver products and services to the market. You may need a larger facility to increase your production capacity, or you may outgrow your retail location because you must expand inventory. You may have to increase your sales force to reach and serve new markets, or you may find your customers and clients prefer to do business by the Internet.
These issues require that you look at your business support systems. A management audit will help you pin-point your strongest systems and your weakest links. You may have to evaluate many aspects of your business: customer service, cash-flow, internal and external communications, buying decisions, product pricing, existing vendors, potential customers and the integration of technology and computers.
If you are to meet the ever-changing needs of the market and remain profitable, you must be able to manage your systems and develop your resources. Contact your local SBDC for assistance on conducting a management audit.
Before beginning construction or operation, check to be sure you are in compliance with any environmental regulations affecting your business. Additionally, many banks will not lend money until environmental obligations are addressed. Whether it is air-quality, hazardous waste, storm water or water usage, even pollution prevention, the successful business owner is aware, responsible and accountable for the impact of their business on the environment.
When business owners hear the term risk management, many think of key personnel insurance, business continuation insurance and unemployment insurance. Risk management also encompasses safeguards against shoplifting, employee dishonesty, passing bad-checks, burglary and robbery. Most businesses rely on computers to meet their management-information needs.
Emergency planning, response, and recovery are forms of risk management that begin with a business-impact analysis and culminate with a recovery plan. The successful business owner recognizes the need for identifying causes of business disruption, and makes plans to minimize the impact of potential disasters. Your local SBDC can discuss risk management issues with you.
Human Resource Issues
Entrepreneurs and new business owners are often required to handle multiple responsibilities, so they recognize their need for a team of professionals to handle human resources issues, which they can either hire or contract.
You must evaluate your human resource needs before you can find, recruit and hire personnel for your growing business. You must perform job analyses, search for benchmark salaries, develop policy manuals and handbooks and evaluate and develop employee benefit plans. Your ability to hire the professional who best fits your needs depends on your ability to share your business vision, values and mission with those most qualified to fill the position.
The successful business owner expects exemplary if not extraordinary employee performance that demands full engagement. One author describes full engagement as being physically energized, emotionally connected, mentally focused and spiritually aligned with the organizational mission. The successful business owner knows how to manage this energy for optimal performance.
But the process has just begun. Qualified employees are not only difficult to find but they are also hard to retain in tight labor markets. Competitive salaries and benefit packages are often augmented with performance bonuses and company stock options. Providing continual professional development, opportunities for leadership and knowing your employee’s performance motivators all indicate the value you place on the individual as an employee.
You may not, however, be in the position to hire, so you may have to consider contract labor instead. The IRS provides an extensive list of standards to help you assess whether the person you hire is technically a contract laborer or an employee. As the business owner you will contract for the delivery of goods and services to the specifications you require, and you will evaluate the contractor’s ability to perform.