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Small Business Organization

Starting a small business is just the beginning of a complicated yet rewarding way of life for entrepreneurs. Evolving from having an idea to taking all the necessary legal steps to creating a small business is just the beginning. Once your business has been created, it’s time to focus on growing it.

The action of growing a small business includes many different subjects. Marketing, creating an online presence, getting financial accounts squared away, and building a loyal customer base is just the beginning. The challenge of building a small business into a successful endeavor is only exacerbated by a lack of one very important aspect: organization.

What Does Organization Mean to a Small Business?

While there are many aspects of business organization, there are three crucial elements of small business organization:

Time Management

Includes managing employee schedules, scheduling meetings, creating business hours, learning to use your time wisely, outsourcing or delegating work, keeping track of upcoming holidays or surges in business, and shortcuts to increase productivity.

Financial Management

Includes management of payroll, management of financial accounts, tracking petty cash, preparing for upcoming expenditures, taxation, tracking cash flow projections, preparing loan applications, and determining correlations between income and marketing expenses.

Customer Management

Includes automating sale prices, collecting and storing customer information, the use of rewards or membership programs, tracking customer purchase metrics and sending invoices.

What all three of these elements have in common is a software counterpart that can further organize your business and make your job as an owner easier.

Small Business Time Management

Where new small or micro-businesses fail with time management is assuming that since they are a small business with few (or even no) employees, there isn’t much to track. There are two flaws with this.

Firstly, if you consider just how much work is takes to run a business and how many different areas you devote your time to, you’ll soon realize that a small business owner has much more to think about and manage than a large company owner with many employees. The reason for this is that large companies can afford to have specific branches of employees dedicated to specific jobs. Oftentimes small business owners wear many hats. They juggle being an accountant, customer service rep, marketer and merchandise manager every single day.

When you spend so much time doing everything you not only lose sight of your goals but you are going to wear yourself out. Owning a small business doesn’t mean you have to do everything by yourself. It means you have to be even more aware of what you can handle, how to manage time to get those things done and when to delegate out other tasks.

Secondly, with no time management you are unknowingly limiting how large your business can grow. Even if you don’t wish to own a large business for whatever reason, this growth can also be measured in success based on what clients or customer you work with and your income. Without some type of time management in place, you are eventually going to get stuck with how many customers you can service, how many employees you can hire, how successful your marketing is and all in all, the longevity of your business.

Simply put, a lack of time management simultaneously limits your businesses success while burning you out. The best solution is to ditch the pen and paper, and instead, invest in a software program.

Time Management Software

While technology and capabilities of software vary, generally a good time management software for small businesses will include the following features:

Ability to administrate projects

Goal-setting capabilities with tracking

Time tracking (i.e. employee timesheets)

Yearly calendar options as well as daily, weekly, monthly and quarterly tasks

Time management software comes in a web-based form or a desktop/standalone form. Whatever you decide to use, just be sure to back up all of your information to a cloud and to an external hard drive.

There are many different brands of paid-for time management and time tracking software available, some of which are purposely created for small businesses. There are also free management and tracking programs and even apps for smartphones.

 

Organizing Your Financial Accounts

Finances are one aspect of business that makes some small business owners cringe. It goes without saying that organizing your financial accounts is vital. Not only can you lose money and eventually go bankrupt with badly kept financial accounts, but you can also face an audit or other severe repercussions when it comes to taxes.

Look to work with a professional and delegate the accounting and book keeping to them.  If this is not in your budget, the next best thing is working with a part time bookkeeper who can supervise and give you advice.  A lot of micro-business owners make the mistake of thinking they are saving money by doing all their own accounting but working with a professional can often times save you money in the end.

Starting Off Your Accounts Right

Here are a few tips to getting your financial accounts organized.

Separate Your Personal and Financial Accounts: This is probably one of the most common errors small business owners commit, particularly those who run a solo business or service, or are a family run business. Before your small business is even up and running, create a separate business account or even just a separate checking account. Never use your business account for personal expenses. You need to properly deduct the amount from your business account and add it to your personal account just as any large business would.

Keep Track of Your Expenses and Income Right Off the Bat: Another common error that often occurs when an entrepreneur is simply testing the waters of a small business is that they don’t keep receipts.  Even if you are testing out a business idea, keep your income and expenses organized. If the business is successful and you choose to pursue it, you will need this information for tax purposes.

Invest in a Financial Software Program: Again, software plays a huge role in organization. Even more important than time management software would be financial accounting software of some type. It is incredibly easy to lose track of expenses so start using a program right away. There are many different types of financial accounting software on the market, some of which are free with limited settings that would still be ideal for a small business.

Create a Financial Hard Copy Filing System: Even if you use a financial software program, you’re still going to need a physical filing system to keep track of printed invoices, receipts, permits, patents, contracts, etc. Traditional filing cabinets still work beautifully, you just need to create a filing system that you will use. Create an easily identifiable system and also have an “Archives” drawer for things that aren’t going to be immediately pertinent but still shouldn’t be thrown away.

The secret to organizing your financial accounts is consistent maintenance throughout the year. Waiting until March to review the previous year’s finances is a big mistake. Try to spend about an hour each week reviewing your accounts and maintaining up to date records. This will make the paperwork burden much easier come tax season and you may even find some ways you can save yourself some money along the way.

Organizing Customer Information

Last but certainly not least is customer management. More specifically, the organization of customer information. Such customer information can include anything from the collection of a first name and email address from a visitor on your website to full contact information, address, birthdate, etc. from a customer on your membership program.

To begin with, most small businesses will only keep track of this information through two means — email and financial management programs that include sales and invoices. There are a few different flaws with this system. The first flaw has to do with relying on emails to track customer information.

Email, whether you’re using a Gmail account or a business email account linked to your website, can very easily fail and lose information. Even if you backup all emails to a Cloud or your hard drive, it is still an inefficient way to keep track of your customer’s contact information. Additionally, there is no way to track your customer’s purchases unless you go through each email. Micro-businesses or service-based business might just use an Excel-style spreadsheet which makes viewing multiple customers easy. However, there is still an issue of limitation on how much information you can include.

Relying solely on financial management software will limit your customer information collection and analysis.  However, this may be acceptable for you if you have a very small client base or work primarily as a contractor. 

If you are in retail, work closely with clients on many projects or have plans to really expand your business, you should consider using specific customer management software. This software is aptly referred to as Customer Relationship Management or CRMs.

When to Use CRM Software

If you:

Have so many customers/clients you forget to interact with each of them,

Use different types of marketing but don’t track the traffic from each of them,

Have multiple types of income streams,

Work with many clients/customers all over the world or in various industries,

Don’t have a go-to database for all customers/clients, contacts, leads, and partners,

Feel like you miss out on opportunities for sales,

then you will likely be extremely happy upgrading your current customer information management to actual CRM software. The world of CRM software is evolving to make way for the increase in small businesses that are interested in CRM but don’t have the money to pay for services that aren’t applicable to them. There are many reasonably priced software programs on the market, some even free for basic features, that are ideal for small businesses.

CRM software is powerful. While many small business owners might be put off from how complicated the software might seem, don’t fret. The advantages of using CRM outweigh the disadvantages. You won’t lose the feel of a small business either. In fact, you can even increase your appeal as a small, welcoming business by using a CRM since you’ll be able to track customer information more easily and anticipate products or services they might be interested in. As an example, a customer is more likely to be loyal towards a brand that remembers his/her birthday and sends a coupon code to use.

Small business doesn’t have to mean you have to go without the latest in technology. More and more companies are creating small business-specific software in the form of desktop programs to mobile phone apps that all help streamline processes for business owners.

The topic of small business organization is so vast it’s nearly impossible to touch on everything in one sitting. There are hundreds of sources on the subject of organization that all have different yet effective techniques. The best way to determine what works best for you is to simply experiment.