The key elements of starting and managing a small business

Running your own business isn’t easy – far from it. Small business owners require an advanced, and extremely varied, skill set, including knowing how, when, and who, to outsource certain tasks and business functions to.  

Establishing a business is often a daunting task. The U.S. Small Business Administration (SBA) provides plenty of helpful resources to help entrepreneurs get started, from planning and launching your venture through to managing and growing it.

What is the secret to running a successful small business? What are the key elements that should be considered? Are there common pitfalls to avoid? Let’s look at some of the key elements of starting and managing a small business in more detail.

What should be included in a business plan for a new small business?

From pitching to investors to evaluating growth plans to defining strategy, business plans are critical documents that serve multiple purposes.

While each may look slightly different, the best business plans contain several key elements:

• Company description. What does the company do, what is its purpose, and what does it hope to achieve? This section should include details of business structure (for example, a sole proprietorship or a limited company), business model, industry context, mission statement, relevant background information, business goals and objectives, and team information.
• Market analysis. Factor in estimated market size, the business’ market positioning, and an overview of the competitive landscape. This section may include a SWOT analysis and competitive analysis, all supported by robust evidence and market research.
• Details of products and/or services. List information about new and existing product and service lines (such as their categories, key details, and features), any intellectual property, and how product and services will help achieve profitability.
• Customer segmentation. Explain the target market and your target customers, touching on demographics such as their age range, geographical location, level of education, buying behaviour, technological ability, earning/spending power, and their values and beliefs.
• Marketing strategy. Marketing plans generally focus on four key areas (the ‘Four Ps’, or ‘marketing mix’): price, product, promotion, and place. They should be directly informed by your customer base and target audience insights.
• Logistics and operations strategy. What workflows and systems are necessary to make the business needs and activities a day-to-day reality? Consider factors such as suppliers and supply chain, production and manufacturing, facilities, resources and equipment (such as customer relationship management (CRM) software, shipping and fulfilment, and inventory management.
• Financial plans and information. This section details financial projections, pricing details, income statements, balance sheets, business insurance, cash flow forecasts, start-up costs, and potential return on investment (ROI). It can spell the difference between gaining investment or not, so it’s important to know your figures inside-out.

Are there best practices for naming a small business?

So, you have a great business idea, but you’re stuck when it comes to the business name? Naming a business can be tricky. After all, it contributes towards a customer’s first impression of, and what they can expect from, the business, it differentiates you from competitors, and it’s integral to your overall branding.

GoDaddy, one of the world’s largest web hosts, has 10 step-by-step pointers for naming a business to help you get started:

1.     Think about what you want the name to convey
2.     Brainstorm possible names
3.     Ensure it’s easy to write and remember
4.     Ensure it’s scalable
5.     Describe the business but avoid being generic
6.     Tread carefully with geographic names
7.     Avoid obscure words
8.     Don’t follow trends
9.     Avoid decisions by committee
10. Check for domain availability.

What finance and funding options are available to small businesses?

Businesses live or die according to their financial health. As such, understanding how to manage start-up costs to get a new business up and running is critical expertise for budding entrepreneurs.

Without this knowledge – and the skills to secure, manage, and maintain adequate funding – many new businesses are doomed to fail: according to SCORE, 82% of new businesses fail due to cashflow problems.

Fortunately, there are many potential financing options available, including:

•       self-funding (using personal savings and ‘bootstrapping’)
•       crowdfunding
•       venture capital
•       small business loans and business credit cards
•       incubators and accelerators
•       government grants and subsidies.

Whatever methods are used to support financing efforts, keeping track of business finances is critical. Many small business owners manage their own finances using professional accounting software; others bring a bookkeeper on board to help, especially once the enterprise is more established or growing rapidly. Whether or not this is required for your venture is likely to depend on the scale and complexity of the business, and the available in-house skill set.

What are the key factors to consider when marketing a small business?

Marketing efforts can often include a lot of trial and error – particularly in the early stages of launching and growing a small business. Your chosen marketing plan and strategy will be influenced by the type of business, the industry it operates in, and the methods that are most likely to engage the specific target market. An online business, for example, may rely on markedly different marketing tactics to a local, bricks-and-mortar greengrocers – or not.

There are four key types of marketing to consider for your small business to help you reach potential customers:

• Email marketing – Collect email addresses of customers who may be genuinely interested in your business and engage them with exclusive news, discount vouchers, events, free gifts, competitions, product tips, and other interesting or entertaining content.
• SEO marketing – Effective Search Engine Optimisation (SEO) increases the chances that customers will find you while searching online. SEO criteria are frequently updated, so staying on top of the latest developments – and tracking performance – is important.
• Social media marketing – Social media platforms (such as Instagram, X, TikTok, and YouTube) offer a highly cost-effective, versatile, and immediate way to interact with a target audience. Not sure how to get started? Many platforms offer guidance on how to get the most out of their platforms, such as LinkedIn’s ‘The Business Owner’s Guide to LinkedIn’.
• Event marketing – Appearing at relevant events and occasions – for example, a baker specialising in wedding cakes organising a stand at a wedding fair – can be a great way to showcase new products and services, engage prospective customers, and boost brand awareness.
• An online presence, such as a company website, is considered essential in today’s digital world. Long gone are the days when you needed to pay someone to create a basic site for you; now, there are numerous platforms that are designed to provide simple, intuitive, and quick website set-ups (think Squarespace, Wix, Shopify, or WordPress). Pair that with engaging content, an understanding of SEO techniques, and great user experience, and your virtual ‘shop window’ is ready to go.

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You’ll study a range of topics across the business and management discipline, including human resource management, financial management, operations management, business innovation and intelligence, data-driven decision-making, marketing, cross-cultural management, and international trade.