U.S. Small Business Administration

"Poor management is the greatest single cause of business failure," warns Steve Muhlhauser, California Assistant Regional Administrator for Business Development for the U.S. Small Business Administration.

Management of a business encompasses a number of activities: planning, organizing, controlling, directing and communicating.  Most business failures aren't a result of bad economic times; rather, they stem from improper management.  The cardinal rule of small business management is to know exactly where you stand at all times.

Some of the more common mistakes managers make include:

• Hiring the wrong people;
• Inadequate employee training;
• Trying to do too much;
• Misuse of time;
• Absentee ownership.

In a big company, a bad month in one division can be offset by other divisions.  In a small company, there's nothing else to fall back on, so a bad week can be fatal.  Managing a small company means staying on top of the business so that you can react instantly and decisively when problems arise.

Bad management isn't limited to poor economic times; it can happen even during the best of times.  Some management consultants say their experiences with small businesses confirm that over expanding, hiring weak personnel and being over confident are frequent management mistakes that occur when times are good.

Along with those is the inability to handle growth.  "If the business is successful, it takes on a life of its own," says one owner.  You become a "situation manager" rather than just a people or business manager.  Suddenly, you are balancing opportunities, investments and energy.

Whether the times are good or bad, the successful manager is the one who remains calm and confident and who turns adversity into opportunity.

And as a successful manager you must also be a good leader.  Many experts believe that leadership is a form of behavior: of persuading and inducing, of guiding and motivating.  They believe that a well-rounded leader is a master of certain skills, creates a climate that encourages productivity and directs and controls employees' activities.

Very often, leadership style reflects an individual's personality.  However, you should keep in mind that what works well with one group or individual; may not work as well with the next.  As a result, good leadership requires a flexible approach, one that is based on the people involved and the situation at hand.

Advises one small business owner, "Surround yourself with competent people, then train them and learn to delegate."  And when you do delegate, keep the following tips in mind:

• Don't constantly check up on employees while they're working;
• Believe what they say;
• Avoid having to know every single detail at all times; and
• Be sure you know enough to stay on top of things.

"Delegation is an issue of trust," says another owner.  "But it cuts both ways.  You can't get someone to trust you unless you trust them, too."

*Excerpted with permission from "Small Business Success" magazine, Volume 1, produced by Pacific Bell Directory in partnership with the U.S. Small Business Administration and the Partners for Small Business Excellence.