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Small businesses need organized and systematic management even more than large businesses. It indeed does not require a large central staff service, nor complex procedures and technologies in many areas. In fact, small businesses cannot afford large staff support departments and complex procedures, but they do require a high level of management. 1. Small businesses also need a strategy. They cannot afford to remain on the periphery, as they are constantly at risk of being in such a position. Therefore, it must carefully consider a strategy that will enable it to stand out. In biological terms, it must find a specific ecological niche in which it has an advantage and can withstand competition. This special position may be a leading role in a particular market – whether geographically, in terms of consumer needs, or with regard to consumers’ values – or it may manifest as exceptional excellence in a certain area (such as the ability to provide a specific service), or as possession of unique technology. Even the smallest businesses need and are able to develop a strategy. For example, the suburbs surrounding large cities in the United States generally have an excess of real estate agents, the vast majority of whom can barely make ends meet. A real estate agent in one region developed a small but highly profitable business by carefully devising a strategy to gain a competitive edge. When he began this career around 1950, he carefully examined the area where he was located and found that the main \"industry\" there was higher education. Although many local residents go to work in nearby large cities, leaving early and returning late, there is also a considerable number of people who are wealthy teachers living locally. These teachers teach at more than twenty colleges and universities. Most of these institutions are small, but a few are quite large. Among all professions in the United States, the turnover rate among young university teachers may be the highest. These young teachers generally teach in one place for a few years before moving to schools in other locations. More than twenty institutions in this region hire over 500 new teachers each year, and a similar number leave their positions as well. This young real estate agent decided to focus his efforts on this market and provide it with the services it needs. He also found that he could get in direct contact with this market at the lowest cost. Because the lists of new teachers that various institutions plan to hire and those who are planning to leave at the end of the academic year are known several months in advance. And of course, every institution is glad to have a reliable person to take on the difficult and troublesome task of finding housing for new teachers. As a result, the real estate agent’s business volume became three times that of firms of similar size, while the costs incurred were minimal. He handles about 500 to 1,000 properties per year; although that’s not a large volume, the profits he earns are almost four times those of ordinary suburban real estate agents. These examples are clearly extraordinary. Because, ordinary small businesses don’t have any strategies. Ordinary small businesses are not “opportunity-driven”; rather, they are “problem-driven” – one problem is solved, and another arises, which is why such businesses generally do not succeed. Therefore, the first requirement for managing a small business is to ask and answer this question: “What is our business and what should it be?” http://mmbiz.qpic.cn/mmbiz/8tMEojO3qchovXrREAowY1qhMvG5PyXW7swEPJewJ1XlYAWgufGo0WLcHK5q9RTNvV2abXUCibH3N3UTGzicic4MA/640? Peter Drucker 2. Small businesses also need a management team. A small business is one that requires at most one person to dedicate all their time to high-level management tasks, with no other responsibilities. In fact, the top executives of the vast majority of small businesses often also undertake certain functional tasks, and this is often appropriate. But this makes it even more necessary for small businesses to identify the key activities required to achieve their goals, and to ensure that these key activities have been assigned to the right people to carry out. Otherwise, these key activities simply cannot be completed. The vast majority of small businesses believe they know what their key activities are, and think they have identified them. However, a simple analysis shows that they are deceiving themselves. Perhaps everyone is talking about key activities, but no one pays them much attention. People turn a blind eye to these key activities – and as a result, they are often overlooked. What is usually needed in such situations is not more people, but rather more thinking and more organizational work, along with a simple reporting and control system—perhaps just a checklist—to ensure that these key activities are indeed being carried out. This actually also means that even small businesses need a senior management team. The vast majority of members in this team are only engaged in senior management work on a part-time basis; their main tasks are likely to be those related to their specific functions. However, small businesses, just like any other businesses, need to – and perhaps even more so than most other businesses – ensure that the entire management team is aware of what the key activities are, what the goals of each key activity are, and who is responsible for carrying out each activity. The resources of small businesses, especially top talent, are limited. Therefore, it is of utmost importance to concentrate the use of its resources. If key activities are not clearly defined and responsibilities are not assigned, it will lead to resources being scattered rather than concentrated. 3. Small businesses should also adopt a “data-driven mindset.” With limited human and financial resources, they must ensure that these resources are used where they can yield results ； Its ability to increase resources is limited, so it must certainly not exceed its financial capabilities; it is necessary to be able to know in advance when and where additional funding will be required. Small businesses cannot withstand the pressure of having to repay large sums of money within a set deadline, nor the sudden need for significant funds. Even when a company is doing well, it generally takes considerable time to raise additional funds. Small businesses must also be aware of the major changes in their environment, as their success depends on their position of priority within a small ecological niche. Therefore, it must be aware of the possibility of any changes in this ecological realm. Although regular accounting documents are necessary, they are not sufficient. Small businesses must understand what position each of their key personnel holds, and whether they are working toward achieving results or solving problems. It must understand the productivity of its scarce resources—the productivity of its labor, capital, raw materials, and supplies. It must understand how its production is distributed among its customers: for example, does its business rely on two or three major clients, with the rest spread across hundreds of clients? Therefore, how vulnerable is it? Special attention should be paid to the financial and economic information that small businesses need but often find difficult to obtain. Of course, today’s small businesses generally already have access to traditional accounting data. However, few small businesses know their cash flow, and even fewer are able to predict future cash flow. They all know or should know about their accounts receivable, but generally they do not know whether their customers, distributors, and agents are holding back their products in warehouses. Therefore, they need information about the ultimate market for their products, that is, consumer data from those who purchase items from distributors. The data for the vast majority of companies is easily available, especially since they rarely require highly precise data. However, the data that small businesses need most is not provided by conventional accounting systems; rather, it is data that links the company’s current situation to the utilization of its key resources. On the one hand, these data enable the identification of future opportunities, and on the other hand, they help to prevent potential risks. Source: (This article is excerpted from the author’s book “Management: Tasks, Responsibilities, and Practices”)