I recently spoke with the CFO of a large local firm and we discussed the differences between management of small and large business.  We discussed not only the tools and methods for managing both but also the different metrics to consider.

From our discussion it was confirmed that whether its big or small business, the way a business is effectively managed is essentially the same.  The truth is that all businesses need to keep an eye their cash flow, revenues, expenditures and profit margins.  All businesses need to understand where the business is coming from, the effective strategies to get new business and how they keep existing clients.  Businesses also need to know how the market is changing – because it is always changing.  And all businesses need to understand their clients every want and need from their product or services and be consistently developing new ways to add value.

Back in my days of working in corporate, when I was responsible for business management activities, I was analyzing the business activities on a weekly basis.  I looked at current and revenue forecasts, expenditures,  proposal activity, customer contacts, project status, and marketing activity.  This was my job, it was was paid to do.

In the early stages of my coaching business I put on the “Business Manager” hat, once a month.  As my business has grown, I am at a new stage that requires me to be the Business Manager on a weekly basis.

Many of my clients understand that business management is an aspect of their job as an entrepreneur and that they need to spend time really knowing where their business stands.  The challenge is whether they have the skills and experience to be efficient and effective at it.

Here’s what I recommend to my clients who are starting their business management:

1. Understanding how often to do your business analysis based on the following:
1. Cash- flow
2. Your sales cycle
3. The phase of business you are in
4. Expected growth in the next six months and year
2. Collect data for the last 6 months of the following – revenue, expenses, # of client contacts, hrs spent doing each type of perceived revenue generating activity, etc.
3. Identify key indicators that reveal what’s working and what’s not in terms of – revenue generation, close ratio, profit margin, and ROI (return on investment) for your time.
4. Identify where you want to be in the next 6 months regarding profit margin, sales revenues, and client service (number of clients/accounts, or number of services to clients/accounts).