In the previous post Welsh and White (1981) argued that just the size of small businesses creates special conditions “which can be referred to as resource poverty – that distinguishes them from their larger counterparts and requires some very different management approaches”. Small businesses usually cannot afford to pay for the professional services they need to implement adequate financial control and efficient business systems.
There is however a counter argument. One should ponder why big businesses use a variety of relatively sophisticated techniques to ensure that their businesses prosper. The reason that they bother is that such techniques work! Successful big businesses are clear about what they are in business for, set their goals, formulate their strategies, plan ahead using rolling budgets, regularly review progress and measure performance. Then knowing the state of play, they may have to adapt, re-set the goals and strategies, adjust the budgets and measure again. Underlying these modus operandi are excellent operating systems using smart technology. They draw on their in-house or outsourced team of professionals to make it happen.
For the small business in today’s world of smart technology all is not lost! Resource poverty does not have to be a barrier. There is no reason why the smallest of small businesses cannot employ advanced techniques similar to their big business cousins – possibly even, in a more agile fashion. Today’s environment is so much different from that of 1981.
With excellent off-the-shelf software the resourceful owner-manager can implement excellent business systems. Despite the initial investment of time and effort, once in place good software systems save time and resources. Resource poor does not have to apply when there are software robots to help achieve what was formerly impossible.
For example, take the service business whose technicians use iPads to do a quote on-the-spot, have the customer sign off agreeing to do the work, the work is completed, photos may be taken with the device to show what was done (before and after shots), the technician produces the invoice from the quote and accepts payment before departure. All completed on site. If there is internet or cell phone connection, then the job is recorded instantly on the back office server. The invoice goes directly to the accounting system. Customer information is automatically for future reference and statistics. If the work was completed in a location without network connection the data in the iPad is uploaded to the server as soon as the technician is “back in radio range”. Think what that kind of system does for cash flow as well as avoiding the need for copying information from an order book or similar with the inherent errors.
Thus my argument is that small businesses need not be content with less than adequate business systems. Many of the tools that big businesses use are available at much less cost than they were even just 10 years ago. Using smart software tools and taking the time to learn and apply simple but sound management practices can pay big dividends to small businesses.
Business in Control’s consulting services help small businesses help themselves by providing advice and guidance with what is needed most. Often a carefully thought out action plan over an extended period allows the business to adopt time and cost saving measures that pay for themselves with the increase in the businesses productivity – just like the case study on the FileMaker site.