Why small business management matters so much

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Sure, you obviously have a hand in the essential functionality of your Small Business.

But your management style also has big-picture implications on company culture, the lives of your employees, and brand longevity.

How so? Let’s look at some numbers.

  1. Managers have a direct impact on employee performance and productivity

Data by Gallup notes that a manager determines 70% of employee engagement. Translation? Your approach to management is tied to your employees’ motivation and overall performance, as well as the business’s productivity.

  1. Effective managers help businesses retain their top talent

If you expect your best employees to stick around long term, you’re going to have to, well, be a good manager. If you can do this, you’ll have a better shot at keeping talent—even if other companies try to lure them away with a bigger paycheck.

Piggybacking on the previous study, over half of all exiting employees say that their managers could have done something to encourage them to stay. The same research also notes that only 12% of companies do a good job of onboarding employees.

This data tells us that a big part of managing a business well involves retaining current employees and also encouraging new ones to get off to a positive start.

  1. Good managers go hand in hand with positive cash flow

According to recent small business statistics, cash flow and employee retention are the top two challenges that companies face today. And if you’re managing a business, you’ll have to deal with both. After all, this is your profits we’re talking about.

What are the most important skills for managing a small business?

Okay, so what do you need in order to make great business decisions?

Well, the good news is these skills are pretty much universally helpful—regardless of your business or industry:

Clear communication and transparency

No surprises here. This one’s universal whether you’re managing a business in the United States, Europe, or anywhere in the world.

You need to make yourself available to employees while also being honest and explicit about your expectations.

Regardless of your management style, good business relationships are built by being personable and fostering trust between you and your team.

Attention to detail

From performance data to revenue and beyond, you must be able to dig into data to make decisions.

What role should you hire for next? Why were profits down last quarter? What’s your strategy for handling huge volumes of inbound calls? The ability to hone in on these details makes it a lot easier when you have to make important decisions later.


Juggling so many tasks means you need to know how to manage, prioritize, and delegate what needs to be done. This also requires that you stick to a schedule while working effectively as a team and respecting other peoples’ schedules. Time management rules supreme.

Motivation and leadership

From answering questions to asking them, you’re essentially always “on.” When you’re managing a business, you have to motivate employees in addition to yourself, ensuring that morale stays high and everyone’s able to do their jobs to the best of their abilities.


Let’s face it: you’re responsible for making tough choices. This includes everything from major financial investments to letting go of employees.

These choices shouldn’t be taken lightly, but you often aren’t given much time to linger on big decisions. Small business management requires the confidence to make big decisions and to get them right the first time. At the end of the day, you’ve got to do what’s best for the company.

Alright. Now that we’ve looked at all these big, important-sounding traits, here’s how you can actually reflect them in your actions.

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