Managing a small business

OK, so you’re a small business owner, and you’ve been negligent about attending to your accounting for the past several years. When you started out, you thought, this accounting stuff, how hard can it be, really? As long as you had a positive bank balance in your bank account, you figured you were doing all right. Oh, right, well, there was that loan from your brother-in-law and that line of credit you got from the bank last year… but the money is still coming in, and you’re still busy.

But do you know, really, how well your business is doing? What are your margins? How much do you make on different product or service lines? Does it pay for you to hire employees? What is your business worth right now?

For too many small businesses, much of this is a mystery, because they have no structured way to record and review the activity in their businesses. But it doesn’t have to be like this. Perhaps this will be the year that you begin to record your activity on a regular basis, review your activity and actually start making decision on the information that you have. This is called management, and I hope that you begin doing more than just “running” the business — you begin to “manage” it. Happy 2010!