A small business may be defined as a business with a small number of employees. The legal definition of "small" often varies by country and industry, but is generally under 100 employees. The common characteristic that sets them apart from large enterprises is that they posses less tangible properties.

Small business management pertains to the independent ownership, supervision and control of assets, resources, products, services, workforce and profits of an enterprise which is not prevalent in its area of operation.

In an economic atmosphere that breeds and sustains entrepreneurship, a lot of individuals are attracted to the prospect of possessing and directing his own business. They choose having a small enterprise to be close to costumers--enabling fast, flexible, and personalized service, to innovate less expensively, and to manage solely.

Managing both small and large businesses involves the five major functions of management--planning, organizing, directing, controlling, and coordinating.

The mistake that most small business owner-managers commit is giving less attention to planning and controlling functions. These two, when fulfilled effectively would result to excellent goal setting. And the success of every business relies heavily on its long-range goals.

The most popular approach applied to most small businesses is management by objectives or MBO. The reason for this is that it is result-oriented and jobs are perceived in terms of achievements rather than simply functions.

The first step in developing an effective MBO program is to define your business. A transparent and attainable vision of the business is critical for planning, marketing, product development, building and equipment, and financial and staff needs.

The next step is to set both short- and long-range business goals. Long-range goals would serve as the mold from which your company's MBO program would take form. These goals would triumphantly be attained through management and employee communication. The staff should also take part in the formulation of goals, to increase their sense of commitment in fulfilling them.

The third step in developing the MBO is devising a work plan. The work plan should address the following areas: (1) goal--should be specific and concise; (2) measurement--benchmarks to be used; major problems to be anticipated; (3) work steps--most essential steps to be completed at a fixed time; and (4) supervisor's goals--employees should identify which of their manager's goals relate to their own.

The fourth step would be to report progress. An MBO program must include a provision for regular progress reports. Goals and objectives can only be attained through conducting regular record and review of progress. Progress which is below expectation can enable problem identification.

The fifth and final step would be to evaluate performance. This is done by compiling and reviewing the past results of the steps done in the development of the MBO. Measure every element and know if each coordinated and supported each other.

Small businesses face an array of problems most commonly, bankruptcy and under- capitalization This is often a result of poor planning rather than economic conditions - it is a common rule of thumb that the entrepreneur should have access to a sum of money at least equal to the projected revenue for the first year of business in addition to his anticipated expenses.

Getting into small businesses is not as easy as it seems. To avoid the problems stated above, the owner-manager should first ensure that he has or would be able to raise enough funds. And no matter how small his enterprise is, he should not fail to apply the major functions of management.

Copyright 2007 Ismael D. Tabije

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When business grows crossing the boundaries defined by limited internal resources, including your own and your executives’, it pays to engage the services of external business management consultants. Large business management consulting houses such as McKinsey and Company or PricewaterhouseCoopers, pride in their vast exposures to handling wide ranging business complexities under differing international conditions.

Businesses become complex as time passes by and handling them is a new challenge. Business houses of all types and sizes depend on external experts, management consultants, who analyze the situation on hand and optimize the possible, profitable way ahead. This may include ways to improve the firm’s structure, efficiency and returns.

The latter option always gives the firms the cost benefit over recruiting managers, without the long term commitment. Normally, small businesses are served by small consulting firms which range in size from a single practitioner firm to a team of professionals.

Why Large Corporations Hire Business Consultants?
The spread and expanse of large, multi billion dollar corporations involves operations in complex situations besides being engaged in a variety of transactions. Here is a snapshot of other circumstances when large corporations engage management consulting firms.

1. Market researching and site selection for their offshore expansion plans to help make decision on a new venture

2. Fund raising through either of the IPO, private placement of instruments of investment or loans and venture capitals including fulfilling statutory requirements
Vertical and Horizontal Expertise of Business Management Consulting Firms

Barring a few large consulting firms, most of them specialize in particular lines of businesses. You might have heard of Public Issue Management firms or firms specializing in Market Research and Finance Management and so on. Such consulting firms can be termed as vertically specialized in their fields. Where as companies like the ones mentioned above, McKinsey & Company are experts in multiple areas of business conducting right from financial auditing to offshore acquisitions and can be termed as firms with horizontal specialization.
Business Management Consulting Firms, by their virtue of experience of having handled various situations will have a practical approach to problem solving.

Business Management - What Are The Good Traits
To start a business and have it up and running successfully, you will need to think of some realistic business management plans. With these plans and your dream in mind, you will have to work through the initial difficult stages to build up good business management strategies and the ways to achieve them. Your business-management skills may be the crux between mediocrity and success.

The first and most important step in a good business management plan is to set clear specific goals and objectives. It is easier to achieve goals or objectives that are distinctive and focused. It makes good business sense to organize the "to-dos" for each day so that there is better focus on every task.
The more time you spent on perfecting a skill, the lesser will be the time taken to complete the task.

Another purpose of setting goals and objectives is to create a way to measure performance and track accomplishments. Such goals and objectives have to be challenging but achievable. You need to be creative and innovative in order to achieve the specific goals and strategic objectives set up in the business management plans.

At the same time, create your company's mission and vision statements and find solutions on how to implement or accomplish them. Define the company's passion and the methods to excel in it. Such business management strategies will strengthen the company's competitiveness in the industry. In addition, setting up long-term goals will determine the company's position in ten years' time and mark out the path to achieve them.

Some entrepreneurs may confuse activity with productivity. Most of the entrepreneurs who succeeded have the ability to identify and categorize specific activities that are extremely crucial or create an extraordinary significance that will contribute towards the overall success of the business. A successful entrepreneur will learn through other people's knowledge and efforts especially those of their clients or competitors. Capitalize on these new ideas or concepts and your business may expand with lesser efforts contributed and within a shorter period of time.

Due to continuous changes, good business management is an ongoing process to constantly evaluate strategies and monitor performance to see if there are better ways to accomplish the goals and objectives or whether improvements and adjustments need to be made. This may even lead to changing the company's mission or vision statements.