------------------ ARTICLE START ------------------ Basic Ingredients of Small Business Management

This article is about most important basic ingredients necessary to manage a small business. However, they are also necessary to manage very big businesses as well.

As all entrepreneurs know there is just one thing everyone needs to do, but most don't like it very much. It's solid foundation of a business controlling system, your accounting/bookkeeping. Being able to control your business requires an up-to-date accounting. However, sometimes rough pictures about your business situation and development are enough to decide what has to be done next.

In these situations your controlling system needs to use other figures, as accounting data you usually get once per month. If your controlling system allows you to use early indicators, such as number of customer contacts in a given period, than you could be glad, because you got a system which enables you to see what's actually going on and not what has happened in past.

To have control of your business needs a controlling system where you get weekly reports, which just show you most important numbers of your business development. There are some numbers which will always be important, such as customer contacts, new customers, customer loyalty as well as some data from your accounting system, such as your total receivables, payables and your bank account balance, which have to be observed carefully.

But your controlling system won't run your business, so it is most important to have a lean organisation as it is called these days. It's most important to have an idea of your workflows, so that you are able to adapt your organisation to your needs. This will save tremendous time, which could be used to develop or improve products and services for your customers. There are many ways how you could structure your organisation. Being able to retrieve documents from your archives fast is one effective way, to save a lot of time. A small archiving system could be set up within minutes, if you don't like to use document scanning. You only need an index list of your folders, than all documents have to be indexed as well.

------------------ ARTICLE START ------------------ Bottleneck-oriented Business Management Simple and effective Business Management

In every enterprise there are, at every time, one or more bottlenecks, which have influence to commercial situation. Bottleneck-oriented business management has purpose to early track bottlenecks and to remove them, to allow an optimum of commercial development. To know at any time, what a business lacks of and to be able to add missing things, is today a determining competition advantage. Bottlenecks can be, e.g.:

* low sales proceeds * high due or overdue accounts receivables * low liquidity (Cash on Hand, etc.) * high amount of liabilities * low number of customers * too many new customers * too high capacity utilization * defective administration or management * and a lot more.

These example show that bottlenecks not only concern negative circumstances, but also can apply to positive commercial development. If an enterprise takes up many new customers, this results in new orders, which lead to other circumstances, like a possible excess in capacity utilization. In case excess of capacity utilization stays for a longer time, this may result in a lower employee motivation, because of a slump in working atmosphere within company, which then could lead to less qualtiy of work performed.

Due to a TIMELY reporting system many companies take care of reaching desired commercial development. However, a regular analysis of expenses or annual reports are not enough to control a business today. In today's dynamic markets these evaluations are too statical, too much oriented on past commercial development, which had been achieved. Also cost accounting only shows what has happened in past. The actual direction in which a business is running could not be seen.

Imagine a business to be a car. If you sat down in a car, do you like to receive information from instruments from last year or month? Probably not. You would like to have actual information about fuel tank content, coolant temperature and a lot more. Bottleneck-oriented business management should exactly bring most important and actual information about a business to you, including so-called early warning signals ( Screenshot abenetis ERS-Diagram).

Data oriented to past for early-warning-systems?

A working early-warning-system needs data which are not oriented to past, like from cost accounting or year-/month-end closeings. It needs data from so-called early indicators, which has to be gathered from different areas of an enterprise. Of course, figures from finance and accounting department belong into an early-warning-system, but they only have a subordinated role, because they are oriented to past.

Nowadays reporting must show present situation of a business. In many businesses expenditure of time for reporting rose considerably, due to today's flood of information. Aggravatingly added to this, is selection of really relevant business ratios, which allow an appropriate overview of actual business situation. Too often reports are prepared, which are not perceived by anybody, due to lack of necessary statements about business development.