Small business owners wear many hats. The most important that of manager. But with so many things to manage, where do we begin?

Many business owners initial attempts at managing the operational side is done by trial and error. Then the internet came along and made everything available at our fingertips.  Operational management material like Six Sigma, The Goal: A Process of Ongoing Improvement or The Innovators Dilemma became even more widely read and followed.

But us poor small business owners have little time to implement these wide-ranging practices of the managing elite. Many times we’re left to come up with our own way of doing things.

Operations Management The Stoplight Approach

I too faced this issue years ago. And while sitting in front of a common stoplight, I had an epiphany. Simple is better. Just like the street light sitting in front of me. If red yellow and green could manage traffic, why not my company? Here was my simple way to label every management decision I was currently facing.

• Red means stop, because it needs immediate attention.
• Yellow means caution, because it needs attention but maybe not today.
• Green means keep going no immediate action required.

Step 1: Break down your company into specific areas that need to be managed.

• For the service industry it covers things like – managing employees and service calls, transportation and delivery, tools and equipment, office and administration, handling of financial transactions, legal issues etc.
• For retail it covers things like – cash handling, inventory, merchandising, safety and security, customer service, refunds and returns, facilities etc.
• In product production it could be – facilities management, core materials and inputs, labor, assembly lines, warehousing, delivery and fleet operations etc.

After lumping together the different parts of our operations, we must take a close look at the performance and current state of each one. Try to identify specific areas of both strengths and weaknesses. Especially highlighting those that need the most attention.

Step 2: Rank them in a system that makes most sense to you. Here’s some ideas ranked from easy to difficult

• Using bullet points or check lists
• Ranking by numerical order from most to least important
• Listing each area by pros and cons
• Listing things like a table of contents
• The MoSCoW method  (Must, Should, Could, Won’t)
• The Kano Method (organizing by customer requirements)
• Opportunity Scoring (taken from Anthony Ulwick’s Outcome-driven Innovation (ODI) framework)

Operations Management for the Small Business Is like drowning in a sea of unfulfilled tasks.

Step 3: Make a plan that you’re actually able to follow over time.

The hardest part comes next. Because now you must find a way to manage all these areas. Then make the appropriate changes to our business model along the way. It’s probably best to do things yourself. In areas you need to be in complete control. Like the way your customers view your company.  Many times customers use us because they like us. Any change in this perception makes them hesitant to say the least. Especially if our face is what customers are used to.  If there’s a lot of customer interaction, it’s probably best if you handle it yourself.

Small Business Operations Management Tips For Success:

• Personally, I started with anything labeled red. If it was red, I stopped immediately. Until I could regroup and come up with something that worked. Yellow items I worked on during the end of the day. After the red issues were addressed. This also gave time to dwell on these during the evening and start fresh the next day.
• The use of programs and software work well – especially in accounting, networking, data management, inventory, payments etc.
• Hiring outside subcontractors and gig workers may help  us manage and regain control. Especially in website management, facilities, mechanical, automotive maintenance, and legal or contractual issues.
• Bringing in a manager from outside is also an option. This work especially well when you need a new set of eyes on a situation.

Doing everything ourselves keeps us trapped in self-employed hell or the belief that without us everything will collapse.

There is no one-size-fits-all way to manage every aspect of your company. The good things there are only so many options.

1. The do it yourself way: This is the most common because it keeps us in control, but can burn us out. It also distracts us from reaching our true business potential. Believing we have to do everything ourselves lead us to fear the worst. However, to become a true business owner, we should be able to leave for extended periods. Knowing our managers or employees can handle things without us.
2. The Train your employee way: We depend on employees to do their jobs. To make our company look good and meet the customers needs. But employees can bring life or death to the small business. And it’s up to us to train them. I spent years training the various people who worked for me. Even the most talented and brightest took at least a year. And if we want to move workers into management positions, we need even more targeted and consistent training. Doing so requires us to do whatever it takes and setting clear expectations and guidelines. Then budgeting time and money to provide ongoing training and support for those we expect to manage parts of our company.
3. Hire professionals: This is typically done for payroll, accounting, contractual issues and administration. These positions require specific expertise and knowledge beyond our ability to teach.  Sometimes these can be done by software and business service companies (like payroll and accounting). There are also subcontractors and “gig workers” who specialize in specific areas like mechanics, web designers, programmers, maintenance and cleaning  companies.

For more information read our: Simple Guide to Operations Management