Some years ago I had an acquaintance who owned a small business. After a burglary at a neighboring business, he had an electronic security system installed. He was so uncomfortable with it, however, that he refused to learn the code for shutting off the alarm. If he wanted to get into his own building after hours, he had to get one of his assistants to let him in.
This man had put himself in the position of being a hostage to his employees. The term “hostage” may be a bit of a stretch. Still, I have recently realized how vulnerable a position you are in as a business owner if you are ignorant about day-to-day operations. Staff turnover in my office has forced me to become more involved in those operations, including a crash course in learning some complex new software.
If you own or manage a small business and are too much of a “hands-off” boss, your position of authority may be more illusion than reality. If you can’t find what you need in the files (paper or electronic), don’t know how to contact the company that clears snow from your parking lot, or don’t know how much money your company spent last month, you may be allowing yourself to be dangerously dependent on those who work for you.
Being the boss, as any business owner can tell you, means that you are responsible to your employees as much as they are responsible to you. Mutual trust is essential if you want your business to flourish. That trust, however, doesn’t mean taking yourself out of the loop. Part of being a good manager is knowing when and how to delegate. At the same time, it’s unwise to delegate so freely that you isolate yourself from the daily operations of your business.
Here’s a basic list of obvious but often overlooked things an owner or manager ought to know:
· How the accounting system works.
· Exactly what money is coming in and what is going out, including signing checks or approving expenses and being kept up to date on accounts payable and accounts receivable.
· How to use essential software (accounting, invoicing, inventory, etc.), including access to all employee passwords.
· The filing system—how things are organized and what is kept where.
· Who does what—the job descriptions and specific responsibilities of all the employees.
· Contact information and contract provisions for companies or individuals who provide maintenance, technical support, or other services for your business.
If you operate a business, your education is probably in the "what" of that field rather than the "how" of running a business. Your training has taught you how to be an engineer, a plumber, a mechanic, a doctor, or whatever it is you do. It hasn’t necessarily taught you how to run an engineering firm, a plumbing business, a repair shop, or a clinic.
Part of your job as a business owner, then, is to provide that training for yourself. You don’t have to get an MBA to do so; all you have to do is ask questions. If you don’t understand the monthly financial statements or know how to use your accounting software, ask your CPA or your bookkeeper. If you have no clue about the filing system, ask the secretary or office manager to explain it.
I’m not suggesting that the owner should have a finger on every detail. Micromanaging isn’t a good way to run a business. Yet—as I can attest with my newfound software skills—knowing what’s going on is a boost to a boss’s security, confidence, and ability to delegate wisely.
