Managing and Maintaining Small and Medium Business Operations

MODULE TITLE: Managing and Maintaining Small and Medium

Business Operations
LO1: Identify daily work requirements

1.1 Determine organizational work requirement

In order to complete your work tasks effectively you need to know what your
organization’s requirements are. Organizational requirements can include things
like ethical standards, business and performance plans as well as goals, objectives,
systems and processes.

You will need to work within these requirements if you are to complete work tasks
to the standard required of your organization. Hence, follow the following:

 Complete tasks within designated time lines and in accordance with

organizational requirements and instructions
 Use effective questioning to seek assistance from colleagues when difficulties
arise in achieving allocated tasks
 Identify factors affecting work requirements and take appropriate action
 Use business technology efficiently and effectively to complete work tasks
 Communicate progress of task to supervisor or colleagues as required
1.2 Prioritizing work activities and meeting deadlines

Tips for getting more out of your time by prioritizing your work:
1. Have a strategy 5. Use to-do lists
2. Recognize what makes you money 6. Focus on one project at a time
3. Set goals 7. Get organized
4. Schedule your time
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1.3 Assigning work activities to relevant staff or contractors to

optimize efficiency
What is Delegation?
Delegation refers to a process where by a superior divides his /her total work
assignment between himself and subordinates manager or operative personnel in
order to achieve both operative management specialization.
When to Delegate
Delegation is a win-win when done appropriately, however that does not mean that
you can delegate just anything. To determine when delegation is most appropriate
there are five key questions you need to ask yourself:
 Is there someone else who has (or can be given) the necessary information or
expertise to complete the task? Essentially is this a task that someone else can
do, or is it critical that you do it yourself?
 Does the task provide an opportunity to grow and develop another person's
skills?
 Is this a task that will recur, in a similar form, in the future?
 Do you have enough time to delegate the job effectively? Time must be
available for adequate training, for questions and answers, for opportunities to
check progress, and for rework if that is necessary.
 Is this a task that I should delegate? Tasks critical for long-term success (for
example, recruiting the right people for your team) genuinely do need your
attention.

To Whom Should You Delegate?

The factors to consider here include:

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1. The experience, knowledge and skills of the individual as they apply to the
delegated task.

 What knowledge, skills and attitude does the person already have?
 Do you have time and resources to provide any training needed?

2. The individual's preferred work style.

 How independent is the person?

 What does he or she want from his or her job?
 What are his or her long-term goals and interest, and how do these align with
the work proposed?

3. The current workload of this person.

 Does the person have time to take on more work?

 Will you delegating this task require reshuffling of other responsibilities and
workloads?

How Should You Delegate?

Use the following principles to delegate successfully:
1. Clearly articulate the desired outcome. Clearly identify constraints and boundaries.
Where are the lines of authority, responsibility and accountability? Should the
person:
3. Where possible, include people in the delegation process. Empower them to decide
what tasks are to be delegated to them and when.
4. Match the amount of responsibility with the amount of authority.
5. Focus on results.
6. Avoid "upward delegation".
7. Build motivation and commitment.
8. Establish and maintain control.

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Rule of delegation

A simple delegation rule is the SMART acronym, or better still, SMARTER. It's a
quick checklist for proper delegation. Delegated tasks must be:

 Specific  Time-bounded
 Measurable  Ethical
 Agreed  Recorded
 Realistic

The steps of successful delegation

1. Define the task
2. Select the individual or team
3 .Assess ability and training needs
4. Explain the reasons
5. State required results
6 .Consider resources required
7. Agree deadlines
8 .Support and communicate
9. Feedback on results

LO2: Monitor and manage work

2.1 Identifying methods for monitoring performance and

implementing improvements

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 Managing and Maintaining Small and Medium Business Operations

Every project or intervention should have a monitoring and evaluation (M&E)

plan. This is the fundamental document that details a program's objectives, the
interventions developed to achieve these objectives, and describes the procedures
that will be implemented to determine whether or not the objectives are met.

Why Are M&E Plans Important?

 State how a program will measure its achievements and therefore provide
accountability
 Document consensus and provide transparency
 Guide the implementation of M&E activities in a standardized and coordinated
way
 Preserve institutional memory

M&E plans should be created during the design phase of a program and can be
organized in a variety of ways. The typically Performance Monitoring Plan
components include:

 The introduction -Information about the purpose of the program, the specific
M&E activities that are needed, and why they are important and a development
history that provides information about the motivations of the internal and external
stakeholders and the extent of their interest, commitment, and participation.
 The program description and framework - The program description should
include a Problem Statement that identifies the specific problem to be addressed.
This concise statement provides information about the situation that needs
changing, who it affects, its causes, its magnitude, and its impact on society and
should be based on the results of the Situational Analysis.

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 Indicators - are quantitative or qualitative factor or variable that provides a simple

and reliable means to measure achievement, to reflect the changes connected to an
intervention, or to help assess performance. One of the most critical steps in
designing an M&E system is selecting appropriate indicators
 Data Sources & Data Collection - Data sources are sources of facts and
observations used to calculate the indicators. The data collection plan should
include diagrams depicting the systems used for data collection, processing,
analysis, and reporting. The strength of these systems determines the validity and
reliability of the information obtained.
 Monitoring Plan - The monitoring plan describes a) Specific program components
that will be monitored, such as provider performance or the utilization of
resources, b) How this monitoring will be conducted, and c) The indicators that
will be used to measure results
 Evaluation Plan - The evaluation plan should provide the specific research
design(s) and methodological approach to be used to determine whether changes in
the Strategic Objective and Intermediate Results have been achieved. For instance,
if a program wants to test whether quality of products can be improved by training
producers, the evaluation plan would identify a research design that could be used
to measure the if and the degree to which producers increased quality of product.
 Information, Decision-Making, and Dissemination - How the data and
information gathered will be stored, used for decision-making and then
disseminated should be defined at the planning stage of the project and described
in the M&E plan. This will help ensure that findings from M&E efforts are used
for project improvement and shared with relevant stakeholders.

2.2 Identifying quality assurance principles and methods

Meaning of quality and quality assurance
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 Managing and Maintaining Small and Medium Business Operations

Quality has no one universally accepted definition. Some common meanings are
given as follows:
 Quality comes from the belief that anything can be improved.
 Quality usually comes from dissatisfaction with the way you’re doing things
now. People with high concern for Quality are people who believe there’s
always a better way.
 Quality implies pride in what you do, integrity in what you make or sell.
Quality means care and consistency.
 Quality is not simply a technique or a skill. It is a way of life. It is a passion. It
is expressed in everything all the time. Concern for quality is something you
integrate into your life.
 Quality is something that requires persistence.
 Quality The totality of characteristics of an entity that bear on its ability to
satisfy stated and implied needs.
Quality Assurance
 Quality Assurance is all the planned and systematic activities implemented
within the quality system and demonstrated as needed, to provide adequate
confidence that an entity will fulfill requirements for quality.

 Quality assurance (QA) refers to the planned and systematic activities

implemented in a quality system so that quality requirements for a product or
service will be fulfilled. It is the systematic measurement, comparison with a
standard, monitoring of processes and an associated feedback loop that confers
error prevention. This can be contrasted with Quality "Control". which is
focused on process outputs.

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 Quality Assurance applies to the entire project, from initiation through

implementation and close out. Quality Assurance provides its greatest value
when it is engaged as early as possible, beginning with the feasibility study.
Principles of QA

Two principles included in QA are: "Fit for purpose", the product should be
suitable for the intended purpose; and "Right first time", mistakes should be
eliminated. QA includes management of the quality of raw materials, assemblies,
products and components, services related to production, and management,
production and inspection processes.

Definition of 'Quality Management'

The act of overseeing all activities and tasks needed to maintain a desired level of
excellence. This includes creating and implementing quality planning and
assurance, as well as quality control and quality improvement. It is also referred to
as total quality management (TQM).

The Quality Management Principles

With growing global competition, Quality Management is becoming increasingly
important to the leadership and management of all organizations. Quality
Management Principles provide understanding of and guidance on the application
of Quality Management. By applying following eight Quality Management
Principles, organizations will produce benefits for customers, owners, people,
suppliers and society at large.
The standard could be found at ISO.

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Principle 1 - Customer-Focused Organization

Principle 2 - Leadership
Principle 3 - Involvement of People
Principle 4 - Process Approach
Principle 5 - System Approach to Management
Principle 6 - Continual Improvement
Principle 7 - Factual Approach to Decision Making
Principle 8 - Mutually Beneficial Supplier Relationships
2.3 Identifying business goals
Typical business goals include
 Improving customer service and satisfaction;
 Forming relationships;
 Facilitating business to business interaction;
 Improve awareness of IT capabilities within the business;
 Marketing;
 Reduce costs;

Marshall says that business goals usually fall within four general areas: service,
social, profit, or growth:

 Service - Goals related to improving customer service satisfaction or

customer retention.
Social - Goals that focus on giving back to the community, through
philanthropy or volunteer organizations.
 Profit - Goals set to increase profits by a certain percentage.
 Growth - Goals related to the expansion of the company, through new
employees, for instance.

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2.4 Communicating with staffs, clients and/or contractors to

monitor work in relation to business goals or timelines

Communication

A famous quote says - “The way we communicate with others and with ourselves ultimately
determines the quality of our lives”

The process of passing any information from one person to the other person with
the aid of some medium is termed as communication.

Improve communication skills at work place:

 Never conduct a meeting or organize a seminar at a noisy place.

 Avoid discussing serious issues at the employee’s workstations, front
office area, cafeteria or playgrounds as noise acts as a barrier to effective
communication and the message will never reach the recipient in its
desired form.
 Before any meeting, the addressee must prepare the agenda of the meeting
and do a complete research on the topic he wishes to speak on.
 The thoughts or the idea must be carefully put into appropriate words and
carefully spoken in the correct accent to create the impact among the
listeners.
 You must first be yourself very clear before communicating with others.
 The meeting or the presentation must be kept interactive for everyone to
participate and take interest.
 Prepare lots of real life case studies so that the listeners are able to relate
themselves with the presentation and some funny one liners, some light
jokes can be cracked in between to break the monotony.
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 Any business meeting must not be kept too long otherwise it tends to
become a little monotonous and the participants tend to lose interest.
 One should always take the aid of whiteboards, digital boards,
demonstrative charts, or simply notepads to scribble the important points
in between for better understanding of the listeners.
 The participants should also never attend any meeting empty handed;
instead carry a notepad and a pen or a paper to jot down the important
points and queries to be asked later on.
 Don’t leave any topic in between, instead first finish one topic and then
only start a fresh one.
 Before concluding the meeting, the important points of the meeting must
be discussed once again for everyone to recollect what happened in the
meeting and the listeners must also clear all their doubts with the speaker
before leaving.
 At work place it is important to understand the recipient properly.

2.5 Defining and applying problem solving and decision

making techniques and processes
The steps in problem solving process are:-
1. Define the problem
2. Look at potential causes for the problem
3. Identify alternatives for approaches to resolve the problem
4. Select an approach to resolve the problem
5. Plan the implementation of the best alternative (this is your action plan)
6. Monitor implementation of the plan
7. Verify if the problem has been resolved or not

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LO3: Develop effective work habits

3.1 Identifying work and personal priorities

An important part of focusing on results is working out what to focus on! Many
people work very hard all day doing little jobs that do not actually affect the
quality of their work.
This concentrates on three areas – clarifying what you enjoy, understanding what
your strengths and weaknesses are, and working out both what your job is and
what constitutes excellent performance.
1. Doing what you enjoy

2. Concentrating on your strengths

3. Understanding how to be excellent at your job

Here is the list of good work habits you can develop:-

Set up a goal or a mission and apply a strong work ethic to provide you that sense
of direction needed to accomplish quality tasks in the shortest time possible.
1. Think positive.
2. It is a good work habit to give importance to good attendance and
punctuality.
3. Value your time, plan your activities and concentrate on one key task at a
time.
4. Apply neatness, orderliness and speed by cleaning up and getting organized
Plan your day ahead of time.
5. Reduce procrastination by motivating yourself with rewards or punishments.
6. Do away with being a cyber loafer and prioritize in doing your work. Make
good use of office technology and avoid using them for personal purposes.

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7. Keep track of important names, places and things to avoid unnecessary and
time consuming recalls and be nice to people.
8. Finish things by being decisive.

3.2 Applying time management principles/strategies to achieve

balance between competing priorities

Concept of Time Management

Time is the most precious yet most limited resource of the businessmen. It is a
unique quantity-the businessmen cannot store it, rent it, hire it, or buy it. With its
supply being inelastic, it is totally perishable and irreplaceable. Everything requires
it and it passes at the same rate for everyone. While important throughout the life
of the venture, time is particularly critical at startup and during growth and
expansion of the venture.

What is Time Management?

Managing time means investing time to get what you decide you want out of life,
including what you want out of the venture created.

Why does the problem of time management exist for the businessman? It is
basically due to a lack of information and a lack of motivation. The businessman
must want to manage his or her time effectively and then spend some time to
acquire the information necessary to accomplish this. Effective time management
starts with an understanding of some benefits that will result.

Benefits of Time Management

While there are numerous benefits to the entrepreneur for effectively managing
his/her time, some of the typical pay-offs are discussed below.

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1. Increased productivity: 4. Reduced time anxiety and

2. Increased job satisfaction tension
3. Improved interpersonal 5. Better health
relations

Basic Principles of Time Management

1. The principle of desire 5. The principle of prioritized
2. The principle of effectiveness planning
3. The principle of analysis 6. The principle of Reanalysis
4. The principle of Teamwork
3.3 Responding to business inquiries promptly and effectively
Customer complaint

Although prevention is better than cure, it is almost inevitable that, at some stage,
you will receive a customer complaint.
Don't assume that a customer complaint is a negative experience because, if
handled well, it can be a valuable asset.
A customer complaint is one of the best opportunities you have for turning an
unhappy customer into a loyal customer. Even the most dissatisfied customer can
become an ambassador, winning new customers for your business by word-of-
mouth advertising.
Whether you win or lose customers can depend on the way you handle their
complaints.
Try putting the following points into practice:

o train your staff to handle complaints well

o make it easy for customers to complain
o welcome customer complaints

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o Deal with complaints promptly.

Benefits of an efficient complaints handling system

o fewer mistakes and less time spent fixing them

o improved product quality
o better understanding of customers' needs
o happier customers
o greater customer loyalty
o more customers through word-of-mouth advertising
o less time and money spent attracting customers
o improving business reputation
o A healthier bottom line.
Complaint handling system
The major cause of a breakdown in communication when handling complaints is
misunderstanding, so it's wise to keep a record of all promises, agreements and
undertakings.
If you are a small business with few or no staff, it is still worthwhile to use the
following steps as a checklist so you are well-prepared to deal with complaints. All
businesses can benefit from a clear system for handling complaints.
1. Decide how you should handle complaints
2. Anticipate potential problems or mistakes
3. Write down your new policy and how it will work
4. Spread the word
5. Make it worthwhile
6. Make it easy for your customers to complain
7. Test It

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3.4 Presenting information in appropriate format to the industry

and audience
Presentation can be defined as a formal event characterized by teamwork and use
of audio-visual aids. The main purpose of presentation is to give information, to
persuade the audience to act and to create goodwill. A good presentation should
have a good subject matter, should match with the objective, should best fit the
audience, and should be well organized.

Characteristics of a Good/Effective Presentation

1. The presentation ideas should be well adapted to your audience. A good

presentation should be concise and should be focused on the topic. It should
not move off-track.
2. A good presentation should have the potential to convey the required
information.
3. The fear should be transformed into positive energy during the presentation.
Be calm and relaxed while giving a presentation.
4. To communicate the desired information, the speaker should use more of
visual aids such as transparencies, diagrams, pictures, charts, etc.
5. A good presentation must be planned.
6. Rehearse and practice the presentation.
7. The speaker should encourage more questions from the audience.
8. The speaker must have a presentable appearance while giving a presentation.
9. The speaker must be affirmative and optimistic before giving presentation.
10.The speaker must state the objectives of the presentation at beginning of the
presentation.
LO4 Interpret financial information

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4.1 understanding financial information and discussing

implication with appropriate person

When looking at a business, the owner/manager needs to know whether the firm is
earning a profit. It does not matter how small the business is, accounting should be
seen as being part of the overall management strategy, with financial information
relating to all facets of the business being readily available.

Financial statements are intended to be understandable by readers who have "a

reasonable knowledge of business and economic activities and accounting and who
are willing to study the information diligently." There are different kinds of users
of financial statements. The users of financial statements may be inside or outside
the business.

The users of financial statements use financial statements for a large variety of
business purposes and their ability to understand and analyze financial statements
helps them to succeed in the business world.

4.2 Classification of Users of Financial Statements

The various users of financial statements are classified and detailed as follows:
1. Internal Users
The internal users of financial statements are individuals who have direct bearing
with the organization. They may include:

o Managers and Owners: For the smooth operation of the organization,

the managers and owners need the financial reports essential to make
business decisions. So as to provide a more comprehensive view of the
financial position of an organization, financial analysis is performed with
the information supplied in the financial statements. The financial

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statement is used to formulate contractual terms between the company

and other organizations.
o Employees: The financial reports or the financial statements are of
immense use to the employees of the company for making collective
bargaining agreements. Such statements are used for discussing matters
of promotion, rankings and salary hike.

2. External Users
The external users comprise of:
o Institutional Investors: The external users of financial statements are
basically the investors who use the financial statements to assess the
financial strength of a company. This would help them to make logical
investment decisions.
o Financial Institutions: The users of financial statements are also the
different financial institutions like banks and other lending institutions
who decide whether to help the company with working capital or to issue
debt security to it.
o Government: The financial statements of different companies are also
used by the government to analyze whether the tax paid by them is
accurate and is in line with their financial strength.
o Vendors: The vendors who extend credit to a business require financial
statements to assess the creditworthiness of the business.
o General Mass and Media: The common people as well as media also
make part of the users of financial statements.

Financial information helps owners/managers to know whether:

· The firm’s profit is improving or declining

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· The owner is earning a sufficient return on the investment in the

business
· How much money (if any) the owner can withdraw from the business
· The business has enough liquidity to continue trading
· The firm can meet repayments of any outstanding loans.
· The firm is financially stable
· The firm’s credit customers are paying on time
What the value of the firm’s assets is and how they are financed

LO5: Evaluate work performances

5.1 Developing and applying performance measures/appraisal
Meaning of performance appraisal
 Performance Appraisal is the systematic evaluation of the performance of
employees and to understand the abilities of a person for further growth and
development
Objectives of Performance Appraisal
– To maintain records in order to determine compensation packages,
wage structure, salaries raises, etc.
– To identify the strengths and weaknesses of employees to place right
men on right job.
– To maintain and assess the potential present in a person for further
growth and development.
– To provide a feedback to employees regarding their performance and
related status.
– It serves as a basis for influencing working habits of the employees.
– To review and retain the promotional and other training programs.
Advantages of Performance Appraisal
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 Promotion:  Selection Validation

 Compensation:  Communication
 Employees Development:
 Motivation
5.2 Completing and keeping necessary records/documents

 Micro and Small Enterprises (MSEs) often face problems with regard to
recording their daily transactions. This is due to the fact that most of the
operators do not know how to make such records in a simple and easy
manner. As a result, many operators find it very difficult to tell their incomes
and expenses and eventually don’t know whether they have lost or profited
from their business activities.
 The absence of recording has also caused some problems in handling
customer needs, particularly in maintenance services and also to provide
sales on credit services.
 The lack of recording also makes it very difficult for the tax offices to levy
reasonable taxes that are commensurate with the business activities. As a
result, operators are complaining on the taxes that are being levied on the
basis of estimation, which they say are too heavy to bear.

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