Importance of Management Skills in Small Business

For a Small Business to grow, expands and flourish the management team needs to follow basic, yet profound skill sets to achieve success of the business. If these management skills are not taken seriously enough the end result will quickly become failure of the business. There are three key management skills that small business managers need to follow for success these are; Technical skills, Human skills and Conceptual skills. Then there are specialized skills that are imperative for small business success to occur these include; Planning, Organizing, Directing and Controlling. Small Business owners might not obtain these skills because of not having the opportunities to learn these skill sets through the use of courses or university education. Without these skills small businesses will find it near impossible to be successful but through the implementation of the skill sets small businesses will experience growth and prosperous times.

Importance of Management Skills in Small Business

Technical skills

Technical skills are the skills that obtained when the manager of the small business has the capability to recognize and use the knowledge, techniques, tools and equipment for the explicit tasks of the small business in question. Technical skills examples that managers should be proficient in include computer programming and accounting as they are processes or working with physical objects.

Human Skills

Human skills are the interpersonal skills management need to enable their staff to work effectively and efficiently. Within the adaption of human skills, there is a need for the ability to communicate, motivate and lead employees to meet and accomplish goals and objectives set to them. It is vital for a manager of a small business to have human skills because of the need on all sides of the business, this can be seen through the use of communicating effectively to their staff.

Conceptual skills

Conceptual skill are the managers ability to see the organisation as a unified whole and to understand how each part of the overall small business work together. Conceptual skills involve the ability to see the big picture by acquiring, analyzing and interpreting all the information passed to them by their subordinates. A manager that is efficient with conceptual skills will be able to pinpoint how changes in one section of the organisation will consequently affect other parts of the organisation.


Planning is the process of anticipating future events and conditions and determining courses of action for achieving organisational objectives. Effective planning can help the management team to cement the ideas for the small business as well as trying to minimize and avoid expensive mistakes and pick up on great and beneficial opportunities. The planning process should take place at the start of any new projects about to be taken on board, this can be done through the help of using mind mapping skills, listing or a project managements pros and cons list. Without planning the organisation is set up to fail as they cannot justify its budgeting needs of time, labor, costs and materials needed for the project to be completed.


Another skill that is vastly important to the success of the small business is organizing. Organizing help sort and separate work into manageable units by determining specific responsibilities necessary to complete the small businesses goals and objectives. While organizing is paramount in organizing projects, it’s all also imperative for planning for staff to perform the tasks. The management need to be able to perform the necessary tasks and transfer power and responsibility to staff, who can adequately meet the goals and objectives of the small business to a high quality and on time, if staff are not properly sourced for the roles being performed the project will thus fail and intern hamper any long time success of the small business.


An imperative skill that managers must possess for a small business to succeed is directing, which is the motivation of the employees by managers to accomplish organisational objectives. The tasks involved for the manager is to explain procedures, issue orders and oversee all mistakes until they have been corrected. Other types of directing that managers need to use are through getting their subordinates to agree on how they will meet their objectives and inspire them to step beyond what is expected of them by the business. Directing comes from having leadership qualities of being able to motivate and inspire all employees into following their instructions as well as giving them ample opportunity to achieve the goals and objectives that have been set.


Controlling is the skill of evaluating an organisation’s performance to determine whether it is accomplishing its objectives. The purpose that a manager uses controlling is to assess the success of the planning function at the end of all projects no matter the size, the controlling skill allows for feedback for planning in the future. There are four standard steps for controlling to be an effective tool, these are the establishment of performance standards, monitor actual performance, compare actual performance with established standards and to take action to correct and mistakes if needed.

Consequences for Not having Management Skills

Small businesses have one fundamental flaw that sets them apart from big business, they don’t have the funding and the man power to cover all their mistakes, these mistakes can easily be avoided by the induction of management skills. Without the careful and succinct use of these skills within small businesses will quickly loose clients which will lead to less revenue which will lead to the failure of the business.

Without careful planning and organizing, there can be no overview of products that the small business will be using is target to the right audience or socio economic market. Without the human skills being used by management within the small business there would be a level of discontent and dishearten of all the subordinates, this will be through the lack of bonding between management and workers over not just work issues but also social issues. This can create workplace politic problems the draw much needed attention away from the work at hand thus not achieving the goals and objectives that have been set. Also if human skills are not being met within small businesses there is no way for management to be able to update and help employees when they are trapped in situations that are unfavorable to the business or to the successful completion of projects.

If small businesses did not take having technical skills serious when starting the business, they will soon be in trouble, technology is the back bone of all businesses throughout the world, without technology businesses would not be able to order new stock, send purchases to clients, communicate with other employees and investigate enquirers. Technology that is taken for granted such as computers, phones and tills all need proper training and careful looking after, without this employees would have no idea what to do when placing a transaction through, who to call for ordering new stock or checking emails on their computers from clients wanting to purchase the product. If technical skills are missed out by the business vital cash flow from potential clients are missed out thus having a detrimental effect on the success of the small business.

Conceptual skills in management is a great asset to sustainability and growth of small businesses. An lack of conceptual skills is the most common reason why small businesses struggle or fail, this is through management not looking at the wider picture only focusing on one section believing this is the answer to being a successful business. This can happen in the short run, but not in the long run, with the long range plans for the future direction of the business, also parts of the business such as bills and expenditures are not kept under wraps and documented correctly compared to the income of the small business can plummet the business into debt quite quickly through unexpected bills pilling up and needing to be paid all at once.

Reasons for Not having Key management Skills and Introduction Ideas

When small businesses first start up there is great deal of of idealism that goes into how the business was going to succeed in the future. After the initial start up many of these small businesses get trapped into a constant cycle of repetitiveness, leaving no room for growth through the introduction of key management skills. The reason for not have the key management skills can come from various number of different reasons, the first is that there is no adequate training for the manager within the business. This could accumulates from the fact that usually a small business owner is an entrepreneur or just coming out of an apprenticeship, meaning that they have the skills and the idea for what their product is but no idea how to run the actual administration side of the business. For the management skills to be in practice within a small business an education within the management field, or courses would enable small businesses to start using management skills.

The second reason for small businesses to not have key management skills within the business is through problems of attracting key quality staff. Small businesses are not the first area for highly educated businessmen and women to look for employment because of the volatility of failure of small businesses, they mainly look for well established large organisations to prosper and grow within. Small businesses are only attracting these types of staff who come from family connections or who have become tired of the corporate world and its fast lifestyle and have now looking for a change. This gives the small business only a slim chance of being able to attract staff that can help introduce and help prosper with the use of key management skills.

The third reason for why small businesses are not introduce key management skills within their business is because of the structure the business is under, such as the family business that has been operating for several generations. These businesses have the older generation in power positions that have no formal education about business or about the changes that are needed to stay financially viable in today’s business society as well the older generation have a resistance to change. The old and outdated views of how to run a business are passed down to the younger generations, who might not have any formal education themselves, leaving the small business to suffer have no staff who have knowledge on how to integrate and flourish the key management skill into the business. There is a state of favoritism that comes from family small businesses with an acceptance of poorly suited family members given management positions over more suitable staff; this gives no chances in the hiring of outside staff with the skills and qualification to the small business.

The current economic climate has turned vary volatile with the recent global financial economic crisis, small businesses have had to cut back on staff mainly in the area of administration. The loss of income that leads to the loss of staff effectively cuts out all management who could effectively implement the management skills that could in the long run keep the business afloat.

There is various ways to change the direction of small businesses that are not on the right track by no using the key management skills. The first is to address all staffing roles, this can be done through the use of a collective meeting of all staff and management, this meeting will cover the workings of the business to see what parts contributes to the downfall. This might lead to dismissal of staff but in the long term for the success of the business it is beneficial, hiring of staff who have or new management team who have clear goals and objectives on how to turn the organisation around and implementation of the new key management skills.

Another key change is the introduction of a business mentor into the management team, this gives a organisation expert the chance to help and develop certain parts of the management team to change the direction and structure of the small business. The mentor will give specific training and advice as well as help develop new goals and objects tailored around the new direction of the business. Also the mentor will show how to implement key management skills into the management side to achieve greater long term success.

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