Mentor: Skills to manage essential

Why do small business operators need to develop management skills?

Small businesses depend largely on the enthusiasm, tenacity and expertise of one or two people who own and operate a business.

It is their drive and vision that provides direction and growth. They are the ones who see market gaps and determine what products and services people need.

They organise the marketing, the manufacture, the financing, the networking, the technology. It is their business, their endeavour, their enterprise - and often their headache and their despair.

And why do small businesses so frequently languish and fail? Not because the idea is bad, or the vision is too ambitious or that the expertise is not there.

They fail because of cashflow problems, bad credit management, expensive and misdirected marketing, lack of planning, inability to move beyond the immediate problems and look to the long term.

As John Bream of Victoria University in Melbourne says: "Small businesses which show the most growth are characterised by two things - smart business operators and good business practices.

"It is not enough that the operator has enthusiasm, drive and expertise. The operator still needs to manage the business, and usually manage most parts of the business. Small business operators need to be good at managing."

In New Zealand, normally, the smaller the business the fewer skills or qualifications in management the operators have. This is not surprising.

How can people tied up in the busy and often harrowing experience of running a business have time to obtain the skills to run it properly? Yet if they are to be successful, they really need those skills?

The Institute in Management is experimenting with the design of a certificate programme, offered nationally through several institutions, that is based around the development of business skills while running a business.

Operators develop their own programme to resolve the immediate needs of their business. With a mentor, they develop a plan to meet medium and long-term goals.

They benefit from ongoing assessment of their business and growth plans.

* Send questions to Mentor: business@nzherald.co.nz

Answers will be provided by Business in the Community's Business Mentor Programme.