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Essential Functions of a Small Business

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Essential Functions of a Small Business

Growing a small business requires essential functions that cannot be ignored. Yes, I’m even talking to all of the solopreneurs out there who assume organisational charts and structures aren’t for them!

No matter what industry you’re in or what type of business you own, you must understand the essential functions your business needs to scale. If you want to be the kickass CEO of your business that I know you can be (and avoid burning out) you’ve got to work on your business instead of in it.

So, what are these essential functions in your business? Watch the video below or read on for more.

Finance Function

You’re in business to make money. It doesn’t matter if you’re a start-up or a multi-million-dollar company, every business needs to have a finance function. No, I’m not suggesting that you set-up a little bank complete with ominous vaults in your office. But you should probably think about outsourcing the financial aspects of the business to an accountant or bookkeeper.

As your business grows and the financial activities become more pressing, you may need to hire people and expand the finance department. If you’re in the early stages of business or you own a small business, there’s no need to overcomplicate these things. Essentially, the finance function is about maintaining and understanding cash flow into the business and budgeting.

Sales and Marketing

Although sales and marketing are two separate functions within your business, I’ve decided to group them because this often happens in businesses and who am I to question tradition?

The marketing function is about marketing the business. It involves building brand awareness and increasing interest in the product or service that the business is selling.

If the marketing function is successful at generating interest, the sales function is responsible for ‘closing the deal.’ Sales convert marketing messages and leads into revenue for the business.

Customer Support and Customer Service

Small businesses usually don’t have to put a lot of focus on customer service or support. However, as sales rise and your customer base increases, you will need customer support to answer questions and deal with enquires.

Operations Function

The operations function is very important because it is responsible for most (if not all) the processes that happen outside and within the business. Not only that, but they are also responsible for maintaining quality, efficiency, and capacity.

Your business needs systems and processes to succeed. There are no shortcuts here, which is why the operations function is so important. They will be the reason why certain processes can be repeated and replicated by more than one person.

The truth is that you are either a visionary or an integrator. Visionaries have amazing ideas, but they need help from integrators to turn those dreams into a reality. Unfortunately, it’s extremely rare that you are both a visionary and an integrator.

Essential Functions of a Small Business

Admin and Management

As it so happens, most start-up entrepreneurs and business owners are visionaries and they have a serious case of the shiny object syndrome. If you’re a visionary, you NEED an integrator. Integrators rule the operations function and if you need more convincing on the importance of having an integrator, I suggest you read ‘Rocket Fuel’ by Gino Wickman & Mark C. Winters!

Admin is quite possibly the most exciting part of owning and running a business, don’t you agree? No? Me neither. I love the strategic planning and decision responsibilities of growing a business but when it comes to admin, I’d rather go and hide in a closet.

However, just because you and I don’t like admin doesn’t mean that someone else won’t. some people LOVE admin. They are passionate about admin work and they find it exciting. Those are the people you need on your team because there’s always going to be someone who loves doing the things you hate, which is one of the reasons why you hire them in the first place!

IT Function

It is very difficult to scale a business in this day and age without having an online presence. The type of IT function your business needs depends on your individual business. A tech-based company will definitely need a prominent IT function to keep everything up and running. On the other hand, a small local business might not require such a large IT team. Either way, if you intend on scaling your business, you’ll likely need to create an appropriate IT function to help you achieve your goals.

Legal Function

You might not need an entire legal team in your corner, but most businesses will need some form of a legal function, which can be completely outsourced if you prefer. Never underestimate the importance of legal advice as a small business owner or entrepreneur. As a business owner, you need to understand what legal aspects you need to be on top of, and having a legal function will help you with things like drafting contracts, handling legal aspects of deals and acquisitions, and so on.

There are many more functions that your business may have or need. Some of these may not be relevant to your business, but here they are if you’re curious:

  • Research and Development
  • Production Function
  • Distribution Function
  • Purchasing Function

Now that you have a better idea of what functions your small business needs, you can begin mapping out your organisational structure based on all of the functions that are operating within your business.

Remember, you can’t do everything on your own. Yes, you may have to wear more than one hat for a while until you can bring on more people. But if you continue to wear all of the hats in your business, you will burn out.

Want some help building your organisational chart and structure for your business?

Download our FREE document, which walks you through each of the different functions within your business and helps you create an organisational chart and structure for your business so that you can better understand the roles and the functions within your business – hope you enjoy!

Essential Functions of a Small Business

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