|
Introduction to the Management Audit Small businesses often fail because owners are unaware of the many elements that can prevent the business from growing and being successful. Often, small businesses are organized around the manager's specific area of expertise, such as marketing, accounting or production. This specialized expertise often prevents the business owner from recognizing problems that may arise in other parts of the business.This audit will provide the small business entrepreneur with the essentials for conducting a comprehensive search for existing or potential problems. The audit was designed with small businesses in mind and addresses their unique problems and opportunities. DESIGNING THE AUDIT The authors have combined case evidence, logical procedures, expert advice and systematic thinking to create a management audit for small businesses. This instrument is not exhaustive, i.e., the business owner/manager still must rely on personal judgment and past experience. However, it does provide a systematic framework to ensure that critical areas have been addressed before action is taken. The audit is a tool, not a replacement for good management skill. Audits and handbooks cannot do the consultant's job; however, effectively designed instruments, such as this audit, can save time for the seasoned as well as the novice small business manager. The authors studied actual case reports to find out what management practices were being used by small business, and used that information to create this audit. HOW TO USE THIS AUDIT In order to gain maximum effectiveness from this audit, the small business manager should answer all questions in the audit, with an affirmative answer indicating no problem and a negative answer indicating the presence of a problem in a specific area. After completing the audit, the manager can review the analysis of each section of the audit that follows to determine what action is most appropriate. The audit analysis provides an overview of how the various elements of the audit are related. The audit covers seven critical business functions: basic planning, general bookkeeping and accounting practices, financial planning and loan proposals, sales and marketing, advertising and promotion, personnel and production. In the healthy and financially sound small business, these seven functional areas are in balance. In many cases, one cannot work on all seven areas at once. The manager must decide which area to concentrate on based on past practices and the needs of the business. Regular use of this audit instrument can help make the small business manager more efficient. Outline of the audit:
CONCLUSION The authors have attempted to present a methodology for enhancing the success rate of growing small businesses. This methodology helps the small business manager to critically assess the strengths and weaknesses of all facets of the business. By using the management audit instrument and the audit analysis on a regular basis, the small business manager will be better able to see pitfalls in sufficient time to react appropriately, thus ensuring a greater possibility of business survival and prosperity. |