Question

Provide a detailed explanation of the role of an Operations Manager in a small business. When evaluating the stages of small business growth, when does the role of the operations manager become most critical? Of the major challenges facing today’s small business operational managers, which ones are the most important to the small business owner?

Answer 1

Defining a small business is necessary to avoid misunderstanding of the term. Several attempts have been made at a definition.*” For the purposes of this article that of the American Committee for Economic Development’ has been adapted. This is: (i) Management is independent. Usually the managers are also owners.

Capital is supplied and ownership is held by an individual or small group. (iii) Area of operations is mainly local. Workers and owners are in one home community, but ~2 markets need not be local.

Operational Manager oversees vital aspects of your company such as production, human resources, and inter-departmental communication, and is also responsible for maintaining quality control standards and ensuring that your team meets production milestones and timelines. An operations manager also ensures that various departments of your business are working seamlessly toward your desired goals. It’s essential to understand the full range of an operation manager’s responsibilities, before you hire someone to take on this position.

Manages the Budget

One of the key components of a small business, especially one that is involved in the production of goods, is operating within a budget. An operations manager is responsible for reviewing line items in a budget to determine whether there are less costly ways to accomplish a task. This may include finding quality equipment at a cheaper price, or finding ways to lower production expenses by streamlining the production process and negotiating new contracts. Operations managers also analyze the supply chain to find areas where the budget can be tightened, and they implement cost-benefit analysis to find ways to boost efficiency.

Manages Inter-Departmental Communication

Small businesses that feature multiple departments often find that one hand doesn’t know what the other hand is doing. This can create tension, conflict, and a loss of efficiency and productivity, not to mention hindering desired goals. An operations manager is responsible for liaising with department heads to ensure that each is working in harmony toward production goals, while also meeting quality standards. By centralizing this communication through an operations manager, you limit misunderstandings between your departments, which can also boost morale and motivation.

Manages Customer Service Issues

An operations manager is also the person responsible for dealing with customer service issues that directly relate to product or equipment quality. Once the operations manager has assessed and evaluated the customer issue, she must communicate these problems to staff members and suggest the best methods to improve or resolve that customer issue. This can include complaints with product or service quality, complaints about the customer service process, or complaints about how a product or service was delivered.

Manages Support Services

Many small businesses have support services that can help them maximize their operational efficiency. Whether your company’s support services include information technology, administrative support, financial services or procurement, an operations manager must ensure that these support services are performing to the standard necessary for your business to maintain its expected growth. Your operations manager is also able to analyze key performance indicators to determine if your support services are yielding the appropriate return on investment.

Critical Stages:

The image of the entepreneur as a great inventor and great promoter or the great and daring risk-taker simply doesn't square with the facts. Reality is far less spectacular than this. In fact, the beginning entrepreneurship turns out to be a mundane affair and not at all heroic. There is the entrepreneur without capital resource, without apparent social skills, and without even a good idea. No respectable element in the community is even aware of him, let alone ready to help him. 1 In short, the stereotype of the small businessman in the early stage of organizational growth is an unimaginative man who feels he has a good idea; whose role as a leader of his business is largely a result of his ownership rights rather than leadership talents; and who may or may not be able to develop a few loyal employees. Fundamentally, he is relying on personal skills or a unique product (or method or market) of which he can take advantage. He is usually not concerned about the rate of return, being more concerned with keeping the sheriff away from the door. However, assuming that he is successful-that he is not among the 50 percent of the people who will lose their business and 44 percent of their savings 2 -he will experience a slow but sure increase in sales and profitability. Unfortunately, this is where his problems come in; he is at the threshold of the first critical stage in his organization's growth. A critical stage in growth is reached at this point because prior to this time the business has been a one-man operation, experiencing no real management problems other than "buying low and selling high." However, as the level of business increases a myriad of problems develop: paperwork multiplies, personnel must be added to the payroll, promised dates are not met, facilities get crowded, and so on. At first, of course, a few extra working hours are sufficient to cope with these problems. However, if business is good these minor problems rapidly assume major proportions. Paperwork is not only time-consuming, but more and more is required; the Internal Revenue Service begins to demand more elaborate tax information; bills begin trickling in at all times of the month; and accounts receivable begin to lag merely because statements are not mailed. Furthermore, the increasing number of personnel begins to complicate matters. First, of course, the manager must spend more and more time in recruiting, selecting, developing, and training new employees. Then there is the problem of maintaining an acceptable relationship with employees already on the payroll. Once enough employees are added, the small businessman must begin to comply with unemployment compensation, minimum wage laws, and so on. The problems confronted by the small businessman, once he achieves a modicum of success, may be enumerated briefly. His organization becomes too large to permit him to supervise the efforts of all his people directly. With inadequate supervision, some of his employees become disloyal and begin to resent the hard-driving attitude of the owner, thus creating motivational problems. Competition sets in and gets keener because others see a "good thing" going and sense the possibility of quick or easy profit. The owner-manager (who heretofore has not had to be a real manager but just an owner-worker) is under increasing pressure to delegate work. He usually delegates ineffectively because he is not comfortable in this role. Some of the growth pains of the success image begin to set in-the garage-factory gets too small, the rented facilities somehow seem cluttered, and new quarters seem to be urgently (and expensively) in order. The market for the unique skill (or product or service), of the small businessman begins to dry up, shift toward some other skill, product or service, or, worst of all, is stolen by a (giant) competitor. The manager, is continuously pressed for "time to do what needs doing." The manager experiences an overload of worry. All difficulties become problems of crisis proportions. These problems normally beset the small businessman when he is hiring between ten and thirty employees, and indicate the point on his growth curve where he faces the first serious threat to the continued existence of his business. And the facts are that if he does not begin to think in terms of overcoming these problems, he can expect to go out of business. His competition will become increasingly strong, he will have more personnel problems, his accounting and record-keeping problems will become a "stone around his neck," and he may find that he is being outstripped by other small businesses or by a giant that "doesn't like him." At this stage, unfortunately, either the small businessman will succeed or he will fail. Statistics show that he cannot stagnate and stay small, nor can he even entertain the notion of hoping that his business will stabilize. He must press on or his business will die.

If he is a man who is aware of what it means to manage-to plan, organize, direct, and control-he will pass through this critical phase, will move into Stage II, and become a capable supervisor of supervisors. If not, his business is doomed.

Source:https://smallbusiness.chron.com/core-responsibilities-operations-manager-13975.html