In the previous post I described some of the mistakes that you can make when starting your own business. I mentioned that usually, the founder of the business appoints himself/herself as a manager or the boss of the company. This is a critical moment for a new company, which may determine whether your company becomes successful or becomes doomed for failure.

There is a prevailing opinion among people that management is required in medium and large organizations only. Unfortunately, this is an extremely false assumption, which goes contrary to empirical facts. The size of an organization has nothing to do with the need for management. Management is required if your company has hundreds of thousands of employees and management is required if your organization consists of only you and your companion. Whenever we have two or more persons engaged in a process of achieving some goals, we have an organization and thus we there is a need for management. However, it must be noted that there is a dramatic difference between techniques for managing a large corporation and for managing a company that employees 4 or 5 people.

Management is important because good management will allow you to achieve your company goals in the most efficient way. A business organization is like a living entity. Businesses have inputs (resources, for example money, labour, natural resources, etc). Business process those inputs and finally businesses have outputs, or the results of the processing. The need for management stems from a simple fact that the resources that your business can consume are scarce. If you had unlimited money and other resources, you would not care much about management. However, because the resources that you can use are limited, you must use them in the best possible way.

Hence, we have come to the first function of management and this function is planning. Planning deals with setting goals (company objectives) and then devising a plan how best to achieve those goals.

Even the best plans in the world are useless if they never get implemented in life. Implementing plans is another management function called organizing. Basically, organizing is a process of allocating the resources for carrying out the plans. Keep in mind that your resources are scarce. You will almost always be dealing with limited resources and thus the importance of good organization must never be underestimated.

When managing your organization, you deal with people working with you. You must be able to influence those people to engage in the work processes to achieve organizational goals. Your employees will expect you to share your vision with them, help them in difficult situations, direct them towards achieving the organizational goals. In other words, you will be doing the third function of management called leading.

Think about your business like an aircraft going from destination A to destination B. If the aircraft deviates from the course, the autopilot can adjust it. In business you are both the pilot and the autopilot and the only way to adjust deviations from the "course" is to have good controlling in place. Controlling is an important function of management. It helps you regulate organizational activities and check that the actual performance conforms to your company goals. If there is a discrepancy between the actual performance and your company goals, good controlling can diagnose problems early and let you take necessary measures.

Unfortunately, the above four functions are not enough for managing your business successfully. Usually, you as a manager, will need a specific knowledge of the industry in which your company is going to operate.

Another problem associated with being a boss in a startup is the fact that you will have to deal with everything from hiring new employees to marketing and sales.

You may be thinking that throughout this blog you read mostly about difficulties associated with running own business. However, this is very close to reality. Running your own business is not an easy endeavour. You must be ready to face many difficulties and usually they do arise in front of business owners. However, if you build a successful company, you will be getting such a satisfaction that is difficult to compare to anything. So, don't be scared. Stay tuned and check out upcoming posts.