Small business administration refers to the activity of providing oversight and management of a small business operation. Sometimes one person can manage a small business alone, especially if the business is of a smaller boutique type. But even a relatively small business will sometimes be run by a board of directors or a management group of people.
Small business administration, or small business management, is essential to the success and growth of every business, even a small one. Many major corporations began as small businesses and grew exponentially due to their excellent business management.
What Is Involved in Managing a Small Business?
Small business management and administration involves overseeing all major aspects of a business operation, including:
Lastly, small business managers must ensure that all of these tasks are performed in a way that complies with all applicable federal, state, and local business laws. There are a variety of laws that apply to the full range of business management tasks, e.g. recruiting, hiring, training and managing employees.
For example, almost every aspect of business activities involves contracts of one kind or another, so knowledge of the types of contracts a business might enter into on a routine basis and how they should be drafted would be a topic of interest for almost every business owner.
It might be advisable to have a relationship with a business attorney who can advise the business about its contractual relationships, review its contracts and possibly negotiate and draft contracts as needed.
Legal issues come up as soon as a person starts thinking about starting a business. Among the very first issues would be which legal form to take for the business. The owner must decide whether to operate as a sole proprietorship, a partnership, a limited liability partnership, a closed corporation or other possible forms. This decision might be easy to make or it might be quite challenging to weigh the pros and cons of the various options and decide on the best one.
Recruiting employees through job postings is another area in which federal and state law applies and an owner has many decisions to make. An owner may not want to spend their time dealing with the nuts and bolts of hiring. In that case, the owner has to select a search firm to do it instead. This would necessitate interviewing search firms to find the best match. And then entering into a contract for recruiting services.
Or, the owner might set up a system within the business for handling this task. Among the issues the owner would need to address are the following:
- Posting an Appropriate Job Title: The advertisement of a position opening should start with a position title that aligns with the standards of the industry and accurately reflects the duties and responsibilities of the position;
- An Accurate Summary of Job Responsibilities: A summary of the responsibilities of the position should take the form of a list or paragraph that summarizes what the employee would be expected to do and how they contribute to the organization;
- Requirements: If a person with a specific degree, certification or license is needed, then this needs to be stated. Also, indicate the minimum amount of years of experience sought and the qualities that the person should demonstrate.
- Job Location: The ad posted should clearly state the location in which the employee would be required to perform the job duties. If travel is required as a part of the job, then this should be stated, along with the region and frequency with which travel will be required.
- Statement of Equal Employment Opportunity Compliance: Finally, a job posting should include clear language that indicates that a business complies with the Equal Employment Opportunity Commission’s EEOC standards for hiring, if it has 15 or more employees, 20 or more for age discrimination issues. .
Then, once an owner has found an employee, or two or more, they must consider what the terms and conditions of employment for the employee or employees will be. If the employer expects to have the employee sign a contract that is personal, the contract must be drafted and reviewed, so it is sure to include the terms and conditions that an owner wants. The contract may have to be negotiated.
A business owner would need to know what provisions in an employment contract an employer wants to have. For example, if there is a dispute and a possible claim for breach of contract, should the dispute be resolved in a court of law if necessary? Or, would it be better to provide that the dispute would be resolved through alternative methods of dispute resolution?
And then, an owner must be acquainted with the provisions of the The Fair Labor Standards Act (FLSA), which is a federal law that sets standards for many aspects of employment, including the federal minimum wage and overtime pay. It also sets standards for record keeping and youth employment for both the private and public sectors. Many states also have laws regarding wage rates and hours.
Or, instead of individual contracts an owner may anticipate hiring a number of employees and need a policies and procedures manual to communicate the terms and conditions of employment for the business.
Of course, every business must be certain that it does not discriminate in its recruitment, hiring or managing of employees on the basis of membership in a protected class, such as:
- Race, color, or ethnicity;
- Place of origin or ancestry;
- Marital status;
- Family or parental status;
- Physical or mental disability unless the person has a bona fide qualification;
- Gender or gender identity; and
- Sexual orientation.
The state in which the business operates may also have laws relating to discrimination.
So the simple procedure of hiring an employee can involve federal and state laws, negotiations, contracts and any number of decisions that require consideration of a variety of options.
Isn’t the Small Business Administration Also an Organization?
There is a government agency called the U.S. Small Business Administration (SBA). It provides a number of resources for small businesses that can be very helpful. The SBA offers free counseling for businesses, guaranteed loans, low-interest loans in the event of a disaster and guidance for landing federal government contracts. Information about each of these resources is available at its website, https://www.sba.gov/.
The federal Small Business Administration does not directly manage any small businesses itself. Instead, it offers general counseling and guidance for small businesses and their owners. More specific legal issues would need to be handled directly by a qualified business lawyer.
Do I Need a Lawyer for Help Managing a Small Business?
Managing a small business requires much planning. Federal, state and local laws may apply to almost every aspect of business operations. So, expert management of a business requires some understanding and interpretation of laws at the federal, state and local levels.
You may wish to consult regularly with an experienced small business attorney regarding issues that can come up in the course of managing a business.