Small Business Analysis: “Does size matter?”

• For small businesses
  • Is business analysis useful?
  • Is business analysis different?
  • Should business analysis be handled by a full time employee?

This article first provides a reference for defining small businesses. It then, focuses on two aspects of business analysis for a small business: Strategic Planning and Requirements Management. I use a graphic note-taking technique called Mind-Mapping to set the BA context for this article and then pursue the above questions for small businesses.

Small Business Definition

I am sure we have all heard the cliché, “size matters.” So let’s start with why does size matter for business. In the United States, if you need a government loan to start or maintain your business or compete for a government contract, then how “big” your business is may need to conform to the United States Small Business Administration (US SBA) definition. The US SBA provides some guidelines for “size.”

U. S. Small Business Administration
Table of Small Business Size Standards
Matched to North American Industry Classification System Codes
https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf

The US SBA website above advises you where to find formal definitions for small businesses. Note the definitions are dependent on the industry. US SBA has broken small businesses down per agriculture, mining, utilities, construction, wholesale, retail, information, etc. To give you some six sense of “size,” nearly 98% of small businesses have less that 20 employees; and in fact many are solely run by their owner(s).

BA useful for small businesses? – Of Course

The first question to address from the abstract is business analysis useful for small business. Why yes, it is of course. Before I continue let me add some context to my answer. The International Institute of Business Analysis (IIBA) highlights various aspects of business analysis: Enterprise Business Analysis, Strategic Planning, Requirements Management, and Benefits Management. Certainly I could included all four aspects of BA in this article. However, I want to focus on Strategic Planning and Requirements Management since most BAs work in these areas. With this focus in mind, I have developed a mind-map to graphically display the business analysis work involved in these aspects (see Figure 1).

Figure 1. Mind-map for Small Business Requirements Management

The mind-map highlights the same business analysis work for any firm – large or small. Starting from the top far left of the mind-map, the BA seeks:

1. ​What are the owner(s) your firm trying to accomplish? - GOALS
2. How do the owner(s) plan on achieving the goals? - STRATEGIES
3. When do the owner(s) predict the strategies will be achieved? – SPECIFIC OBJECTIVES (1, 2, 3, 4, 5 years)

Note: the owner(s) of a small business may have informally document goals, strategies, and objectives. A back of the envelope or napkin may be the “parchment” used by the owner(s). Of course it’s the words that are important rather than the paper their on. The BA needs just insure that the owner(s) have set the business direction and limited the chaos.

Moving along the mind-map to the top right, BAs need to understand how the business owners want the firm to be managed. The owners called these statements policies. These policies are general non-actionable statements. Using a rental car company as an example: XYZ Rental Car rents safe vehicles. That is the policy set by the owner(s), but what about the worker(s). The worker(s) needs actionable statements based on the policy on how to make the vehicle safe. Moving down the right side of the mind-map, the worker(s) call these actionable statements business rules. Again using the rental car company: All rent vehicles must undergo a 54 point inspection every month. No matter what the size of your firm, if there is a lack of policies and rules, your analysis will have the word “chaos.”

Given polices and rules are in place and moving to the left bottom of the mind-map, the BA should now analyze the processes. Find out:

​

1. What are the major process? Pass-up on the org-chart and research for how things get done.
2. Who owns the processes? Without owner(s) the processes are out of control. Remember regardless of the size, owner(s) still must approve process change.
3. What performance process measurements are used by the

BA different due to size? – Of Course

These four branches of the mind-map in Figure 1 are vital BA areas regardless of the size of the firm. But, there is one area that is very different – RISK. There are obviously different levels of risk. Large corporations can pivot financially and survive a significant failure. But a small business, most likely, will have to claim bankruptcy. The BA needs to take this under consideration when reviewing recommendations. Note: although small businesses may have fewer financial options, they are quite agile and can change fast and furious mostly because there is less bureaucracy – people to convince.

BA employee vs. contractor/consultant

Remember that the title of “Business Analyst” is a role rather than a formal position. So be aware that anyone who manages change in a business is performing the role of a BA. All businesses must adapt to the changing marketplace, customer demands, and government regulations. As a result, owner(s) need a BA to assist them in determining needed changes in goals, strategies, and objectives which lead to policies, business rules and process changes.

Due to an expected smaller volume of work, I recommend that owner(s) hire a temporary contractor or consultant with a retainer for follow-on work. Note: owner(s) need to seek the following BA skills:

• interviewing owners, workers and outsourcers
• facilitating meetings to a consensus or a compromise
• developing goals, strategies, objectives, policies, and business rules
• modeling processes

Also, the owner(s) need to revaluate the contractor/consultant assignment over time as the volume of BA work increases along with the level of change.

Author: Mr. Monteleone holds a B.S. in physics and an M.S. in computing science from Texas A&M University. He is certified as a Project Management Professional (PMP^®) by the Project Management Institute (PMI^®), a Certified Business Analysis Professional (CBAP^®) by the International Institute of Business Analysis (IIBA^®), a Certified ScrumMaster (CSM) and Certified Scrum Product Owner (CSPO) by the Scrum Alliance. He holds an Advanced Master's Certificate in Project Management and a Business Analyst Certification (CBA^®) from George Washington University School of Business. Mark is also a member of the Association for the Advancement of Cost Engineering (AACE) and the International Association of Facilitators (IAF).

Mark is the President of Monteleone Consulting, LLC and author of the book, The 20 Minute Business Analyst: a collection of short articles, humorous stories, and quick reference cards for the busy analyst. He can be contacted via - www.baquickref.com.

References/footnotes:

• Mind-Maps
  • The Mind Map Book by Tony Buzan with Barry Buzan, Plume 1993
  • Mind Maps for Business by Tony Buzan with Chris Griffiths, BBC 2010