What is Business Management: Functions, Objectives & Financial Relevance

Business management means planning, organising, leading, and controlling the activities of a business to reach its goals in the best way. It helps a company use its people, time, and money wisely to grow and succeed.

Story: Anumita Roy’s Success

Anumita Roy managed a small organic tea business in Delhi. She set a goal to earn ₹1,00,00,000 (₹1 crore) in one year. She built a team of five, gave each person a clear role, and set monthly sales targets of ₹8,00,000. She offered bonuses for reaching goals and tracked key numbers like sales and customer reviews. When sales dropped, she supported her team with extra training. By the end of the year, her company earned ₹1,20,00,000, 20% above her target, while keeping both her team and customers happy.

Four Main Areas of Business Management

Every successful business manager focuses on four main areas to keep the business running smoothly and meeting its goals:

Mastering these four areas helps a manager stay in control and move the business forward confidently.

Why It Matters?

• Saves time and resources
• Supports smart decisions
• Builds strong teams
• Helps businesses grow

Core Functions of Business Management

Read More – What is Managerial Economics? Meaning, Scope & Decision-Making Role

Business management is all about four main functions: planning, organising, leading, and controlling. These help a business run smoothly and reach its goals.

These four functions are the engine that keeps a business running. When you plan, organise things properly, lead your team with support, and check progress regularly, your business has a better chance of growing. Whether you run a small shop, a new start-up, or a big company, good management always helps you succeed.

Objectives of Business Management

Business management focuses on key goals that help a business run well and succeed over time.
 

When you set clear goals, work more efficiently, stay open to change, and make sure everyone works towards the same aim, your business has a better chance of succeeding.

Tips:
 

• Set SMART goals, specific and measurable, to track progress.
• Use data to spot waste and simplify processes.
• Be ready to change plans if the market shifts.
• Use frameworks like OKRs or scorecards to keep teams united.

Financial Relevance of Business Management

Good management helps a business use its money wisely, control costs, plan investments, and manage risks. It makes sure financial decisions support the company’s goals.
 

Good management keeps your business’s money safe and growing by planning spending, cutting costs, investing smartly, and handling risks. This helps your business succeed in the long run.

Strategic Financial Management

Strategic financial management links long-term goals with money decisions. It makes sure the business has enough funds and handles risks to grow safely.

Also Read  - What is Marginal Cost? Formula, Meaning & Business Significance

Example:
A business wants to grow sales by 30% in 3 years. It spends ₹50,00,000 on new technology and uses 60% money from owners and 40% loans to balance risk.

Integrative Framework: Linking Management to Finance

In any business, managers and finance teams must work together. Their decisions on planning, spending, and tracking results must support long-term growth and stability.

• First, when managers create business plans, they also build the budget. For example, if a start-up wants to grow revenue by 25%, it might plan to spend ₹40,00,000 on marketing and ₹60,00,000 on operations. This step turns ideas into numbers that guide business action. For instance, Zomato invested over ₹100 crore in customer discounts during its early growth phase to gain market share.
   
• Next, managers check how the business is performing. They use tools like KPIs (Key Performance Indicators) or scorecards to measure sales, cost, delivery time, and more. Suppose a company like BigBasket improves on-time deliveries from 80% to 95%; this could increase customer satisfaction and raise revenue by ₹15,00,000 in a quarter. Managers can use this data to make quick changes if something isn’t working.
   
• Managing risk and cash flow is another key part. Businesses must keep enough money in hand to pay bills and face emergencies. For example, a mid-sized textile business in Surat keeps ₹10,00,000 in working capital to manage daily expenses and buys insurance worth ₹5,00,000 to cover fire or damage risks.
   
• Finally, management must link financial goals with values like customer trust, law compliance, and social responsibility. For example, the Tata Group combines profit goals with ethical business. Tata Power invested ₹4,000 crore in renewable energy to support clean energy goals while keeping its financial plans strong.
   

When business managers and finance teams work as one, they turn plans into action, reduce risks, and help the business grow in a steady and responsible way.

Conclusion

Business management means planning, organising, leading, and controlling everything that helps a company run well. It helps businesses grow, make smart decisions, manage people and money, and stay strong in changing times.

FAQs

1. How is business management different from just running a business?

Running a business means handling day-to-day tasks. Business management is more about thinking ahead, setting goals, guiding people, and making sure everything works together.

2. Can small businesses use business management techniques too?

Yes! Even a small shop or online seller can plan better, track sales, manage costs, and lead a team using basic management skills.

3. Is business management only about making a profit?

No. While profit is important, effective management also prioritises customer service, employee development, social responsibility, and long-term sustainability.

4. What skills do I need to become a good business manager?

You need clear communication, problem-solving, time management, and decision-making skills. Being a good leader and staying calm under pressure also helps a lot.
 

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About the Author

LoansJagat Team

‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.