If you’re running a business, it’s important to understand the difference between business administration and business management. Though the two terms are often used interchangeably, they refer to distinct functions within a company.
This blog post will break down the key differences between business administration and business management.
Business Administration vs. Business Management: Key Differences
The main difference between business administration and business management is that business administration focuses on the planning and execution of company policies, while business management focuses on the day-to-day operations of the company.
There is some overlap between the two roles, but they do have distinct responsibilities. Let’s take a closer look at each one:
What is Business Administration?
A business administrator’s role is to ensure that the company’s day-to-day operations are running smoothly. This includes handling customer enquiries, preparing reports, and maintaining company records. It can also include tasks like record-keeping, budgeting, and scheduling. If it needs to get done for the company to run smoothly and efficiently, it’s probably the responsibility of the business administrator.
Most businesses have at least one team member whose primary responsibility is business administration. In small companies, this person might be the owner or CEO. In larger companies, an entire department might be devoted to these day-to-day tasks.
One of the drawbacks of business administration is that it can be time-consuming. Making sure those files are saved is important, but if you are the owner or CEO of a small business, could someone else take on the responsibility of these tasks?
What is Business Management?
Business management refers to the strategic planning and execution of initiatives designed to achieve a company’s long-term goals. This includes developing marketing campaigns, launching new products or services, and expanding into new markets.
Business management aims to grow the company by making smart decisions about where to invest time and resources. Like business administration, business management is usually overseen by a designated individual or team. In many cases, this will be the owner or CEO of the company.
Business management is much more reactive than proactive. Managers focus on what is happening now, the opportunities and how best to respond to them. This allows businesses to pivot quickly when conditions change. However, without a clear plan to achieve your goals, businesses can often find themselves going in circles or repeating mistakes.
Which should I focus on?
Both roles are essential for running a successful company but involve very different tasks and responsibilities. If you’re running a business, make sure you understand the difference so you can allocate your time and resources accordingly.
Having the day-to-day running smoothly means you have a real understanding of your actual business position both financially and in relation to resourcing. Understanding your day-to-day is fundamental to keeping on track to reach your long-term business goals and understanding your progress.
If circumstances change (as they often do in business), you may have to go back to the drawing board entirely. Businesses that take a proactive approach to administration are often better able to weather economic downturns because they’ve planned for them in advance.
Final thoughts
Your business’s right structure and staffing depend on your specific goals and needs. But trying to keep on top of the administration and ensuring that your big-picture management is on track can be challenging, especially in a growing business.
If you’re looking for stability and predictability, having the right support around you is invaluable to your bottom line and allows you to regain that elusive work/life balance.
Valenta specialises in solving administrative challenges with outsourced business solutions. Our team works with yours to take care of the finer details that have to happen so that you can free up your time for the tasks that are important to the future of your business. Speak to one of our Managing Partners to find out how we can help your business reach it’s potential.