Most small businesses start with an idea and not much else. As an entrepreneur starting out you have to set up everything, see through every delivery and worry about where each penny is being spent. But sooner or later the business will grow too large for you to do everything yourself, and you will need some help to bring the company forward.
A successful business is built on a strong, flexible team of staff that can face the challenges with you. This week in our “How to grow your business” series, we’re focusing on how to manage your employees to ensure that you get the best out of them.
A leader first; a friend second
There’s a temptation for small business owners to want to be friends with employees, particularly in an intimate setting like a start-up. However, this will only lead to problems further down the line.
By being overly friendly with employees, you will make things difficult for yourself. You will struggle with accountability and avoid conflict because you don’t want to upset your friend, even if they are actively hurting your business This is no good for you, your business or your employees.
Running a small start-up is not too dis-similar from parenthood. You’re at the head of the house; it can be a loving house where the ‘kids’ are encouraged to succeed and where their input is valued, but ultimately it’s your house, and that house goes by your rules. In a business setting, you also have a responsibility to foster the development of your employees just as a parent has the responsibility for helping their child grow. It’s not about being liked all the time, but it’s about setting boundaries that are good for everyone.
Don’t shy away from human resources
The acronym ‘HR’ doesn’t exactly inspire most entrepreneurs. Some view it as yet another hat that they have to wear on their already crowded head, while others roll their eyes at such ‘corporate speak’ that they feel will set themselves against their small team. But here’s the thing: HR doesn’t need to be de-personalised, nor does it need to be adversarial. In fact, good HR should be present in every start-up because it helps to set procedures and governance.
HR starts with the hiring process. If you hire smart, you can separate out the ones that want responsibility from the ones that are counting down the hours until they can go home. If you have a team who buys into what you are doing with your start-up, then there’s a good chance that they can be trusted with your responsibilities. HR can help with creating a really powerful job description that will attract people who want to work for your business, not for your money.
HR can also include training to help your team develop and grow. Team-building exercises can improve their skillset and enable them to work better with each other.
Retention is important
It’s cheaper to keep hold of existing employees than to find new ones. Recruitment is rather costly across the UK – you can spend anything from £300 on advertising costs to a few thousand pounds if you rely on an employment agency. After hiring, you need to pay national insurance, pension and equipment costs, as well as absorbing the time the new staff takes to learn and get up to speed. It can be easy to underestimate the costs, especially since they tend to go up each year, while your revenue may remain the same. If you need help with allocating your budgets to manage expenses relating to your staff, come and talk to us. We have helped many small business owners across London thrive through our small business management consulting services.
Giving your staff opportunity to grow can help to retain them. Fostering a positive environment, listening to their feedback and having constructive dialogue during one-to-one performance reviews are all things you can do to keep your employee turnover down.
Build a stable dream team
The key to effectively managing the human element of your business begins with having the right profile for the position in advance. Save yourself time, money and effort by specifying the role as clearly as you can and writing down the important attributes the person must have to fulfil the role. Don’t be afraid to look at apprentice and recent graduates either, some of them are eager to learn and be successful.
There’s no doubt that the process of good hiring, training and retention techniques costs money and time, neither of which are always in abundance in many start-ups. However not following this process could cost you far more in the long run.
Business growth advice from Tax Agility
At Tax Agility, we are chartered accountants specialising in small businesses across London. We’ve helped many entrepreneurs grow from a one-person business to a successful enterprise with dedicated teams in place. If you would like to know more about what we can do to help grow your business, get in touch on 020 8108 0090 or use our Online Enquiry Form.
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