We have talked about the challenges of Finances, Sales, and Marketing. Now, we come to the last of the big 3 company problems: People. For most companies, people directly contribute to about 70% of Operating Expenses. That means having the right people and employing them properly is a top priority.
To start with, this means that the people in your business need to understand their job descriptions. Many small businesses do not have formal job descriptions and employee handbooks. You should consider that unless you tell people what you want them to do then they will what they consider is correct. The first step here is to define the job and the rules of employment. By doing this, you provide a shortcut to productivity increases.
The second thing is that there needs to be a model for delegation. I prefer the Trust Model of Delegation. This means that people are given more discretion and more freedom over time. This needs to start with what I call Bright Line decision making. When you have a new employee or an employee in a new situation, give them Bright Lines to make decisions with. Things that fall out of those stark choices should be escalated. This gives the employee a front row seat to you making decisions and the reasoning behind it.
Finally, on the topic of decision making, this is the place for Mission, Vision, and Values. By guiding your employees to what is important to you as a business, you make it more likely that they will make decisions the way you want them to. Remember, they represent you in the public. You need them to represent you as you want to be represented.
If you are a sole proprietor, this extends to any partners and vendors that you have. You need to be sure that they are clear on what you are doing and their role within it.
Have a great day!
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