Why, if your business has no or fewer than 10 employees, would leadership be the most important business skill you can have?

The Statistics Bit

A micro-business is defined, by the European Commission, as one with fewer than 10 employees, and a turnover (annual sales figure), or balance sheet value of less than 2 million euros. Micro- businesses are hugely important. In 2014 there were 5 million micro-businesses in the UK, employing 33% of the workforce, and generating 19% of turnover (annual sales figure).*

Sole-proprietorships and self-employment has increased over the last few years, with fewer businesses employing staff.*

So as the owner of a micro-business you are making an important contribution to the national economy. What can you do to keep it going, improve your prospects and grow?

The answer is that you need to lead your business forward. There are several steps you can take.

Have a clear vision

All businesses exist for a purpose. Most share a common goal to make money, but each individual business has its own reason for operating.

A business owner/manager needs to have a clear vision of their company’s place in the market, its products or services and its target customers. This vision can evolve and change, but many organisations start with one or just a few products or services and build from there. A narrow focus allows the development of expertise, which can be an asset to building a reputation and a niche.

The standard structure of a small business is one person, perhaps with employees or subcontractors fulfilling operating activities.

Can you describe what your business does in one or two sentences? Is it interesting and does it engage you? Examples of company’s visions (sometimes called mission statements ) are:

‘to make natural, delicious, healthy drinks that make people live well and die old’ Innocent Ltd

‘we’re a leading UK charity enabling people to travel by foot, bike or public transport for more of the journeys we make every day’  Sustrans

‘to bring inspiration and innovation to every athlete in the world’ Nike

You can see that each one is concise, specific in nature, but vague enough to allow for room to grow, and introduce complementary products/services.  The vision is a starting point for what you are or will be striving to achieve.

Effective planning

It’s time to flesh out your ideas, be more specific about your goal(s), and come up with a method to make it happen. Planning occurs in a cycle:

1. Identify your requirements & define the scope of your activity
2. Document your plan – note your assumptions, costs, timescales, resources, potential pitfalls. It doesn’t have to be a text book, nobody else needs to see it, so use your own method.
3. Implement – put your plan into action, keep checking you’re on target, tweak, nudge, adjust whatever you need to do.
4. Monitor your progress – is your business operating efficiently? Are you spending less than is coming in? Are you getting closer to achieving your objectives? Do your activities focus on your objective, or do you get side-tracked?
5. Review – what is going well, what needs improvement, do you need to sell more, or cut costs?

Planning is not a one-off activity. When you reach the review stage, start again with a fresh look at your objectives and go back to stage 1. You’ll find that you make different decisions, with the knowledge that you’ve gained and documented.

Communication

Effective communication is the cornerstone of a successful venture. You may be a sole trader, but you don’t operate entirely without other people. Open and engaging relationships with suppliers, customers and employees will encourage loyalty and increase your chance of referrals. Always aim to be clear, consistent and approachable.

If you employee people, give each one a clear job description. Be clear about their remuneration, your expectations, and consider their aspirations too. Set objectives, and if feasible, get them involved in the planning process. People who ‘own’ their jobs derive more job satisfaction, and are more likely to remain loyal and valuable workers.

Motivation and ideas

We often assume that ‘motivation’ is something to bestow on others. Managers need to motivate their employees, dog trainers motivate their dogs, and coaches motivate athletes. If you have your own business, what motivates you?

Nobody else will do it for you. Find ways to keep your interest in your business. Do you have new ideas? Did you have ideas that you’ve not tried out? What are your competitors doing? Can you do it better, or differently?

*source: House of Commons Library, Briefing paper No. 06152

Further reading:

Businessballs – a huge online business manager’s resource library