Small businesses are big business in Australia, with the vast majority of all companies coming into this category. While they may not have the resources and manpower of larger organisations when optimising efficiency, their small size and all-hands-on-deck capacity gives them a competitive advantage when comes to their most important asset: human capital. Tony Wilson explains.
Small businesses are on the rise according to the Council of Small Business of Australia. Since June 2003, the number of small businesses has grown by 37.4 percent. There are approximately 1.93 million active small businesses in Australia — that represent 96 percent of all businesses across the nation.
So the question is: how do these 1.93 million businesses maximise their efficiency and earnings?
I’ve always said, small businesses’ ability to manage people and create the environment to succeed is their greatest asset. Small businesses face many challenges, but they have a competitive advantage when it comes to human capital. With small businesses comprising less than 20 staff, each employee can easily see how their work impacts on others and leads to greater outcomes for all. This encourages a higher level of staff engagement because people understand how their contribution affects the bigger picture.
Through a solid company vision, small business owners can help their staff to strive toward a common goal. This is something large companies do well in theory, but tend to lose between the multiple layers of management.
An important point for managers is to make sure your vision and goals are visible, clear, memorable and measurable and that people are always connected to them through constant communication, measurement, review and development. A company can improve efficiency by encouraging employees to move in a common direction, getting people on the same page and showing them how their work contributes to the team. It is also imperative to involve people in decision making to create a culture of involvement, open communication and team-based problem solving.
Many small businesses think they are too small to worry about building the right culture: they think it will happen naturally without any intervention. In some respects they are right, culture will just ‘happen’, but this does not necessarily result in a desirable one. I recommend that every small business owner should actively assess the current culture, identify the desired culture, the behaviours that reflect this and the impact you want it to have on staff, clients and productivity. By measuring these things, you will be able to understand if the culture that you have is truly the one you want and, if not, take a proactive stance and be the change you wish to see.
The most important points for small businesses to take on board are the importance of managing people, creating a company vision, involving staff in planning and fostering the correct culture for your company. By putting each of these into practice, small businesses can make a big impact on their staff, their industry and their community.
Tony Wilson is a performance coach, executive mentor, corporate speaker, providing workshops to ensure companies reach their highest potential, while empowering them to find their competitive edge. For more information please see www.teamcorpaustralia.com.au or www.tony-wilson.com.au