To successfully lead a company, there’s an awful lot you need to know about management, training, employment laws and insurance. Here’s a quick guide to some key points.
It might seem absurdly obvious, but to be a good manager you need to manage yourself. That means your leadership should be an example that is more about ‘do as I do’, rather than ‘do as I say’.
If you really want to get to grips with the skills involved, it is probably best to know what bad management can do to a business. The toll is potentially horrible – losses in relation to productivity, sales, revenue, and profitability are just part of it. There is also the damage to your business’s reputation.
This is why, like it or not, it pays to learn about the art of management. If you were to ask most small business owners whether they wanted to manage or not, most of them would say ‘no’. But once you are employing people you have to give a lead and you’ll find this is what the staff want. The key word here is direction. To achieve it effectively there are three essential qualities needed: competence, enthusiasm and a good work ethic.
Follow these rules and even if you don’t feel entirely that you are a natural-born manager, you will move convincingly in the right direction: Be clear with your instructions Explain what you want to achieve Evaluate what is going on
An important part of gauging any performance is to regularly review what has been done, and here you should focus on both individual indicators and the picture as a whole. This process provides valuable insight that says more about what is going right and what is going wrong than results on paper.
Ongoing review is important regardless of the size or age of the business because you do not want to leave your inspiration and ideas to chance. Back them up by knowing what you are doing.
The subject of people management is complex. Time and experience will improve your ability to manage staff and gain results. But are you working to a script you’ve picked up in a book on management or are you a natural?
It helps to know the key areas where managers struggle and the most common stumbling blocks are listed below.
The way round it is to think straight, maintain a detached point of view and remember that a growing business requires constant dedication that can leave you so close to it that you can’t see the wood for the trees. You must step back now and again.
Key areas where managers struggle
Too stuck on one idea Lack of an updated marketing and sales plan Failure to understand the changing needs of the customer Ignoring the needs of the staff Doing too much themselves Not seeking advice
Employ the right staff
Because nearly all businesses are built around selling something to somebody, the customer is king. A business can only prosper if it performs its particular tasks effectively and efficiently.
To that end, always employ key people with proven records of success. Experience adds depth to knowledge. When interviewing and faced with candidates with the right qualifications, make your choice on the basis of the best candidate for the environment of your business.
It is often said that a business is only as good as the people who work for it and as a small business, you can be closer to your staff, suppliers and customers than larger ones. Involving your employees in the work culture from day one and keeping them up to date with the progress of the company and any developments that may take place in the near future, is all part of putting your business on the road to success.
How to manage staff
Discipline plays a huge part in good management. If your affairs are in order then you are in the position to sort out others’. To help you on the way, create your own set of golden rules.
Clear your desk and plan your activities for the next day
List your ‘time specific items’ – for example, meetings – and then write down the tasks you have to complete. Ensure that you have given yourself sufficient time to complete your list.
Tackle those difficult jobs first, when you are at your best
Look after minor jobs when you are tired. Fix deadlines for all jobs and stick to them. A task should only take the time set aside for it. Do not postpone important matters that are unpleasant. Jobs rarely get more pleasant by being postponed.
Arrange set times for jobs such as going through the mail, talking with your manager or staff, etc.
Try to fix definite times when you would not like to be disturbed, and make the system work except for genuine emergencies. Arrange your breaks at times when you cannot work effectively. Learn to say ‘no’.
Get used to asking yourself ‘Am I the right person for this job?’
If the answer is negative then it is your duty to change things round so that you are the right person. Finally make it a golden rule to finish the main job of the day before you go home.
In black and white this all seems obvious. But think about your own experiences. Odds are that you will have been managed, or managed, without such necessary disciplines in force. To help you on your way think of the times when you have got it right, work out why and then you immediately have the template for good management.
Recommended Business Courses
If you wanted proof of the need for good managers then all you need to do is to go into a bookshop and look at the self-help books on sale. There are dozens of them offering advice and seemingly fool-proof ways of getting ahead in business while inspiring those around you.
Now ask yourself this: if most management was made up of natural-born leaders, why then is there so much help available?
Go a stage further and you find there are dozens of courses available, specifically structured to sharpen your management skills. These courses take the theory of what you can learn from a textbook and put it to the test.
They range from one-day seminars to more complex and philosophically structured courses that teach a lesson and then put it to the test. Your strengths and weaknesses are soon discovered. On a more academic front, there are all sorts of highly specialised business degrees there to be studied.
Whether you want to learn about sales, management techniques, time management or good old fashioned leadership, there are courses to be had both on-line and in person. The on-line option is becoming increasingly popular simply for the ease with which students can take their lessons and for its timeless nature. The emphasis these days is on specific skills.
The rash of potential qualifications you can attain needs careful scrutiny. Is what you might achieve worth the parchment it is printed on?
One that does deliver is The Institute of Management (IM).
It is one of the leading management organisations in the UK and the largest in Europe. Through its wide-ranging management development programmes it enables a broad cross section of people to develop their skills and confidence and increase their personal effectiveness. Its students also benefit from a unique support package which includes access to the Management Information Centre, the largest management library in Europe, special discounts on books and other services and subscription to Professional Manager, the Institute’s own journal. The IM’s mission is to promote the art and science of management. It aims to:
Encourage and support the lifelong development of managers
Raise the level of competence and qualifications of management
Initiate, develop, evaluate and disseminate management thinking, tools, techniques and practices
Influence policy-makers and opinion formers on management issues
As a membership organisation, the IM is committed to meeting the development needs of managers at every level and in every industry, in order to equip them with the knowledge, resources and access to training they increasingly depend upon to further their career ambitions.
The IM also plays an important role in influencing policy-makers and opinion formers in the UK on management issues, supported by the publication of substantial research reports on a wide range of management issues, including employment trends remuneration, management tools and the work/life balance.
If that isn’t what you are looking for, there are other options – even perhaps an Open University degree in business studies or a place at somewhere like the Westminster Business School. There, the 120 permanent staff have extensive business, consultancy and research successes to their names and, along with a pool of experienced visiting lecturers, the school is able to bring a fresh approach to business education.
There are some 4,000 students – from school leavers to senior managers – working for qualifications ranging from full-time and part-time degrees through to Masters and MPhil and PhD research degrees. The college also runs professional courses, post-experience and retraining programmes with an emphasis on preparation for employment and personal development in a fast-changing world.
Other options include the London Business School, founded in 1965. It is an international business school providing postgraduate degrees in management, including MBA (Master of Business Administration) courses, as well as non-degree courses for business executives. The LBS offers more than 20 courses covering all aspects of business from managing the arts in the 21st century through to information systems management.
Your responsibility to the staff
All of this should help you to make yourself a better boss and appreciate that once you are employing people, your staff are one of the most important assets. If this all sounds a bit too grand and large scale, remember that small businesses shouldn’t take shortcuts. The same rules apply.
A good manager will always draw up a job description for staff, no matter how simple or low-level the job, because the more information put down in writing, the better the chances are of getting the right person for the right job.
Use specialist or trade publications to target your ads. If you are looking to fill a particular position advertise in the right places, as it will save you money and time. If the job is not that specialised, consider advertising in a local newspaper, which will be cheaper. Word-of-mouth can also be useful and cost-effective.
Always take up references. Before someone joins your company, ensure you get references. It can be a good idea to contact a referee direct on the phone as they are often more responsive than in a letter. Ask questions such as: ‘Would you re-employ this person?’
Get help from your friends and family. Recruitment is a costly exercise, both in terms of time and money.
Once you have staff make them feel welcome. First impressions count and the first three months of employment with a new company are important. Use incentives other than money. A competitive package need not only be about the cash – flexible working such as job-share and flexi-hours can give you the opportunity to tailor benefits more suited to the individual. Look carefully at what motivates employees.
Appraise your staff regularly. An effective appraisal system should allow for realistic but challenging objectives. There should also be interim reviews to ensure objectives have not changed and to give an opportunity to identify training and development.
Enforce strict ‘absence’ procedures. In order to deal effectively with absenteeism, staff should be very clear about the company policy. A staff handbook is an ideal way to state policies clearly. Areas such as holidays, sickness and absenteeism should be included and clearly outlined.
Create a culture of good leavers. Hold exit interviews, particularly for key staff, which will help you identify any problems going forward. The aim is to create a culture of ‘good leavers’ – this is the type of person who will flag up any problems beforehand, tell you about concerns with work, and once they’ve left, will not say negative things about the company.
One of the biggest dangers to a small business that is starting to flourish is being over-ambitious and trying to do too much. You must concentrate your resources on accomplishing two or three specific objectives within a given time period. There is only so much you can do.
And don’t let success go to your head. You still need to be frugal. Monitor and conserve cash and credit capability. Cash flow is the blood of your business and a company’s ability to continue is determined daily, not in the end of year accounts. The flow has to be constant. Keeping money in hand or readily available for both planned and unplanned events is not only prudent but also necessary in unsettled times.
Navigating successfully in a world that is changing so fast can be difficult and frightening but you have to adapt.
Take note of these golden rules and you won’t go far wrong. In fact, pin them up on your notice board in your office:
Accept change as a fact of life Commit yourself to lifelong learning Get healthy then stay healthy Look at change as an opportunity Develop and maintain a strong network and support team Keep a daily journal
Your Legal Status
There is no tried and trusted formula for success but there are many ways to improve your chances of making a go of your business.
Of course, once you have staff there are legal obligations that fall on you. Do you know about your rights as an employee? Your staff will expect a contract and/or job description that spells out what’s expected of them and it will also outline their entitlements including company pensions, holidays and grievance procedures.
And then there is the workplace. That too will need care and thought and you will need health and safety policies as well as insurance.
Health & Safety
The Environmental Health Department enforces health and safety law if your business is office based, retail or wholesale, warehousing, hotel and catering, sports or leisure (non-Council) or residential accommodation. It excludes nursing homes, places of worship, pre-school childcare and mobile vending.
All other types of business fall under the remit of the Health & Safety Executive. This places an onus on the employer to report accidents and make provisions for their staff.
You must report any accident which causes an employee to be killed or suffer a major injury, defined as a fractured bone (other than to the digits), amputation, dislocation, loss of sight or burns.
A report must be filed also if a member of the public is killed or has to be taken to hospital; if an employee is away from work for three days or more; if a doctor notifies you that your employee suffers from a reportable work-related disease.
All accidents can now be reported to the Incident Contact Centre based at Caerphilly. Reports can be filed by phone, fax, or via the Internet (www.riddor.gov.uk) or by post.
If you employ staff you must either display a Health and Safety Law Poster (below) or give a Health and Safety Law leaflet to each employee. These are available from Kirklees Environmental Services Regulation Advice Team, phone 01484 226472, HSE Books or any HMSO stationers.
Other considerations that you need to make include regulating the temperature of the workplace. The Workplace (Health, Safety and Welfare) Regulations 1992 requires that during working hours these temperatures inside buildings shall be ‘reasonable’ – above 16 degrees.
The workplace needs to be adequately ventilated. It will depend on the workplace whether windows will be sufficient or mechanical ventilation will need to be provided.
As an employer you are required to provide an adequate supply of wholesome drinking water. This can be drinking water from the tap, it doesn’t have to be a drinking fountain.
More advice can be found at www.hse.gov.uk
There is insurance you must have, and there is insurance you should have if you are going to guard your business against potential disaster.
With all the other expenses involved in setting up a business, it’s tempting to have the minimum insurance required by law – insurance against risks to third parties. However, it makes sense to get adequate insurance to avoid the risk of losing it all.
Business insurance is usually divided into three fields:
Liabilities Property and buildings Business assets and equipment (contents cover)
A minimum requirement for your own peace of mind is Public Liability Insurance. This protects you from damaging other people and their property, whether you are visiting them at their home or place of work, or they are visiting you.
For most businesses, Public Liability Insurance is relatively inexpensive – around £100 to £150. However you may be better discussing your particular situation with your local bank or insurance broker.
Alternatively, go direct with your business insurance needs to Royal Sun Alliance business insurance, Zurich insurance or Norwich Union insurance. These ‘big three’ are experts in the market and can help you on your way.
Another policy worth considering is ‘Keyman’ insurance. This is a good idea if your business relies on you (or any key person) and business would suffer if they were to be unable to work.
Insurance for tools of the trade may be necessary for some professions and also a general business insurance with a ‘loss of profits’ cover in case, for instance, your office or workshop were to suffer damage, or your stock were stolen, and you were unable to trade until it was repaired or replaced.
If you employ staff, even on a part time – or voluntary basis – you must have Employers Liability Insurance to protect them, and you, from any losses incurred through accident.
You may require professional indemnity insurance if you are in the business of giving people advice. This covers many professionals such as doctors, solicitors, financial advisors, business consultants, architects, etc. It can be very expensive, so the first place to start looking for such cover is (if you belong to one) from your trade association or institute, since they often offer subsidised or specially negotiated rates. This type of cover protects you in the event that your advice is acted upon and it proves to be wrong or misconstrued.
If you intend to use your car/van for business, make sure your vehicle insurance covers you for business use. Check with your insurance company what you need.
It is important that we explode some myths. House insurance will not always cover you if you work from home and even if you operate from a small office at home it is better to check with your insurance company.
Get this wrong and in the worst cases you may end up not being paid a penny if your business computer bursts into flames and burns the house down. To be on the safe side, tell your insurers (in writing) and pay any additional premium requested. The fact is that most homeowner policies (for fire and theft) don’t cover things such as computers, tools, and samples.
Of course like all money products – loans, mortgages etc – insurance is a competitive market. Zurich offers business insurance in four categories, ranging from the small company through to the giant corporation. Norwich Union can supply immediate cover on the Internet as can Royal Sun Alliance.
There is also the other side to business insurance – the cover that is of benefit to your staff, like health, dental, life, or disability insurance.
Having emphasised the importance of having the right cover, let us consider ways you can help yourself to keep the premiums down. An insurance company bases these premiums on the risks involved. To do this, they evaluate the situation to determine the risks, or potential for losses.
The steps you take today to lower your risks can not only help safeguard your business but may make you eligible for lower insurance rates.
It helps, in terms of security and fire risks if you have adequate lighting throughout your business premises and you keep electrical wiring, stairways, carpeting, flooring, elevators and escalators in good repair. Install a sprinkler system, smoke and fire alarms and adequate security devices.
Keep only a small amount of cash in the cash register, keep good records of inventory, accounts receivable and equipment purchases and consider keeping a second set of records off-site – maybe with your accountant.
In terms of the staff, make sure your employees have good driving records, that they understand the health and safety regulations. Their involvement in drawing up the code for safety practices will help keep them aware of it and what is required of them.