He aha te mea nui o te ao
What is the most important thing in the world?
He tangata, he tangata, he tangata
It is the people, it is the people, it is the people
I speak only English. However, this Te Reo proverb reminds all of us that people rather than dollars are the lifeblood of the world - including business. If you look at the fins of our rocket business model, you'll see that people is one. Sadly most people focus on marketing (assuming their product is sound), but the best marketing in the world is nothing if people don't ensure promises aren't empty.
I'm tempted to say people are the most important detail, but that's not true either - there is no single area that will guarantee success. No matter how committed and talented your people are, they can't make up for poor products (or services) bought poorly so you never have enough of the right product. And the same applies to the other "fins".
What's more, how does that apply to a sole trader who has no staff? As their business grows, how do they best integrate a second person? And the next? Employing staff isn't the only source of people. This is a huge topic and this short introduction will not cover any of the details in depth. It merely lays the foundation for future articles.
Back to our sole trader - how does this apply to them? One thing that has become clear during the pandemic is just how hard it can be to be alone in business. But even a sole trader has people around them who have an interest in the success of their business. This can include life partners and other family members, friends, suppliers, customers, accountants, lawyers, bankers, community groups, industry groups and competitors.
Some will have vested interests. Others will have limited relevant experience. Others will have limited time. Others have limited range. Others will have a cost. None will do the whole job with your enthusiasm and commitment. But all can provide advice and opinions - it's a question of selecting the right advice for you. You need to be aware of biases and limitations, just as you need to be aware of your own. You also need to be aware that advice that seems unimportant or even unhelpful at one stage of your journey can turn out to be very useful at a different stage.
There's one advisor group who can bring valuable benefits consistently over time - a business advisor. A business advisor can also bring a narrow view or preconceived ideas and can waste a vast amount of your time, effort and money. Professionals such as lawyers and accountants have relatively narrow fields of expertise. A family lawyer may not have much experience with business law. And even those who are experienced in business may not have much experience with tax. Not only that but personality can play a big role. With other advisors, that's not so important - although a bad relationship with a long-term advisor is never helpful. If you use a business advisor, ensure you have clear goals and measures to evaluate the value you're getting.
The really big step comes when a sole trader involves someone else in their business, either as an employee or co-owner. Sometimes this is done half-way - using a contractor, which introduces yet more issues. Issues with partnerships and contractors will be left for another time. Here we'll focus on hiring someone, but for the sake of brevity, we'll ignore the actual employment procedure. Suffice to say making sure you don't end up with the wrong person is another long procedure.
We naturally like people like ourselves. But as Michael Gerber showed, we can gain much more from people who are not like us. When an entrepreneur seeks a second pair of hands, they are probably better off looking for a manager and vice versa. Introducing people unlike us risks an increased likelihood of friction, but with planning and management, this can be channelled into a productive relationship. Recognising the strengths and weaknesses of each person (especially ourselves) is essential.
When a new person joins your team, having a well-thought-out induction process will have better results than just letting them flounder without a clear vision. They should of course also be given clear HR policies and procedures. Again this area will be looked at in detail later.
As your business grows, your team is the most vital part of your business. A good team can build any business - a bad team can destroy any business. Put another way, a good team frees your time from some aspects of the business - a bad team means if you want it done right you'll end up doing it all yourself.
Beyond the daily routine of the business, effective team participation in decision-making builds their contribution and value enormously. That can be destroyed by "micro-management". If your team comes up with a solution different from yours, as long as it still achieves the same end, then living with it being done differently from the way you'd have done it is a small price to pay for the health of the team.
Building a winning team is the difference between prospering and floundering. Society emphasises individual accomplishment so it's not easy to manage the varying strengths of team members. Harnessing conflicting personalities, viewpoints and goals into an effective team culture is something you must work at every single day.
Key is getting buy-in to the business vision. If you have a great team but no clear vision, developing an effective vision as a team exercise will give you more eyes on the task and also provide a team-building opportunity. Setting parameters around the exercise will ensure you don't end up with something with which you are uncomfortable.
Whatever you do, other people (whether employed or not) are essential to the success of your business. This has just been an appetiser - we'll look at various aspects of this in future articles.