Running a Small Business

Lesson 4: Subcontractors and employees

How to find good subcontractors, suppliers and employees and how to keep them. How to motivate good employees and how to reward them. Delegating, monitoring and achieving results. Coaching and disciplining.

Introduction

With any business, you have partners which help you to succeed and who will want to share in your success. These are your suppliers, your contract workers and your employees. They make it possible for you to supply your customers with the products and services they want and to reach the goals you have set for your business. It is therefore very important to identify good partners, give them feedback on their performance and to reward them when you are successful because of them.

Your relationship to your suppliers and contract workers is governed by the contracts you sign with them and by agreements you reach. As you work more closely with your partners and build up experience and trust, you'll save time by not having to formalize everything. You'll work together to be successful together - you'll realize that, what's good for one is good for the other. The best partners are those for whom this applies the most.

Employees are more complicated. Their relationship with you is essentially contractual but also legal, with all jurisdictions imposing special laws on the employer/employee relationship. This means the mutual benefits which drive your other relations and simplify them don't apply. As a result, becoming an employer is a big step and costly in terms of time, money and effort. Your small business may need to have employees but more and more don't and rely on contract workers and suppliers instead. If you decide not to become an employer, it is critical that you pay attention to the laws defining the employee relationship so that you don't, in the future, have your contract workers declared employees for tax purposes.

If you do require employees, dealing with them successfully is a major factor in the success of your small business. Besides determining and paying their salaries, you will have to lead, coach, motivate, evaluate and reward your employees appropriately and consistently. While pay is important, you will not be able to pay what large corporations pay their top employees so you will have create an atmosphere where employees will want to stay for reasons other than money. One of the challenges of a small business is to keep top performing employees.

Finally, when a partner does not perform or simply does not fit with your plans because the relationship is no longer mutually beneficial, you have to terminate the relationship. For suppliers and contract workers you may simply not place any more orders with them although you may also feel that you owe them an explanation. For employees it's more difficult because the relationship is closer and governed by a complicated legal framework. You have to make sure that the issues are always performance and mutual benefit and don't become personal.

You can't do everything, even in the smallest business and so you need partners who will help you be successful as you help them. Early on in your venture you have to decide who those partners are going to be and develop close relationships with them. While customers are the key to business success, your partners will help you achieve your goals.

1  2  3  4  5  6  7  8  9