Do you want your business to be successful? Do you have great people but are lacking the appropriate HR systems in getting there? Recently we had the opportunity to chat with Dan Jones from TeamFinder, and more specifically to discuss, “Successful HR Systems for your Business”. We discussed all things HR services as well as what provides value and allows for your business to grow sustainably when it comes to your people assets.
#1 – The top three reasons why most small to medium sized businesses fail
Most small to medium size businesses lack an in-depth feasibility study in their business planning. Often not enough research across all facets is conducted and this may directly impact the success of your business.
Reason #1 – Finances
More often than not, small business owners don’t know the amount of money that it takes to start up and run a successful business. The majority of which don’t work with an accountant to help them with that process. Without realising it, this results in a “head in the sand” approach which stifles businesses turning over the profit that they are indeed worth.
Reason #2 – Marketing
One of the biggest downfalls small to medium sized businesses can have, is their lack of budgeting in respect to marketing, and more significantly their lack of research done with their target market. If you don’t know your target market how can you be confident you are using the right tone of voice, words and platforms to reach your audience?
Reason #3 – Systems
The most critical reason causing failure is that 96% of small to medium sized businesses don’t have robust systems and processes in place. Everything is kept in their heads, be it the business owners or staff which means that if something happens to any of them, it has a HUGE impact!
A simple solution to avoiding the above failures is to implement tailored systems and processes for your business. Recently we assisted a hairdressing salon increase their overall profit by 20% purely by looking in detail at their processes. Upon going through each aspect of how things were run in a typical day, and looking at how their staff worked, it became apparent that staff were using different amounts of product. In addition to this, not all items were being cashed up when they took the customers to the register. These small things added up and when highlighted and fixed, achieved a 20% increase in overall profit, which is huge for a small to medium sized business. What would you do with a 20% increase in profit?
Sadly, some of the businesses we work with are not as enthusiastic to implement all the policies and procedures we suggest. Although we strive to implement foundational systems and processes that your business ought to implement in order to assist you in being successful, we choose to never push a policy onto your business. Another salon which we worked with didn’t feel they needed to put in place all the processes that we suggested. This approach definitely hurt them when approximately 6 months later a staff member left unexpectedly, having poached every single one of the salon’s clients. The salon incurred a major loss, but fortunately called us to help put those systems and processes in place, after realising the importance of them.
#2 – What does a comprehensive HR System look like?
Here at Team Accelerate, we believe in the 3 P’s (Product, People, Process) which your business relies on all 3 equally. A comprehensive HR system helps support your people and is everything from hiring and onboarding right through to training for all of your company’s policies and procedures. This practically sets your staff up for success right from the onset because they not only understand the day-to-day tasks involved in their own role, but they also get to understand the big picture of where you intend your business to go. HR systems and processes also help in valuing staff success. Many companies lack the understanding that a staff member’s success has a direct impact on that staff member’s immediate supervisor, which in turn affects the overall success of the business.
Although all businesses have the same foundational HR systems, their requirements may differ depending on the type of business. Each business is unique and we take the time to get to know the differing aspects of each business we work with. The unique nature of your individual business ensures tailored processes are created and implemented. Take for example a coffee shop owner and that of a hairdresser, the content that goes into the system needs to have the right information regarding the staff and what they’re going to be dealing with on a daily basis.
#3 – Why should you value a HR System in your Business?
The biggest reason a company should value HR Systems is because staff are assets and a system supports this asset. Most businesses see their assets as being their product or service, but without their staff to sell their product or service, they don’t have a business. Ask yourself this question, would a coffee shop invest in subpar coffee beans, or worse, would they neglect coffee beans altogether? No of course not, and that is exactly how it should be with your staff members. They are key assets in helping your business succeed.
When we help you implement the right systems for your business, we guide you in understanding the importance of all 3 P’s (Product, People Process), not just the product. We outline that finding the right people for your business is crucial in order for them to fit within your culture and where you’re trying to take your business. Think of a Venn diagram, in order for your business to succeed and reach its full potential, you want it to sit right in the middle of the three circles overlapping – This is your “Sweet Spot”. If you don’t have those three P’s functioning at the same level, then your sweet spot is not going to be very big. If you’ve got a fantastic team and you don’t have the processes to support that, then your team won’t be as successful as they possibly can be. Therefore your product won’t be as successful as it can be, and vice versa in terms that if you have fantastic processes in place, but your team isn’t great, that weakness will be emphasized.
#4 – What will it cost you not to have a HR System in your Business
If you believe your business doesn’t have a budget for a HR system, then we simply ask you about the opportunity cost. What is the opportunity cost of not getting that HR system? Is it losing your customer base like that hair salon we spoke about earlier? Or is it the cost of you trying to make a staff member redundant? If you do opt to budget for the HR system and implement all of the policies and procedures that cost will pay for itself when you do need to lay off a staff member, and in real terms it is of no cost to you. The question is what’s the cost of not implementing a HR system as opposed to the cost of implementing it. The cost of implementation is minimal as opposed to the cost of not having that structure in place when things go pear shaped.
In going back to our coffee shop example, most of us make coffee. You love coffee. We love coffee. We all have the ability to make coffee at home but we will never make it as well as our favourite cafe would. It’s the same for our HR systems and processes. Every business has the ability to implement basic HR systems and processes, but can you do it as well as the professional? Can you do it as well as we can? We’re trained professionals, let us help you.