How to Manage People in a Micro Business

Keeping It Personal

How to Manage People in a Micro Business - Keeping it Personal

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Micro businesses can still present major challenges.

What's the biggest business in America? If you answered "Wal-Mart®," you would be technically correct, according to this year's Fortune 500 list. The international retail giant has an astonishing 1.3 million employees in the U.S., and more than two million worldwide.

But, arguably, the dominant private sector employer in the U.S. business landscape – as opposed to the biggest single organization – is the humble micro business.

So, what is a micro business? The U.S. Department of Labor's Bureau of Labor Statistics defines it as an organization with fewer than 10 employees. It can be anything from a well-established, sole-trader neighborhood florist, to an energetic software start-up, whose small team of founders dream of becoming the next Internet billionaires.

And there are an awful lot of them! The U.S. Small Business Administration (SBA) reports that, in 2013, America's 3.7 million micro businesses represented more than 75 percent of all private sector employers, and accounted for nearly 11 percent of all private sector jobs.

In this article, we'll look at the challenges and opportunities presented by working in a micro business, and how to manage a very small, close-knit team – whether you are in your first management role, or you are an experienced team leader moving into a new environment.

Good Things Come in Small Packages

There are a number of advantages and opportunities that come with managing in a micro business.

  • Responsibility. Working for a small organization means you will likely take on various roles. There simply aren't going to be enough people to allow you to specialize.
  • All in it together. People working in micro businesses generally enjoy a high sense of "ownership," and that can be particularly powerful if you are Managing in a Family Business. Often, the owners have a strong emotional and financial commitment to the company, and they are prepared to "go the extra mile" to make it a success.
  • Faster decision making. Without a complicated hierarchy, decision making can be extremely rapid. It could even be a case of turning to the owner, asking, "Why don't we do this?" and receiving a quick yes or no.

When Micro Can Get Messy

There are pressures in leading a small team within a very small organization. In fact, most of the benefits we've mentioned have their flip side.

  • Lack of reward or recognition. Companies with few or no management layers are often called "flat" organizations. That means there is little opportunity for promotion, because there are no roles to be promoted to! You can find out how to stay motivated in such environments with our article, Career Progression in a Flat Organization. While you may enjoy the responsibility of taking on numerous roles, the size of the company means pay and benefits are unlikely to match those of bigger ones.
  • Lack of support teams. In a micro business it is very unlikely that you will be able to call on the services of, for example, a human resources, legal or administrative team. This could mean that you spend more of your time on administrative tasks.
  • Owner interference. We've seen the advantages of working closely with the owner, but there can be difficulties. You might struggle to operate independently, particularly if he has built up the company from scratch. He could find it very hard to delegate fully or to let go of the reins. (You can learn how to build an effective working relationship with our article, Managing Your Boss.)

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Managing in a Micro Business

The skills you need to manage a small team in a micro business are similar to those required to manage a small team in a larger organization. These include:

  • Understand your own role. Despite the "all hands to the pump" way of working in a small team, you still need to be clear about your own role and responsibilities. Asking the owner to write a job description for you can help.
  • Define roles within your team. Your people will be more productive and effective if they understand their roles and responsibilities. Our article on Belbin's Team Roles has more on this and can help you build a balanced team. Good communication skills are key to making sure that your team members know what is expected of them. For more information on how to communicate clearly and concisely, see our article on The 7Cs of Communication.
  • Don't shy away from making tough decisions. You'll likely build close bonds and friendships with your team members in a micro business, and that can make it tough to be dispassionate about their performance. But you are a manager and should still hold appraisals, give feedback, and be always setting goals. If the business is your family business, then this article will help you navigate the tricky waters of managing close family or relatives.
  • Be aware of stress and workload. If your micro business is a start-up, the owner may well be working all hours, and could expect the same of you and your team. You could all share that commitment to success, but beware that it doesn't lead to stress or burnout.
  • Recognize new skills may be needed. Hopefully, you will see your people thrive and the business grow. You may even think it's time to expand your team. A growing business will need extra help and you might want to bring in specialists to take responsibility for some areas. Our article, When to Create a New Role, can help you decide when the time is right to do this.

    When new people join your team, you can use your experience to coach and nurture them. A good coach can really develop people's skills and abilities, and boost their performance.

  • Managing Yourself. It's vital to keep developing your own skills and perhaps specialize as the company grows. Businesses often expand by bringing in skilled specialists to do particular jobs. If you're early into a growing company, this can leave you as a relatively unskilled "jack of all trades" who is of increasingly little value to the business.

    As the company expands, make sure that you continue to develop the skills that give you a valuable and valued place in it. You can maintain your importance to the business by adopting a number of strategies. For example, remain tech-savvy and keep abreast of new developments, improve your knowledge in competencies such as leadership and communication, and build a network of contacts. You can find more on these options in our article, Future Proof Your Career.

Key Points

Managing in a micro organization can offer opportunities to take on responsibility early and advance quickly.

Strong people management skills will be vital in what will likely be an intense, close-knit environment, and one where you may not to be able to rely on support teams, such as HR or administration.

It's important to understand your role, and make sure your team members fully understand theirs. And in a small-team environment, it's important that you don't duck difficult performance or operational conversations. Learning good communication and feedback skills can help you with that.

This site teaches you the skills you need for a happy and successful career; and this is just one of many tools and resources that you'll find here at Mind Tools. Subscribe to our free newsletter, or join the Mind Tools Club and really supercharge your career!

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