Operating a small business is a daunting task. You may have perfected your financial systems, put the latest updates into your business plan, and improved your offerings with the newest innovations. And you have hired great people to work for your company. (Congratulations, this last effort can be the hardest task, especially when you don’t have a background in human resources and aren’t likely to hire a full-time human resource person anytime soon.) But there are five little “spiders” lurking out in the “small business wilderness” that can “bite” you if you don’t handle them correctly. Let’s review these areas individually. These five dangers are by no means the only ones that can take a toll on a small business, but just understanding these five will help to put you on the road to success with less risk.

1. Not Understanding the State and Federal Compliance Requirements

Mastering all the regulatory areas that pertain to a small business is no easy task, especially when
dealing with all facets of the employee life cycle. Even if you believe you know the guidelines for
unemployment claims, have set up workers’ compensation insurance, and even when you have the earnest intention to handle all employees by using fair and equitable treatment, there are still some statutes that can cause havoc in running your business. Employees have the law on their side – actually 28 of them in Connecticut that are specific to the state and many times override the federal regulations. Take the time to discover those laws that affect your business.

2. Not Hiring the Right People Through a Structured Interview Process

Understanding which type of employees will help you create a successful business is where it all begins. Choosing the wrong employee can cause you great consternation and you will actually spend 80% of your time on the wrong employee. Learn what makes a person successful in your different positions. What are the competencies needed to perform each job? Are the technical skills needed up to par? A great way to handle these interviews is to use behavioral-based interview questions. These are open-ended questions in which candidates need to explain the skills that they use to perform their job. Lastly, it is imperative that you understand the numerous laws that govern interviewing individuals. Never ask a question that would point to the protected areas of hiring. Questions regarding age, marital status, disability, national origin, sexual orientation, veteran status are just a few of the areas to stay away from. Stick to the essential functions of the job and you are on safe ground.

3. Handling Performance Issues and Terminations the Wrong Way

Let’s face it, every employee wants to know how they are doing on the job. And inevitably there are times when someone isn’t doing a good job for various reasons. The best way to handle performance issues is to point them out as soon as they occur. Don’t wait until you are losing sleep because an employee’s actions are driving you crazy. Point them out now. They can’t fix it if they don’t know it is broken. Eventually, if a poor attitude or unsatisfactory performance continues, and you have tried to help the employee improve, it may be time to part company. If this happens, tell the person the reason you are terminating them and you have made an irreversible decision. Don’t answer a lot of questions and open up a debate because the bottom line is that you have decided to terminate. If you involuntarily terminate an employee, you must pay the employee all the money owed to them within 24
hours of the termination. There are numerous other related requirements to learn.

4. Incorrectly Dealing with Bullying and Harassment in the Workplace

As the owner or manager of a business, it is your responsibility to take seriously any accusations from your employees against another employee, vendor, client or customer as it pertains to bullying and harassing behavior. You are obligated to investigate any unprofessional behavior in the workplace and take any corrective action that is needed against the perpetrator. You cannot retaliate against the accuser for coming to you and letting you know that the workplace environment is not conducive to doing a good job. Do not take these accusations lightly. You can get into a lot of trouble if you don’t handle this correctly. Get outside help if you need it rather than doing the wrong thing.

5. Not engaging your employees in the workplace

Motivating and coaching employees will help them to understand the expectations of how to function in your business. Engage your employees in the work processes and allow them to provide suggestions on how
something should be done. There are currently five age cohorts or generations in the workplace. (Perhaps you have heard the catchy names Great-est, Baby-boomer, Gen X, Y and Z.) Dealing with the varying attitudes and behaviors of these groups can cause a business manager indigestion. But understanding these generations and what drives them, motivates them, and engages them is paramount if you want to grow your business. Building engaged employees who are productive makes your life a lot easier. Take the simple step of listening and following-up with employees. Make them feel important.
Watch out for these itsy-bitsy spiders that can sneak up on you without much warning. A wise person once told me that if you can answer “yes” to this question, then you need to pay attention – “Would you be upset if what is happening in your business appeared on the front page of the newspaper?”

Originally Appeared in the CEDF Newsletter, 3rd Quarter 2018