Avoid People Problems in Business

Working with emerging entrepreneurs, especially those who apply knowledge imparted and advice proffered in a systematic and structured manner, can be an uplifting experience.

To an extent it even puts a spring in one’s step.

There is a downside too, such as when cautioning against hasty decisions that are bound to impede operations go unheeded.

This can be rather discouraging when supporting entrepreneurs in their quest to create wealth and jobs.

It is mostly people choices, such as staffing and partnerships, that spell trouble for entrepreneurs.

As for staffing, during the start-up phase entrepreneurs tend to employ family rather than people with the competencies, skills and the right work attitude.

Nearly always newcomers to business swiftly discover the folly of such an employee recruitment strategy, as the relative employed has the false notion that it is also their enterprise.

Dealing decisively with poor timekeeping, low productivity and dishonesty then becomes a challenge with the risk of drawing the family into the matter, rather than the problem remaining a business issue to be dealt with at the firm.

Smart entrepreneurs quickly see that adopting a ‘Mother Teresa’ staffing approach causes trouble.

They see it is wiser to pay relatives who have fallen on hard times an allowance to stay far away from the business, rather than employing them with the risk of causing havoc at the firm and negatively influencing other staff members.

Another potential people-centred problem faced by entrepreneurs is business partnership selection.

Business partnerships are enticing as it allows shared responsibility in terms of capital raising, growth funding, and workload sharing, but reality could be another story.

Problems usually arise over disagreements on management or control, equity or ownership, profit and workload sharing, and time off.

Choosing partners who are people with shared values, vision and priorities for life and in business is important.

Unfortunately agreeing and documenting who does what, when and where upfront is often overlooked.

This is, however, crucial to forging a business partnership, rather than having one based on trust, hope and a handshake.

Clearly defined and documented roles and responsibilities are often overlooked, and the absence of a written agreement then exacerbates matters when misunderstandings arise.

Problems often occur when ownership passes from one generation to the next and there is no succession plan in place.

They even escalate to the extent that they get out of control.

There are many examples showing this could result in the demise of many a once thriving business.

Business closure scenarios are prevalent in family-owned enterprises, especially when there is no succession planning, leadership grooming, and document ownership equity split clarity.

This could become fertile ground for sibling rivalry.

I have experienced an abundance of partnership challenges over the years with others.

My wife, Thea, has been a dream business partner contributing handsomely over more than three decades though.

The same applies to my Namibian business partner, Claudine.

It has been a pleasure having her as a business partner.

However, this does not distract from the fact that staffing and business partnerships are potential problems to be handled with caution, and it starts with making the right choices.

• Reach Danny Meyer at danny@smecompete.com