SBON
Small Business Owner Network
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South Africa
 

Your online resource for small business issues in South Africa

"YES, YOU CAN HAVE YOUR OWN BUSINESS"

Staff and management

Can you go for it alone?

This really depends on the nature of your business. We're firm believers that unless you have sufficient financial backing and for most of us this is not always the case, it is better to keep your overhead costs as low as possible during your first year of operations. Salaries and wages are always a significant monthly cost to any business. In addition your staff need to be paid irrespective of whether you've had a good month or not, and there is a certain amount of administration involved. A list of issues you need to consider before deciding to hire someone would include:

• Sufficient cash flow.
• Hiring is a long term contract.
• Maternity / paternity / sick and annual leave.
• Admin such as pay slips, paye, uif.
• Possible conflict: labour relations, disciplinary procedures or internal fraud.

Of course good staff can have several advantages:

• Someone who is available to customers throughout office hours.
• Free up your time by doing repetitive or non core work.
• Help increase company output.
• They bring in their expertise to add value to your business.

For small start ups we still advise that you keep employees to as few as possible (preferably nil) until you can see that your business is generating a positive cash flow.

Staff and management

At some stage you may need some help.

When you reach the stage that you feel you need help with the running of your business we recommend that you first consider the issues mentioned in the above section. If you still decide on hiring, do it properly:

• Research and interview your prospects thoroughly. They will be put in positions of trust and will influence how customers view your business. Good employees are an asset, bad ones are liabilities.
• Draw up an employment contract stating exactly what it is you expect from them and when and how much they get paid. This will help reduce disputes later if it is reduced to writing.
• Do it legally. Hire locals or foreigners who are here with permits, do not hire illegals. They can be deported at any time (just as you get that big order), they have a poorer understanding of our business culture (when dealing with customers), they need to return to their families on occasion (often for extended periods as they struggle to come back into South Africa) and you can get into trouble with the law. None of these justify the slightly lower wages you may be able to pay.
• Train your staff properly. You can't expect them to do a good job if they haven't been given the skills to do so. This can be as simple as spending a few days with them showing them how do work the machine, do your accounts or the manner in which they should answer the phone and greet clients.
• Be polite and encouraging. If you are rude and unpleasant to work for they will lose motivation to do a good job. Being the boss does not mean you can become a (insert your choice of derogatory term here).

Staff and management

More people to look after.

The moment you are employing more than 20 staff, you start gaining additional responsibilities. Do you have an employment equity plan? Shop stewards for the union? What are your affirmative action policies? To retain top quality staff you will need to provide benefits such as medical aids, retirement plans and life assurance policies. There are now many more conflicts, issues and queries from your pool of staff.

The result - you need to employ someone or sub contract the task of human resources management which is a fancy term for managing your staff administration. It is unlikely that you now have the time or expertise to handle this task. Rather concentrate on what you do best and what brings the cash in for your business. Do not neglect your staff as you are still the boss and you still need to monitor their performance and manage the best performance out of them, but don't waste time doing the monthly admin. Besides its now getting complex and an expert could save you many problems.