If you own a small business, you know that each day brings a new set of priorities and challenges – it’s a constant shift based on the needs of the moment. At the start of a week, you might be introducing a new production process. In the latter half, you might be hiring a new employee. And on all days, you’re doing your best to keep your operation efficient, productive, and successful.
If that shifting of focus sounds familiar, you are far from alone. Most small business owners report a similar experience. It’s one ADP itself shared, when 75 years ago, the global technology company began as a manual payroll processing business above an ice cream shop. Though small business owners’ priorities may change as needs demand, their pursuit remains constant: growth. In fact, according to a new ADP Market Pulse Study, one-third of small businesses surveyed cited growing their business as a top challenge they’re currently facing. With small businesses a critical piece of the economy, that growth is really a universal goal, and the drivers are worth examining deeper.
Small businesses are focusing their current attention on three key areas to scale for business growth: their people, their ability to navigate changes in the economy, and their ability to keep pace with emerging technology. These three areas of focus are interconnected, so it’s important to look at them one at a time—while also considering how each affects the other.
Recruiting and Developing Talent
Small businesses often don’t have the resources of a dedicated HR or talent department to recruit new candidates. It’s often the owner or a key employee that seeks out new talent—while also handling daily responsibilities.
With that in mind, you want to be sure your efforts lead to a successful outcome. That is, you want the top candidate to take the job and thrive. Believe it or not, small businesses can have an advantage in this regard. They can get creative in attracting strong talent by emphasizing their company’s culture, work-life balance, and, if possible, unique benefits.
To meet talent where they are, data is key. Small business owners can leverage data to respond to their employees’ unique needs and tailor their offerings. For instance, do their benefit offerings match the employee populations they have, or those they’re looking to reach? What’s most important to their people? Are they looking for financial wellness offerings, or perhaps employee assistance programs and mental wellness programs? Understanding your workforce and their needs can help you create a culture and full compensation package that’s enticing. Think about lifestyle perks as well. Many times, small businesses can work with partners to extend benefits and lifestyle perks they might not have access to in order to compete for strong talent.
Mentoring and development opportunities are important to consider, too. In a small business, the typical career path often looks much different than the ladder many envision. Consider what opportunities exist for stretch opportunities and skills development. According to ADP’s Market Pulse Study, 44 percent of small businesses surveyed are focusing on training and skills development as a top workforce priority right now. This includes upskilling and reskilling to ensure their people are equipped to navigate new demands and technologies. Consider hiring freelance employees too, from a skills-based approach. This can help make your business scalable by managing talent demands alongside business demands.
Focusing on the growth of your employees is foundational to fostering the growth of your business, no matter its size.
Adapting to the Business Environment
Small businesses are often the first to feel the winds of economic change. They may see it in rising wages, inflation, even in the costs of their own goods and services. As a small business owner, building a financial cushion is important in being able to scale for growth, including paying competitive wages to attract talent and navigating shifts in the economy.
There’s no one approach to maintaining a positive cash flow, but it’s worth confirming that you’re taking advantage of all available tax credits. There are many tax credit programs available that small businesses might not be aware of or have guidance on how to leverage. For example, many business owners don’t realize that their operation might qualify for the federal research and development (R&D) tax credit. This credit applies to a broad range of activities, such as developing new or improved products, software, processes, techniques, formulas and inventions, and can significantly reduce your tax liability. The Work Opportunity Tax Credit (WOTC) program is another, which incentivizes companies to hire veterans and other individuals who have traditionally faced obstacles to employment.
But these programs are not the only credits available. ADP’s experts leverage a proprietary database of 3,000+ tax credits and incentive programs to maximize savings. A number of states and cities have other mechanisms designed to stimulate growth in small businesses. Treat your accountant as an advisor; ask if there are any untapped opportunities in your industry or market to be sure you’re covering your bases.
Another way to enhance cash flow is to leverage new technologies to help drive efficiencies. Many small businesses are focused on reducing their tech stack and looking for opportunities to consolidate the tools they provide their employees. This effort is beneficial from an employee experience perspective as well, helping to modernize the tools your people interact with in their roles. New, AI-driven tools can streamline repetitive responsibilities, thus freeing your staff to concentrate on other business objectives that can help drive growth.
Keeping Pace with Technology
Technology is ever-present and ever-changing. Many small businesses, even those that aren’t in tech-related industries, have it on their list of priorities with the goal of driving efficiency and productivity. With smaller teams and owners who are often wearing multiple hats, the question becomes, “how can technology free up my time?”
One answer is automation, which goes hand-in-hand with adopting AI-driven tools. In the HR space, technology can help create efficiencies like streamlining HR tasks, validating payroll information, helping to prevent errors from manual data entry and improving operations. For instance, time and attendance solutions can help small business owners proactively manage overtime through timely insights provided in the flow of work, ultimately helping to drive efficiency and optimize resources.
Another answer is through data. Virtually every company today, including small businesses, has powerful data into their workforce and business operations that can better inform their next steps forward. The obstacle often is uncovering that data during the pivotal moments where it can better guide business decisions.
Simply put, data can remove the guesswork. For example, the right data can help you determine how many freelancers you’ll need to meet an upcoming seasonal spike in activity. When compared against strong national and global benchmarks, you can also analyze compensation, turnover, and candidate profiles to understand how competitive you are in the talent marketplace.
The adoption of new tech can often seem like another hat to wear, but the value can outweigh any learning curves. Partnering with an expert or a managed service provider can alleviate the challenge of implementing and maintaining these technologies, helping small business owners stay focused on strategy and business growth.
The Future of Work for Small Business
In today’s business climate, small businesses face any number of challenges. But innately, they have a strong advantage. They’re nimble. Many started with passion for a solution they brought to the market, growing that passion into a business operation. They’re comfortable in agile mode – it’s second nature. As small businesses navigate the future of work, lean into that ability to be flexible—in attracting talent with unique benefits, in finding opportunities to maintain cash flow, and in adopting the latest technologies. By exercising that flexibility, you can uncover new roads toward growth and be well poised to take them.
Jim Sperduto is the President, Small Business Services, of ADP.
Small business owner by Julia Zavalishina/Shutterstock