For all the challenges that come with starting a business, scaling one is often even harder. That’s when you’ve established your business, have regular customers and clients, and have something to lose if you can’t sustain and scale it.
To learn more about the common challenges small business owners face when they’re ready to expand, I talked to Heather Sperduto, the VP of sales operations-accountant channel at ADP. Sperduto is also ADP’s small business expert and shares her insights into the key strategies small businesses can adopt to effectively manage growth and expansion.
Rieva Lesonsky: Many business owners think that once they get beyond the crucial startup stage, growth will come more easily. But that’s not true. So what are the common challenges small business owners face when trying to scale their businesses?
Heather Sperduto: [Hiring] talented employees and keeping them on board is top-of-mind for today’s business owners. This can be challenging, especially for businesses looking to scale and expand. And while this can be an exciting time in the life cycle of a business, ensuring that the processes are in place from [when you start] seeking qualified candidates through the onboarding procedures and beyond is critical.
This sets the stage for an employee experience that helps ignite their vested interest in the company they work for, making them part of the culture, and engaged in their work experience.
As small businesses expand, there is also a heightened exposure to risk based on the changing landscape of compliance. Staying current on regulations at the federal, state, and local jurisdiction is a necessity. Three HR compliance trends to gain insight into include the new leave requirements that have been put in place in 13 states; the increased pay requirements, with 20 states and 40 local jurisdictions increasing minimum wage rates; and pay transparency enacted in 20 states.
Lesonsky: What are some key strategies small businesses can adopt to effectively manage growth and expansion?
Sperduto: Small businesses can start by formalizing company policies. This level of consistency helps promote awareness as each new employee walks through the door and interacts with their peers and leaders, so all are in sync with expectations, standards, and accountability.
We live and work in an environment where change is all around us. A willingness to revisit processes and best practices to adapt and evolve to today’s environment often can put businesses in a place to thrive and pivot from that expansion stage to success. Successful business owners are rarely complacent. They tend to seek out the best angles to put their businesses in a positive, winning position.
A modern approach to your workplace activity may look very different than it did several years—or even several months ago. Everything from how candidates view your brand in the marketplace to how a position is perceived in a job description can have candidates heading your way or discourage them. Business owners should think about how they show up in the marketplace, both internally and externally, for their staff and their customers.
Lesonsky: How can small businesses determine the right time to scale and expand their operations?
Sperduto: Having a view into the data and analytics can help a business owner make informed decisions to determine the next moves for their organization. And having the right tools and resources to make this data readily available and accessible is key. As businesses continue to navigate labor market changes in terms of inflation and wages, pay and benefits strategies are more important than ever. This type of timely intel can help employers benchmark their compensation structures to stay competitive and appealing. Look for HCM (human capital management) solutions that can provide that comprehensive view.
Evaluating your current state while having the foresight into what comes next may require some expertise from trusted advisors, so seeking additional guidance from partners such as accountants and lawyers may help business owners make sense of the data to help fuel growth.
Lesonsky: As small businesses scale, it’s not uncommon to find some employees who’ve been with them a long time aren’t as equipped to do their jobs in the growing company. What can be done about that?
Sperduto: When a company is in growth mode, clear communication is vital to foster change management. This allows employees and leaders to connect and collaborate in an environment that may be fast-moving and dynamic.
Regular check-ins are necessary to drive performance through every phase of an employee’s journey so they are not left behind. This gives an employer the opportunity to evaluate ways to reskill employees should there be gaps in their capabilities. Investing in training and development programs to get the best out of your people can yield incremental lift in productivity. Mentoring, and in some cases reverse mentoring, fosters a culture of shared expertise. The employee-to-employer relationship should be mutually beneficial so both parties are in a position to thrive.
Lesonsky: ADP generally deals with bigger businesses. But what about smaller companies? How do you scale 10 employees to 20? That still makes you a small business—but you doubled in size. Any advice for those companies?
Sperduto: ADP serves more than one million clients, and over 800,000 are small businesses. The best practices that are put in place when you hire your very first employee should be scalable. Speed to hire, recruiting with efficiency, and onboarding with excellence while also supporting your leaders to sustain growth all can lead to employee engagement at all levels.
Adopting new technologies can help expedite many of these. For example, as additional employees are added, scheduling tools can help manage time. The automation of time and attendance can go beyond just tracking, but also help to spot trends and gaps in coverage so businesses can pivot accordingly.
As businesses experience growth, it’s almost inevitable that questions will arise. Having subject matter experts to lean on can make all the difference as you enhance your expertise to provide a great employee experience. That human touch, coupled with best-in-class technology, can put you in a winning position.
