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To succeed, small businesses need to build a winning culture. Although it may not seem as immediate as considerations like sales and cash flow, small businesses cannot afford to neglect it.

Tom Gegax, author of The Big Book of Small Business, built Tires Plus Stores from a struggling business to a national brand by putting a heavy emphasis on culture.

Hiring the Right People

The first step is hiring the right employees (or teammates, as Gegax prefers to call them).

Gegax specifically looks for people who possess the COPPSS traits - caring, optimistic, passionate, persistent, systems-oriented and spirit-filled.

He said character traits like these are hard to instill while work-related skills are easier to teach.

To screen for these traits, Gegax recommended a set of unusually interview questions to find out who [applicants] are, not who they want you to think they are.

These questions, for which most applicants do not have scripted responses, include: what makes you happy? what makes you sad? what makes you angry? what is the biggest mistake you made and what would you do differently?

If current employees do not have these traits and do not seem to be able to acquire them, Gegax suggested parting ways with these employees.

Supporting Their Wellness

Once small businesses have hired employees who have the COPPSS traits, Gegax recommended supporting their wellness.

For example, he suggested inviting experts on financial counseling, marital counseling and other fields come in to speak with employees. He also advocated getting gym discounts for them and introducing smokers to smoking cessation programs.

While these suggestions may sound controversial - especially for cash-strapped small businesses - Gegax countered that they are relatively inexpensive (e.g. if the marital counselor only comes in once a quarter).

Moreover, the benefits, such as more productivity and fewer sick days, are well worth the costs, he said.

Lastly, Gegax suggested scheduling fun activities for employees and recognizing their birthdays, anniversaries and other important personal landmarks.

Warm-hearted but Tough-minded

When it comes to leadership styles, most small business owners are either doormats or tyrants; both types tend to create suboptimal cultures, said Gegax.

Instead, the correct middle ground is being warm-hearted but tough-minded.

Being warm-hearted means treating people with respect and genuinely caring about them (including on a personal level). Even when small business owners need to fire employees, they need to do it kindly and with sensitivity, said Gegax.

Being tough-minded means clearly letting employees know what is expected from them and telling them if they do not meet those expectations.

Gegax recommended having a systematic framework - including performance reviews - that discusses for employees their expectations, goals and the steps they can take to reach those goals.

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