It was a distaste for the “old fashioned” HR industry and passion for helping SMEs that led Sue-Ellen Watts to start her small business focused HR consultancy, wattsnext HR.
With “nothing but a vision”, Watts has guided the business through many of the same challenges faced by her SME clients as they grow and evolve. But now, 10 years after founding the business, she’s decided to step down from the helm and pursue other ventures. Watts told SmartCompany why she made that difficult decision, and what the future holds for her.
What inspired you to establish wattsnext HR 10 years ago?
I wanted to work with SME owners, and I wanted to be the commercial solution. I wanted to look at how to get them to perform, and be a partner to them, and help them look after their biggest asset: people.
Back then I hated the industry, and I was embarrassed to be in it, so I really wanted to change the way businesses utilise HR, and I wanted to specifically do it with SMEs because they employ the majority of people in Australia.
What were you doing before starting the business?
Prior to founding wattsnext I had worked in recruitment and HR industry, but all I ever wanted to do was to grow a business. I was working in a HR role at a business with over 100 staff and it was the first time they had a HR person in the workplace. I worked with all these departments who had team leaders, and I had to help these departments do recruitment, performance management, develop staff, and implement other HR frameworks. I realised, these guys are very lucky to have a business that could afford to employ a HR manager like myself.
This made me think, what are the small business owners actually doing? If they can’t afford to use HR managers and recruiters, they’re running in blind, and what impact is that having on their staff? I realised there was a niche in the market. Plus I was underwhelmed with the HR industry, which is in itself old fashioned, driven on procedures, and generally not adding much value to business.
I started wattsnext in a spare bedroom with no money, no business experience, no network, a three-month-old baby, plus the global financial crisis was just starting. I had nothing but a vision; I wanted to change the industry and be a trailblazer in HR space, along with scaling my own business.
I was passionate in an annoyed way because I had none of the foundations you would recommend for someone starting a business. My naivety was a real asset at that time as I didn’t look at any limitations and just developed the services as I went. The most important thing to do in the early days is to behave now like where you want to be in the future.
I had virtually no money, so it was a case of get one job, buy the printer, then get one job, buy the paper. If knew if I wanted to grow the business I had to act differently, so I chose to just do it and somehow pay for it, with no aversion to risk. Sometimes you have to take away safety nets, and that’s how I’ve always run it. I worked on the business more than I worked in it.
How different is your business today compared to 2007?
It’s completely different. The types of clients we have are much meatier, more substantial, and they’re more around fast growth. In the beginning, we served more micro businesses, but now our offering is much different; it’s higher level and much more strategic.
Someone asked me if I was where I wanted to be which was an interesting question. While I haven’t met all the goals I wanted to meet, we’ve achieved things we never thought we would do with wattnext’s reputation and brand. Our brand is much more powerful than I thought it would be.
I’m currently in the process of starting up some new startups out of wattsnext. I still own the business solely and I am the inspirational leader, but I’m going off to do new business with some other partners in a completely different space. I decided I’m not the best person to lead the business into next decade. I created it, built it, and now just needs to be sustained.
It was really hard to make that decision. I’ve been doing a lot of broader education and a lot of focus on entrepreneurialism and looking at what my strengths are. The things I wanted to do myself were not what wattsnext need, and I figured if I continued on I’d break wattsnext and make it something it’s not.
Some people are built to start and grow a business, and some people are built to sustain them.
What challenges have you come up against while running the business?
People telling me I couldn’t do it. These days we have co-working spaces, we have meetups, but none of that existed when I started my business, there was nothing like the support available now. Growing a small business is tough, you’ve got your life on the line, your house is on the line, and you work your guts out for nothing.
There were times when I had no money from throwing everything I earned back into the business, working so hard and getting nothing. I needed help but I couldn’t afford it. That’s when people quit because it’s hard. Getting support was a real turning point but that took five years.
It’s not the business that fails, it’s the owner’s perseverance and willpower to keep fighting through. If you want to go into business because you’ll earn more money and be the boss, that’s not reality. Your house is on the line, you’re quite isolated, you have no flexibility, and you’re working around the clock.
What is the most rewarding aspect of being your own boss?
The reason why we do it is never about the money, it’s about the rewards along the way. Ultimately I wanted to grow something and see a difference being made, creating something that is actually valuable for the community or whomever it is you’re servicing.
My personal growth over 10 years has been extraordinary. The journey has been amazing; I’ve met people and learnt things I’d never been able to do otherwise. We will have a lot more failed startups in the future because people think it’s easier than it is. Young people think they can be the next Zuckerberg and that’s really dangerous. No business has it easy.
What do you think will be a significant factor affecting your business in the next 10 years?
For us we need to be ahead of the future of work, looking at how our workplace changes, and that means we need to do so much education. With the way our world’s moving we need to be ahead of the game.
It’s a constant thing, always staying relevant and working out how to stay relevant. What’s important to SME owners today and what’s important next year is going to be different. You have to be aware of the changes ahead, and be prepared to change your product or service.
Anyone who’s not looking at how the industry is going to be disrupted is playing a risky game.
Read more from the Class of 2007 here.