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The purpose of this paper is to make the case that owner-managers of small businesses should consider using strength-based coaching as a key element of their performance management and learning and development endeavours because small businesses are potentially well-suited to this type of developmental intervention.

In making the case, we draw on literature primarily in four areas: performance management, positive psychology, strength-based management and small business management. The case for adopting strength-based coaching is also underpinned by the practical insights of an experienced small business manager.

The informal internal organisation found in most small businesses makes the small business context potentially well-suited to strength-based coaching. In particular, the informal characteristic of small businesses promotes close working relationships between owner-managers and employees and broadly defines work roles. Such a work context is conducive to strength-based coaching that involves owner-managers capitalising on the unique abilities of each employee by redefining work roles to fit employees’ strengths.

Using strength-based coaching to align employees’ strengths with the work of the small business should have positive effects on the key variables of individual and collective performance and ultimately business results. These variables of performance are employee ability, motivation and opportunity to perform.

After database searching, it seems that there is no previous work that has examined the potential efficacy of strength-based coaching in a small business context. The paper has value for small business managers who are seeking practical guidance on how to improve their current approaches to both managing employee performance and fostering the learning and development of the staff.