Human resources of employees are important for management and organizational science but they are widely ignored in small-scale entrepreneurship research. However, employees constitute an important resource of small- scale enterprises and an efficient utilization of employee’s skills, motivation, and behavior are essential for business success. In this
study we analyze the effects of Human Resource Management (HRM) strategies on small business success. 119 smallscale enterprises participating in the longitudinal study. Human resource strategies consisted of training of employees, decision -making involvement, goal communication, and support for personal initiative and were shown to positively affect business success. Moreover, human resources management was more effective when business owners as well as employees had high human capital.