I am answering this question based on my experiences from my past when I was a manager in the corporate world. Employee empowerment is generic enough to apply to any business.
I believe that it is important that you outline what you expect of your employees. Your employee needs to know the framework in which to operate. That also applies to the culture of the business not just the rules and regulations.
If you want things done in a certain way, say so. But if you give the employee a range of possibilities, do not begin to micro-manage when it is done in a way different from the one you would do yourself. As long as the outcome is satisfactory and the process is safe, respect your employee in knowing how to do it. If, one the other hand, you feel it is not, address the issue right away. Point out what you like (there is always something), and what you don’t. Do so privately and never in front of others.
If somebody comes to you complaining about your employee, be non-committal until you know all the facts. It is reassuring for an employee to know that you support him. If something was amiss, address it as above.
Try to get to know your employee’s strength and weaknesses and help to reinforce one and improve the other. Be positive even in your critique but be frank. Be as specific in your praise as in your reprimand.
If you have several employess at the same level, jump through hoops to treat them with equal fairness. It easily breeds discontent if people feel that they are not treated the same.
When you are in a supervisory capacity, be friendly to all and friends with none. That can be difficult in a small business but I believe that you need that distance to view issues and performance with an impartial eye.
Encourage communication that goes both ways. Your employees bring their own experiences to the table, and this is a resource to tap into. Listen to their suggestions and comments and act on it as applicable. They are part of a team, and the whole is greater than the sume of all parts.