If your small or home-based business grows beyond a certain point, you must swallow your pride and get help.
There’s a touch of the lone wolf in every small-business owner–an attitude that says, “If you want something done right, you’ve gotta do it yourself.” Yet, if your small or home-based business grows beyond a certain point, you must swallow your pride and get help.
But how? Better yet, when? Making the decision to hire often requires a knack for predicting the future. Is a big new account in the offing? Are you in negotiations with a major new client? If so, you might realize that your success with these new customers could depend on having someone good to back you up.
“The first hire usually occurs within the first 18 months of start-up,” says Donald P. Mazzella, editor of Palisades Park, N.J.-based Small Business Digest. “Often, the person is part-time, local, and can simply be an extra pair of hands.”
Mazzella says the first hire tends to be in one of three areas: shipping, handling, and order taking; support and office management; or someone who can duplicate your skill set, especially if you’re a consultant or other for-hire specialist who would love to–but can’t–be in two places at once. Further expansion will come when it comes.
“Sales and IT workers are usually further down on the list, along with accounting personnel,” Mazzella says.
Just do it
Often, the biggest obstacle between you and that first hire is plain–and very reasonable–fear. You’re not only uncertain that your budget can sustain a second person, but you’re not sure you have what it takes to manage that person.
“Hiring is one of the most difficult decisions and task for any business owner,” says Linda Finkle, owner of Potomac, Md.-based small-business consultancy Incedo Group. “All kinds of issues come into consideration: benefits and their associated costs, whether there’s enough work, what to do if business falls off, how to find the time to interview and train once they are on board, and the skills you need immediately versus what you need long-term.”
Some business owners prefer to initially dip a toe in the personnel pool instead of diving in, employing part-time and independent contractors to start with while they evaluate what their budgets can stand. Chris Moore, president of Linthicum, Md.-based Zeroed-In Technologies, is one small-business owner currently astride that fence.
“I’m thinking mostly about subcontracting–no W2s initially,” he says. “Since I have a software product company, I’m also considering outsourcing the actual programming portion to keep staffing costs low or nonexistent. Then for sales, I’m considering using value-added resellers and partners to sell. If this works, I might never have an employee.”
But if you’re ready to start building a workforce, there are some definite dos and don’ts. And here’s a good one to start with: As tempting as it might be, try not to rely on friends and family–a bad experience can create needless bad blood on both sides. Hire the way you’ve been hired over the years, with help from want ads, temp agencies, Internet job sites, and solid professional references.
Read the fine print
The factors to consider while mulling a first hire are frequently either legal or logistical. There are a few ways to make sure your first hire is by the book; the main ones are to hire a good lawyer and a good accountant. But if you really insist on flying solo:
— Learn the basics of employment discrimination law. You might be surprised at some of the seemingly innocent questions that are no-nos during a job interview.
— Make sure any applications, contracts, or other documents cover you from a legal standpoint. Most job applications make it clear that the person you hire is an at-will employee who you can let go at any time. As a further fail-safe, consider hiring under the condition of a 90-day trial period.
— Count on adding about 25 percent to the projected salary of a fulltime equivalent (FTE) employee to cover insurance and other benefits.
— Check your local zoning ordinances for anything that might apply to your hire. Sometimes the rules are different when someone other than the homeowner and his family are working in a home.
— Call your insurance agent and make sure you’re eligible for workers’ compensation coverage before you hire anyone.
— Don’t try to figure out payroll and other tax issues yourself unless you have a strong accounting background, and you enjoy wading through tax law.
— Have a figure in mind that represents how much you’re willing to lose on an employee before you cut bait. When your decision to hire reaches a point of diminishing returns, you need to be able to resume as a solo act before you go broke.
Then there are the less tangible issues. Once you have your gal or guy Friday picked out, it’s time to make space for them–you don’t want your assistant perched at the kitchen table with a laptop. Make his or her office space as efficient and well-equipped as yours is.
Also, try to foster an appropriate workplace attitude: If your kids are tearing around the house while you work, you should either tell your employee that her children are also welcome, or else set up the office away from the mayhem. At the same time, don’ feel as if you need to establish a dress code and install a time clock to make the new person feel like they’re at work.
“There are always employees who prefer to be working in a casual house-friendly environment, rather than large corporate settings,” says Sara Flint, accounting manager for Atlanta-based Edge Communications Inc.
Train on time
Once you have your first hire in place, prepare for a bit of panic to set in: Never mind whether you can afford to pay him, do you have time to train him? If you want him to work out, you’d better make the time.
“Time is a resource not readily available to most small or home businesses,” says Finkle. “You won’t get the greatest value in the shortest period of time if you can’t invest time on the front end to get someone up to speed. Also, it’s difficult to evaluate a new employee’s performance if you haven’t given them adequate time and training.”
Fortunately, the growth of a business is a process that’s often organic enough to make things work out, even if it means finding 10 more hours during your 60-hour work week for training. So as you look around your hectic home business, ask yourself: How much of that ever-growing workload could you live without?