Until now, it’s just been you and your business. You’ve worked hard, gained customers, and brought in a decent amount of revenue. Business is booming! But… business is booming. You’re wearing too many hats and doing so much work that you’re burnt out and almost forgot to feed your dog this morning. Your friends and family say, “Hey! We haven’t seen you in a week! Why don’t you just hire someone to do some of this work for you?”
You think about it for a while and the idea sounds really attractive. A new hire certainly has plenty of benefits. You could have someone set your appointments or do all the tasks that you simply would rather not do. You could bring in more money because you would have more time to handle business needs you couldn’t handle before. You could wake up and fall asleep at regular human hours. But what you may not realize is the severity of what employing your first worker could mean for your business.
The commitment to salary, benefits, and even severance may be more of a financial obligation than your business can afford. Making the decision to hire a new employee could mean a lengthy process in preparation, legal correspondence, interviewing, training, and orientation. You have to ensure the employee knows what is expected of them and whether they can actually help your company in a financially viable way. You may even find that the employee you hired cannot perform well, taking more of your valuable time to either keep and train them or repeat the hiring process.
While there are obvious downsides to making that first hire, an increase in manpower could certainly mean an increase in revenue when planned correctly. If you aren’t sure if hiring someone new would help your business, ask yourself these questions:
8 Do I Really Want To Be A Boss?
Before you can even decide to hire, you should assess your ability and desire to hire someone. Bringing in a new employee means being responsible for a large chunk of, if not all of, someone’s finances; it’s a responsibility that shouldn’t be taken lightly.
7 Does A New Hire Fit Into My Business Goals?
When you started your business you at least had an idea of how you wanted it to grow, short term or long term. Any decisions you make in hiring a new employee need to line up with the goals you have for your business.
6 Do I Have The Time?
Of course, you’re hiring someone because you don’t have enough time to complete the work you need done, but you have to consider whether you have the time to hire someone. You will have numerous resumes to search through, perhaps in the hundreds depending on the position and the popularity of your company.
5 Are My Customers Unsatisfied?
Your clients and customers need to be kept happy and completely overjoyed to do business with you. Life without an employee could cause you to overstretch your time and sacrifice work that could affect your relationship with your customers. Not having enough time to meet with a potential client or develop a more effective marketing strategy can mean unsatisfied customers and fewer profits.
4 Do I Know What Kind Of Employee I Need?
You need to determine what job you need an employee for and whether it would be better to just do it yourself. Once you understand your business needs and budget, you can make a clearer decision on the kind of job you need filled, if you really need it at all.
3 Do I Understand The Legal Requirements?
It’s not as simple as conducting an interview, hiring the best employee, and giving them cash every hour. There are federal and state filing requirements, payroll taxes, and workman’s compensation insurance costs that can add up. Government regulations can be found on the U.S. Small Business Administration’s website.
2 Do I Have Enough Room?
If you’re running your business from home, there’s a chance that you won’t want to share a more-than-likely cramped office space with your new hire. What was once just a one person show now requires two people to constantly communicate. If you anticipate hiring several employees, it might be time to consider a rented space.
1 Do I Have The Money?
Financial responsibility is perhaps the most important part of making a growth decision. Hiring an employee means trading your money for services and time you would not have had otherwise. How much money you are willing to spend. Will you be about to afford a payroll? It isn’t as simple as figuring out the hourly wage; you have to factor in taxes and social security, new equipment, materials, and even a potential raise if business goes well. You may need the help of an accountant to figure out your fiscal decisions and flexibility.
With the accountant’s help and a great handle on your financial status, you should be able to know whether hiring an employee is right for you. It is important for your books to be organized and balanced in order to make the process easier and make the smartest decision. You should be able to determine whether the funds should come from the operating budget or your profits, or if there’s no room to add another expense.
Keep in mind that while hiring an employee may be more costly than your business can currently handle without digging into savings, the responsibilities of the employee should bring in long-term benefits that will make your business more profitable in the future. For instance, hiring a sales representative for your business could not only double your sales initiative, but it could free up some time to gain more clients and further develop your marketing strategy, ultimately increasing revenue.
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