There was good news last week from the job front.
According to the ADP National Employment Report, private sector employment increased by 130,000 jobs in October. The report also found that small businesses with 1-19 employees added 35,000 jobs during the month.
Making the decision to hire or not hire employees is difficult for any small business, but if it’s your first hire it’s even more gut-wrenching. Most small businesses start off as a one-man/woman show. As the owner, you do everything from emptying the trash to collecting the cash. However, when your business starts to grow, it can reach a point where the volume of work is overwhelming. That’s not a bad thing in terms of your business success, but it can cause you to become stressed out and burned out. There are only 24 hours in every day, and there’s only so much one person can accomplish.
The proverbial fork in the road
Reaching this point in your entrepreneurial journey is a pivotal moment. The direction you choose will have a lasting impact on your business. You recognize the need for additional manpower to manage the business, but the thought of committing to more overhead is scary. On the other hand, you recognize if you don’t add additional resources then you’ll stagnate at your current level of business. It’s a catch 22 in many respects.
So how do you know what to do? When is the right time to hire your first employee? The answer: When the business is ready. When you are ready. And when adding employees is in strategic alignment with your vision for the business. Here are four decision-making tips:
1. Review your business goals
If you desire to build a sustainable business enterprise, then it is going to take more than one set of hands to get you to that point. My theory about adding employees is what I call the MYTOP theory. MYTOP stands for multiply yourself through other people. Your first employee should be someone who complements your skill set so you can focus more of your time and energy on the things that you do well to add the most value to your business. Before you hire anyone, analyze your strengths and weaknesses.
2. Hire smart not fast
Clearly identify your business needs. That means you need to write a job description. Yes, I realize this is tough because you’ve never had anyone work for you before so how do you really know what the job is going to entail. Now is the time to figure it out. It’s important for you to define your expectations so you can identify the right candidate. It’s also important for your employee. Without established expectations, the chances of failure are great. Not to mention the frustration it can cause for both of you.
3. Determine a salary range
Committing to a salary is the scary part. Recognize when you hire someone, in order to get the type of individual you need to help you grow your business, you may have to take a salary cut yourself. In fact, many entrepreneurs find they have to miss a paycheck here in and there in order to make sure their employees are paid. Are you ready to make that commitment? It’s another form of making a financial investment in your business. However, if you choose wisely, the rewards are worth it because two people can accomplish more than one.
4. Avoid family and friends
I would venture to say that 90 percent of the time, hiring a friend or a family member ends in a disaster. When things go awry, good, long-term friendships are destroyed, and family gatherings turn out to be extremely uncomfortable.
What if the friend or family member is willing to work for free or a below-market value salary, and your cash flow is tight? Remember, the adage you get what you pay for? Your friends and family typically mean well, and they think they are doing you a favor because they want you to succeed. The operative word here is “favor.” Remember that! When someone thinks they are helping you out and doing you a favor, then it’s not a “real” job, and you aren’t really the “boss.” Chances are they won’t take you or the job seriously, and could easily leave you high and dry when you need them the most.
Building the right team can help you grow your business faster than you could ever do alone. But make sure you do it carefully and make smart choices.
Have more questions about whether to hire or not? Ask me below.
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