You've worked long and hard to get to this point, and now it's time to hire your first employee. Congratulations! In my experience with small business owners, this decision does not come without trepidation, and with good reason. You're probably wondering if you can afford the expense. Will you be a good boss? What about the time commitment to train and observe your new hire?
What you need is a strategy with the systems in place to support it. A bit of information gathering (like you're doing now) and thorough preparation reduces the stress and risk of hiring employees. Create a process that's right for your company by following these steps.
1. Evaluate the need.
The first clue that an employee would be beneficial is being overwhelmed, with little time to work on your key revenue drivers. Evaluate your vision for scaling the company--can you achieve it in your current state? To reach your growth potential, you will need the proper infrastructure in place. That usually includes employees. Your first step is to make a list of non-entrepreneurial tasks to create an accurate job description.
2. Weigh the financial risks.
How will you pay your employee's wages? Before you place a job post, identify the most efficient way to increase your sales volume. Once you have a strategy, the next step is to hire and train your employee and then to work aggressively on these revenue drivers.
3. Speak to your accountant.
A small-business accountant can assist with things like filing for your employer identification number (EIN). They will walk you through the questions and risks so you understand the whole picture. "We need to determine how an employee will affect the business owner's life from a financial standpoint," says Anne Marie Craighead, president of AMC Accounting Solutions. "We run projections based on wages, deductions, and an estimate of additional income derived from the additional headcount."
Craighead stresses that some clients don't anticipate the costs associated with FICA, workman's comp, unemployment tax, and potentially professional payroll services. "The laws and tax tables change from time to time; having a professional service run payroll protects you from the steep penalties associated with late pay should you miss something," says Craighead.
4. Be intentional about your culture.
Establishing values-driven policies offers a roadmap for your decision-making, including whom you choose to hire. In one recent scenario, I took a client through a culture/values exercise, and she realized it's time to hire someone with strong leadership qualities. The person she had in mind before our session would not have been a good fit for the roll. She also gained a firmer grasp on the personal qualities and values she would look for in her candidates.
Michael Hyatt's book The Vision Driven Leader offers six tools for crafting a vision for your business and distilling it into actionable plans that drive results.
5. Test, train, and trust.
Test. I also work with a small-business owner who outsources technical writing jobs for her clients, but who had no methods to determine how well-written her applicants are. She has since developed a testing process and an interview approach based on emotional intelligence and a skills assessment. Since implementing this robust hiring practice, she has virtually eliminated employee issues.
Train. While time-consuming upfront, the development of training tools is a worthy long-term investment. One simple way to achieve this is during the actual training process. You and your new hire can document the process by writing and/or capturing each step as screen video. I like to use process.st to store, organize, and track the usage of training materials.
Trust. Entrepreneurs often have issues trusting others to do the work. Yes, mistakes will happen, but this is an integral part of the learning process. This study shows that making mistakes can improve our memory for the correct information. Additionally, your way isn't necessarily the best way of achieving specific goals. A talented and creative employee may come up with better ideas.
Ready to take the plunge? Take your time and hire the right person for the job to mitigate the risks, and you will benefit from a happy, productive employee.