Some entrepreneurs — such as restaurateurs — start out with a team of employees in place, but many others launch their companies as sole proprietors. These independent small-business owners often struggle to decide when to add staff and what types of people they should hire.
The Intuit Small Business Blog recently talked with Rhonda Abrams, owner of PlanningShop and author-publisher of Hire Your First Employee (among many other books), about when small businesses should make their initial hires.
ISBB: When did you realize that you needed to hire an employee for your business?
Abrams: I had an “a-ha moment” when I realized that I was spending my valuable time running to the post office, completing administrative tasks, or invoicing. Often these tasks would fall to the bottom of my to-do list, and I realized that if I had help to take over the tasks that someone else could do, I could work on tasks that only I could do. It hit me that I could actually make more money by hiring someone.
How should small-business owners decide when it is time to hire?
One of the things I will talk about during my session at the upcoming Hire Smart conference is: Look at the amount of money that it is costing you to not have help.
Are you not getting paid because your invoices are sent late? Do you find yourself not having time to complete creative tasks? Are you turning down work? Are you not spending quality time with your family and friends?
People always think about how much it will cost to pay an employee, but instead [you] should determine how much more money you could make with assistance.
What other advice do you plan to share at the Hire Smart event?
You don’t have to plunge in completely when you decide to hire. You can start by hiring an independent contractor or part-time help; it’s not an all-or-nothing proposition.
My first hire was a $10-an-hour, 10-hours-a-week administrative assistant. One of my big concerns when I hired my first employee was where would she work, since I had a home office. She ended up working at my dining room table, and it was fine.
What common hiring mistakes do you see small-business owners make?
Many owners want their first employee to be a salesperson, but that is not necessary the first hire that many businesses should make. Entrepreneurs often don’t really identify their most important needs and instead assume that they need to make more money.
Other owners don’t take the time to write a job description before beginning the hiring process to determine what tasks they need an employee to do and what capabilities they need. One of my “Rhonda’s Rules” is to hire for attitude and train for skills.
I also see business owners, especially women, who put off hiring because they don’t think that they have the skills to hire and manage an employee. Being an employer, leader, and manager takes time. It is not something that anyone really knows how to do the first time they hire someone. You don’t have to know how to manage people before you decide to hire someone, but it is a skill set you should work on learning.
Any other hiring advice for small-business owners?
No one talks about how much satisfaction comes from creating a really good job for another person. Most small-business owners will write a check or do a 5K run to help make the world a better place, but creating a job where someone can make a living really makes a big difference in the world.
When [you] pay employees fairly and treat people [well], they will go home and be a parent, a spouse, and a citizen. You can help change the world.
The Hire Smart Small Business Event, hosted by Intuit and LinkedIn, is set for Sat., April 27, at Intuit’s Mountain View, Calif., campus. It will also be streamed live online. Admission is free. Click here to register.