As a sole proprietor, there comes a point when you realize you need additional help. Making that leap into hiring staff can feel overwhelming for many different reasons - but so is trying to continue running your business on your own! Is it time to go from sole prop to employer and how do you do it?
When Do You Know Hiring Staff is the Right Move?
Ask yourself the following questions:
Are you able to respond to prospects and customers in a timely manner?
Have you had to turn down jobs due to lack of available resources?
Are clients or staff leaving?
Are tasks unrelated to generating income taking up too much of your time?
Do you lack expertise or skills in a specific area that could help drive business growth?
Have you noticed a decline in the quality of your work or your ability to meet deadlines?
Do you consistently feel overwhelmed?
If you answered yes to any of these questions, it may be time to hire staff. Keep reading!
Get Organized and Clear on Your Purpose for Hiring Staff
If you started your business as a sole proprietor, it's likely you figured things out as you went along versus having a written job description with role responsibilities. To this point, you have only had to answer to yourself and you were able to do what you felt was needed to propel the business forward. All without having to communicate your needs verbally or in writing.
When you hire staff, it's important to consider what responsibilities you need to take off your plate and what delegating those tasks to someone else will free you up to do. This will require reflection and it will definitely require your time to get your systems in place (see Documentation section below). Make sure you plan to continue to use your best skills that will have the biggest impact on your business.
Know Your Numbers
It's important to know your cash flow and how hiring staff will impact your bottom line. A new employee may allow you to generate more income almost immediately while other times the existing income needs to support the new employee paycheck until business growth can occur.
It's also important to make sure you understand that in addition to an employee's wages, you may also be responsible for payroll taxes, Medicare, Social Security, worker's compensation and benefits.
Talking to your CPA would be an important step prior to hiring staff. They'll also alert you to requirements of hiring staff for your state, such as obtaining an EIN number.
Documentation
One of the biggest mistakes I see sole proprietors make in hiring staff is not having complete and clear systems in place. In addition to outlining job roles and responsibilities for each job you are hiring for, you want to make sure you have written operational systems in place.
You've been running your business for years so remember, operations that seem obvious to you, will not feel that way to a new hire (i.e. how to log into software, how to invoice a client, etc.). You don't want your new hire coming to you multiple times an hour to ask questions. Outlining the procedures and having reference material will not only be key in helping your new hire succeed but it will set your business up for success as you continue to grow and bring on more staff. So, make the time to get your business processes out of your head and into a tangible format a new hire can use.
Prepare Yourself
As an entrepreneur and freelance marketer, one of the biggest hurdles I see sole proprietors struggle to overcome when hiring staff is learning to let go of control. As entrepreneurs, we find comfort in control and we have this belief that the only way it can be done right is if we retain the control.
But, by doing that, you are actually preventing your business from growing.
I have worked with entrepreneurs who have failed to let go of control. The effects of these scenarios - wasted money and no business growth. I've also been there myself - I bought into this myth:
MYTH: Nobody else can run my business as well as I can.
Go ahead and re-read that last sentence out loud. True, nobody else is you and you definitely have your unique talents, but think of all the successful businesses out there that are not run by you. Did most of those companies succeed as a one man operation? You want to build a team of people with areas of specialty that you do not posses and that will help you reach your business goals.
Have you heard the expression: Done is better than perfect? I also like to use the expression "don't get lost in the weeds". For example, if you hire someone to write a blog post for you, you have set clear output expectations and they provide what you asked for without any incorrect material facts, it is done. DO NOT take two weeks to get around to reviewing it and ask the writer to change the word "quicker" to "faster". You are wasting your time, your money and damaging the trust you have in your writer. Done is better than perfect.
Keep in mind, you can always make modifications and changes to output expectations and responsibilities going forward, if needed.
As your business starts to grow, you will likely start to shift your focus into a CEO role that leads the business' overall operations and performance rather than overseeing the daily activities.
Recommended reading: Clockwork: Design Your Business to Run Itself by Mike Michalowicz
Types of Hires
Just because you need help, doesn't mean you need to jump in and hire a new employee. You have options.
Freelancer: A freelancer is a self-employed person who hires their services out to one or more businesses. They set their rates, contract the number of hours they want to work each day, week or month and typically have a short-term work arrangement with your business. The benefits to your business is you can terminate the relationship fairly easily, you are not required to pay benefits or taxes and because most freelancers are professionals with experience, there is a relatively short learning curve to get things going.
Independent Contractor: Also a temporary worker who may work for multiple businesses at once, however, they usually work on larger projects or for longer-term clients. Independent contractors typically set either hourly or project rates and may work onsite or remotely with an agreed upon schedule. And again, you are not required to pay benefits or taxes for independent contractors.
Employees: As the employer, you retain more control over the pay, work hours, job roles and growth.
An additional area to consider when hiring staff: experience vs. personality. It's a long-standing debate. In general, I feel if you find someone who has been successful in their past roles and they can show an understanding of the skills needed to perform the job you are hiring for, I would take a winning personality and capability over a specific skill set. Of course, that may not always be the case. There are roles when a potential employee should have a deep knowledge of a specific skill.
The best way to navigate these opposing viewpoints: consider specific personality and ability traits for the position which you are hiring, such as ability to accept criticism, ability to learn quickly, adjacent skills, or the ability to manage others.
Where to Find Help
You likely already know the person who will help you grow your business! Here are a few tips on where to start looking for help:
E-mail your friends and family and let them know you're hiring staff. They're likely to share with their network of people and may be able to give you a personal recommendation.
Send e-mails to your clients. You have already had successful interactions with your clients and they would likely share your opportunity with like-minded people.
Look to your vendors, networking groups or colleagues to see if they can recommend freelancers or independent contractors.
Post on your social media accounts, especially LinkedIn.
Create a Careers page on your website to share your job opportunity.
Use job board websites to promote your opening.
Recommended reading: The Power of Who by Bob Beaudine
Conclusion
Hiring staff will take careful planning to get it right. You don't want to cut corners during this process or take too long to make a decision as your business' growth and profit is at stake. Make sure you think through the needs of your business, consult your team of professionals, put everything in writing, get your mindset straight and get going on your journey from sole prop to employer.