Your small business has been chugging along with solid momentum, and you’re starting to hit the wall that limits how much you can grow without delegating more tasks to employees. You might have started out with the help of friends, family, part-time employees, and contractors, but now it’s time to take a good hard look at your small business situation to determine if you’re ready to hire your first full-time employee. Before you make the leap, consider your business stability, monetary investment capacity, work environment, and the long-term impact of taking on a permanent, full-time employee by asking the following five questions.
Are you comfortable with your business stability?
The Small Business Administration reports that 50 percent of businesses fail within the first five years. Before you start bringing on full-time employees who are going to be focusing entirely on your business for their livelihood, determine whether your business has enough long-term stability for you to take on full-time employees. Hiring a full-time employee is a major business commitment and investment, and you don’t want to jump into it lightly.
What are your business needs?
You don’t always need to go the full-time employee route, especially if your work load fluctuates wildly throughout the year. Look at the time requirements for the position that you’re considering hiring for. If you need less than 30 hours a week on a consistent basis, the times that you need an employee are sporadic. If you have a narrow, specific skill set you can’t compromise on, you might want to pass up the full-time employee for a contractor, according to Fit Small Business. If you have sensitive business data, find someone who is invested in the long-term success of your company. Spend the time tailoring people for management and executive positions as your business grows, and full-time employees will be worth the investment.
Have you evaluated the financial gains and costs?
Full-time employees have many associated costs, such as unemployment insurance, benefits packages and other monetary requirements. Quickbooks is a great way to track expenses, create a budget and financially plan for a new employee. Evaluate your business budget and overheads before you make the move from contractors or part-time employees to a full-time team. The base hourly pay or salary might not be a big increase, but all of the overhead costs increase significantly when you make the full-time employee move.
Can you expense accounts?
When you’re the only one incurring business expenses, you probably use whatever payment method is more convenient and work out the accounting details later. You can’t swing this so casually when you have other people taking from the expense accounts. One option is to use the best credit card for business transactions and distribute business credit cards to employees. Purchases are paid for with company accounts, and you’ll have easy-to-read statements, available receipts for tracking transactions and even perks from which to benefit.
Is your work environment suitable for others?
If this is your first onsite employee that you’ve hired, observe your office or workshop and make sure there’s space available for the new employee. You don’t want someone milling around and feeling awkward because there’s no proper space for them to work. Create a welcoming, productive environment if you decide to start hiring.
