Keeping overhead low is an important consideration for any small business. So, it is a big step to go from an owner-managed organization to a company with an actual employee. You may get to the point, though, where you realize that increasing revenue is contingent upon increasing capacity. When you do, you’ll need to be strategic about which role to add and how. Here are some key considerations in hiring that next staff person:
PROFESSIONAL OR SUPPORT STAFF? Your first instinct may be to hire someone that can generate direct revenue, but that may not always be the right move. If you’re in a sales-focused organization, hiring a producer makes a lot of sense. However, if you’re in retail, you may simply need someone to work in your shop so you can be freed up to focus on marketing, merchandising, and other business details. You need to assess what you bring to the table and what gaps there are. Maybe you just can’t get to all the calls yourself? Or, you can’t focus on creating your product without someone processing the orders? Chances are, you don’t need another you. You probably need someone who can complement and support you.
EMPLOYEE OR CONTRACTOR? An employee is someone who is hired to perform a specific role within specific parameters (9 to 5 hours, for example). You will need to file paperwork on employees and pay payroll taxes. This means adding a new administrative element to your business. Or, you may be thinking about hiring a contractor instead. While a contractor may save you on taxes, you are limited in how you structure their time and your agreement with them. Before deciding, review the FLSA section of the DOL.GOV site on employees vs. contractors and make sure you’re making the right choice.
PAYROLL OR PEO? If you are sure you need to hire an employee, you may find yourself concerned about managing payroll, paperwork, and payroll taxes. Professional Employer Organizations, or PEOs, may be an alternative for you. A PEO is an organization that hires the employees of a company on your behalf. The PEO takes care of the paperwork, payroll, taxes and insurance and removes that liability from you. You simply pay a monthly invoice which makes life easy for a small business owner. Another option, is to outsource your payroll processing, compliance paperwork, onboarding and the like. That’s where companies such as The Resource Squad come into play.
Once you’ve sorted through your options, start the recruiting and hiring process. While it may be intimidating, this may be exactly what you need to grow your company to the next level and ensure the success you’ve invested in.