Trying to do too much by yourself can be detrimental to your business.
Being a one-man band or solo entrepreneur (‘solopreneur’) has tremendous advantages: you can set your own schedule, and create your own destiny without having to deal with the hassles of hiring or management. While this approach offers maximum independence and is ideal for some businesses, it doesn’t offer the ability to scale your business. If you want to grow your business, you have to grow your employees, but when is the right time?
“If I told you I’ve worked hard to get where I am at, I’d be lying, because I have no idea where I am right now”. Jarod Kintz
Just merely having more tasks to complete than you have hours in the day is most certainly not the only indicator. Successful business owners realise they have gaps in their expertise and skill set, so they turn to trusted professionals who can help them see what they’re missing. There’s only so far you can go as a one-man or one-woman show. If you’ve been contemplating hiring your first employee, can you be sure the time is right? Will your new employee help grow your business or become a drain on your time and budget? It’s difficult to know what the future will hold or how things will pan out, but asking yourself these five questions can help determine if you’re ready to go from solo entrepreneur to employer:
- Are you turning down work? Obviously, you shouldn’t hire until you have adequate work for another person to handle. When you’re turning projects or customers away on a regular basis you probably have enough work to hire your first employee. If a quick review of your situation reveals that you’re turning down work regularly, you also need to consider whether, for personal reasons, you wish to keep the company small as well as whether you’re able to regularly pay for extra help.
- Have you identified a possible new revenue stream? The second question is a possibility you might not have considered. Sure, you can hire someone to take some of your existing workflow off your hands, but you can also hire to take advantage of whole new types of work that you can’t handle on your own. Perhaps you have secured a new contract or project or you started selling a new product or service that brings more clients through your doors. Having enough or too much work to keep you busy is a nice problem to have. It beats having too little or no work at all.
- Are you receiving complaints? You probably think of customer complaints as a bad thing but it should rather be seen as an opportunity to constantly improve your product/service offering. That being said, customer complaints may a sure sign that it is time to hire your first employee, especially if customers start complaining about the quality of your work or the timeliness of your execution.
- Why are you hiring someone? What are you trying to accomplish by adding this employee? Do you need an assistant to take care of the busy work so you can focus on revenue-generating activities? Are you looking to add expertise so you can expand your offerings? In short, how do you expect this employee to add to your business over a period of six months, one year and five years? You can’t justify the cost of a new hire until you have a road map of the benefits they’ll provide.
- What’s the full cost of an employee? Consider that when hiring your first employee, your monthly expenses are more than just paying a salary. Think about everything that your employee will need to perform his or her job including a PC, software, cellphone, travel expenses, office expenses, etc. In addition to any work space and equipment, you will need to fork out payroll taxes (PAYE and UIF), medical aid, and pension fund along with any other benefits you choose to offer to retain the employee. Possible the biggest expense will be your time; the time you take to train, coach and mentor the new employee. Don’t forget this!
“The best time to plant a tree was 20 years ago. The second best time is now”.Chinese Proverb