Let’s make 2015 the year to hire in your small business. Why? Because you want to grow your business.
Most small business owners and entrepreneurs want growth. They want to see their business expand, with more customers and greater sales and profits. But one of “Rhonda’s Rules” is: “You can’t grow alone.”
If you want to build a company of any significant size or value, you need help. You need to build a team of employees and/or contractors.
Don’t think you need help? Well, ask yourself this question: Are you creating a job or are you creating a business?
If you’re creating a job for yourself — self-employment — then it’s fine to try to do everything on your own. But if you want to create something that has value beyond just selling your time — if you want to create wealth — then you need to build a business. And that means you need to develop a team.
Hiring changed my business. I wish I had done it sooner.
I was a self-employed consultant doing rather well. But I spent much of my time running to the post office, sending out invoices and handling paperwork. That was time I could have spent searching for and serving new clients, writing books and columns, and making more money.
So one day, I took the plunge and hired a part-time administrative assistant. I paid just $10 an hour for 20 hours a week. I was lucky; I found a cracker-jack person. It changed my life. Since then, I’ve hired many more employees and contractors. And my business has grown in size and in value.
Hiring can change your business, too. And like I did, you can start small.
Why should you hire?
1. Hiring grows your business. Having a team enables you to concentrate your time and energies on the work you do best, rather than administrative or sales tasks. It increases your company’s overall capacity. You can sell more because you have more resources to serve additional clients or customers.
2. Hiring changes your life. Working alone can be lonely. It’s hard to stay motivated and make all the decisions yourself. Having someone else on board brings you skills and capabilities you don’t have yourself, ideally balancing your weaknesses. And, as you grow your overall revenues, you increase the likelihood that you could sell your business one day.
3. Hiring changes the world. According to the Small Business Association, in 2010 there were 27.9 million small businesses in the U.S., and three-quarters of them had no employees. If a mere 1 percent of them hired just one employee, they’d create more than 200,000 new jobs.
How much can you pay?
Of course, hiring costs money. To figure out how much you can afford:
1. Review your current monthly cash flow. Will you have enough money in the bank each month to make payroll? Even if your business is profitable at the end of the year, you must pay employees and contractors bi-weekly or monthly. So first take a realistic look at your monthly dollars in and dollars out.
2. Estimate your current monthly profit. Have you consistently been generating enough income to support the type of help you need, as well as yourself?
3. Estimate expected additional income. The goal of hiring employees is to enable you to make more money. How much will your new employee realistically generate? Be conservative.
4. Estimate how much you’ll have to pay. Once you decide what role and tasks you want your new employee or contractor to assume, determine comparable pay rates.
5. Estimate monthly taxes and benefits. Don’t forget that you also have to pay taxes and cover the cost of any benefits for employees.
6. Estimate additional costs. Will you pay higher rent for more space, have increased telecom, travel or energy expenses? Make an estimate of these costs as well.
But don’t be deterred. Sure, hiring employees or contractors costs money. But it’s an investment in your business and your future. Remember, if you want to grow, you need help. So let’s make 2015 the year to hire in your small business.