Small Business Minute: Hiring your first employee
12/8/2004

By Brian Leaf

So your home business is booming and youíre overwhelmed. Maybe itís time to hire.

For many entrepreneurs, who wanted to run a small business from a back bedroom, becoming an employer was never in the picture.

 But when phone calls and orders bog you down, you canít focus on core activities like sales, marketing, customer service and new products. You need help.

The scary part is that hiring someone changes your business. You now have a payroll. You may have to consider a benefits package. Your new hire may expose your company to employee lawsuits. Your employee will need training. Youíll be a boss. If youíve run your business as a sole proprietorship, your may have to incorporate. There are legal requirements that you must fulfill.        

Yes, hiring someone is a big step and can create headaches. Entrepreneur magazine says there are five questions to ask before you hire.
  1. What jobs will you delegate?
  2. How many hours a week will your employee work?
  3. How much more in sales will you need to cover the payroll?
  4. Can you afford benefits?
  5. How much time will managing your employee take?
You may consider hiring a contractor or freelancer. Youíll only pay for the services you need and theyíre responsible for any taxes. Or you may want to contract with a temp agency for help.

If you decide to hire an employee, write a job description. Interview at least three candidates. Call references. Donít ask questions about age, race, gender, family or health. Write an offer letter detailing duties and pay. Consider getting an employee handbook.

Hiring someone is a big jump for a small business. But for many small business owners it is a necessary step to realizing their dreams.

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