First Step Marketing

Hiring a staff of employees, or even deciding whether to take on just one in the first place, can be one of the most difficult decisions a new entrepreneur can make.

Labor (and all the associated costs: insurance, additional equipment, supplies) and employer- paid taxes turn the employment section of your budget into your single largest expenditure. The decision can also take an emotional toll. Becoming an employer means that you are responsible for another person’s livelihood. If your business should suffer a setback, even a temporary one, the fact that payroll is your largest single expenditure may mean that you may have to lay people off in order to save your business. And in good economic times or bad, letting an employee go is easily the most unpleasant part of being the boss. A close second is the frequently overwhelming amount of paperwork required by federal, state, and local governments for taxes, insurance, and other employee expenditures.

However, taking on employees so you can get more work done and grow more quickly is not the only advantage to hiring people. Since entrepreneurs are so close to their businesses they are sometimes unable to gain a clear perspective on pressing business problems; having access to another person who is familiar with the business and possesses a completely fresh pair of eyes can be a great help in those instances.

What Are You Looking For?

Before you write a help wanted ad or start asking people for referrals, you should make a list of the tasks you’d like your employee to handle. Does he need special skills? Do you need him full or part time? Is there special equipment he needs in order to accomplish the goals you set for him? Be reasonable about the amount of work you would need an employee to handle in the time frame you can afford.

What Can You Pay?

Next, you’ll have to decide what kind of salary or hourly wage to offer. The best way to decide is to check the help wanted ads in the local paper to see what the competition offers to employees who hold jobs similar to the one you’re looking to fill. Granted, businesses that are just starting out frequently cannot afford the salaries and benefits of a larger, more established company, so if you can find some way to compensate for the lower pay, do so. Some new entrepreneurs let their employees work at home part of the time, or allow them to choose the hours when they’ll work. Many people who juggle family and work responsibilities will gladly take less money in return for being able to incorporate more flexibility into their lives.

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Hard Decisions for New Entrepreneur to Hire Employees

This entry was posted on Saturday, November 1st, 2008 at 4:30 am and is filed under Budgeting, Jobs, Payroll, Tax. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.