You have spent so long growing your business, putting in the hard yards and investing every single dollar back into it so it can run smoothly. You have gone without. You have counted every dollar. You have seen it grow, you now have had your first profitable year, and maybe you are finally so busy you have just said your first “no” to a potential customer.
So the question is, is it time to employ? It can be very exciting but can at the same time be quite daunting. You will be responsible for this employee – you will be their boss, mentor, coach. You may now be in charge of their mortgage payments or kids’ school fees. But it might mean you can finally delegate some of your tasks so you can focus on what is really important for the business.
Hiring too early may bring cash-flow problems, and an employee sitting around twiddling their thumbs. Hiring too late may mean you lose some customers to a new competitor on the block or be inundated with work you can’t accomplish on your own.
Of course, there is no hard and fast solution that will apply to everyone, but by following these next few tips it may put you in the right stead to make the correct decision.
You may have heard the age-old rule that an employee should only either make money for the business; or save money for the business.Generally, these are good rules, but in those early days, making money could be much more important than saving money.
It’s always a good idea to write out an exhaustive list of all the tasks you are doing – no matter how big or small – and work out what can be delegated. You will know it’s time to bring in an employee if you can then identify the tasks someone else could do that will also increase revenue.Some examples might include:
· Product Development – Developers, Tradesman
· Business Growth – Business Development Manager,Content Marketers
· Client Support – Client Liaison Officers, HelpDesk
Yep you might sit there some days wishing you had an employee to just “help you out” or help to get “on top of things” and although this may sound appealing, it isn't usually good enough to warrant making that first big jump.
Instead, you want to get really specific. You want to be able to write out a job description that is clear and concise so your new employee knows exactly what is expected of them. Ever heard of the acronym SMART KPI? This stands for Specific, Measurable, Attainable,Relevant and Time-Bound Key Performance Indicator and it’s a very useful metric that is used to assess employee and company performance.
Before you advertise for the position, write out a SMART job description. The clearer the set of responsibilities you lay out, the more accurately you'll be in hiring someone to fill these responsibilities.
Still a little undecided? Hiring a contractor may be a great first step to work out if they are helping the company, or even perhaps holding you back. You can sort out any teething issues and the great thing is you maybe able to transition this person into a full-time employee, or if it’s not working out, simply part ways at the end of their contract.
There may be superannuation and withholding tax obligations in respect to the contractor depending on what the contract stipulates, so we suggest always checking in with us to understand your tax obligations.
Think you’ve ticked all the boxes and you’re ready to make that exciting first hire? Congratulations! Now workout exactly how much you will need to spend on their wages for three months, including tax and superannuation, and make sure you have the cash stashed away in case you experience a slow month. Setting up a separate business bank account for payroll can be a great idea to ensure you’ve always got this money ready to go.
Strategy is our strength, so if you’re on the fence about employing or would like help planning your future move(s), get in touch with one of our Attune Advisory team. Phone 1300 866 113or click here.