You are a business owner – an entrepreneur. Your company has been around for a number of years, has had decent, steady clients and the Company seems to be growing at a predictable rate. Nice position – but what is next. You are working around the clock to meet customer or client expectations along with running the business.
Some would say, “nice problem to have,” but the reality is that this is extremely stressful, opens the company up to making mistakes and worst of all, the glamour of running a company is simply…gone. It’s like you have a teenager who can do a lot of stuff on her own, but keeps you anxious and sleepless as you worry about whether or not she is okay.
You probably think to yourself: “I need some people. I can’t keep doing this alone.” But where do you start? Sure…you may have had some contractors to deliver certain, specific tasks, but they are simply there for the work and will likely be gone once the job is done. The nice thing is that if there is no work, they aren’t on your payroll.
But at the same time, they may not always be available! They could be working for your competitor down the street at the time they are working for you. They take vacations and have children and deal with other personal issues – and don’t have to be worried about you. Nice.
Staff – actually hired-on people…the nice thing about them is that if you tell them to be somewhere, they are going to be there. You can expect a different level of commitment. When they need time to do whatever, they are going to let you know ahead of time, and they are certainly not working for your competitor. Well likely not.
Of course, the downsides include taxes, healthcare/benefits, you have to manage them and payroll. You have to pay them regardless of whether or not you have work for them until you get to the point where you have to lay them off.
But the other side off the coin exists as well…it seems that there are a LOT of jobs out there. In some industries, it is a seller’s market, meaning that those seeking work with the right credentials will likely have several offers that they are considering. And they likely have a list of must haves (salary, benefit, quality of life, ability to make an impact) and nice to haves (flexible schedule, can work from home, sick and vacation days…). So if you are trying to hire top talent, even though you don’t want to deal with employees and all of the crap that goes with them, you may find that you will actually have to employ people, which, as described above, certainly has its benefits.
The goal, as with any new member of the team, is to increase the Company’s ability to earn revenue as a result of the hire. So if you have 1 person flipping burgers for you at 30 burgers an hour, more than likely, a second person could increase the number of burgers flipped per hour, ideally by 2, but more than likely, more than that. So by preparing more burgers, the Company has the ability to sell more burgers, thus demonstrating an increase in revenue potential as a result of the hire. And that is why it is done.
So…faced with this crossroads, which way do you go? Do you invest in an employee with the understanding of having an opportunity to earn more revenue? Or do you stick with your contractors,, who may be working for the guy down the street? Or is there a third option?
The answer is, really, up to you and your business. It requires understanding laws around HR, the needs of your business – in both the short and long term, and the ACTUAL relationship you have with those who work for you (sometimes we hire contractors then treat them like employees, putting us and our business at risk!). In the best scenario, you will use your strategic plan with your financial model and be able to determine – based on capacity models – how much staff you need at any point, and when and how to attract and retain them.
Rick Meekins is the Managing Consultant at Aepiphanni, a Business Consultancy that provides Management Consulting, Implementation and Managed Services to business leaders and entrepreneurs seeking to improve or expand operations. We are the trusted advisor to those seeking forward-thinking operational and strategic solutions to help them plan for and navigate through the challenges of business growth.
If you are ready to discuss how Aepiphanni can help you with business strategy, overcoming challenges to growth or any number of business solutions for your business, whether a small, growing or established company, contact us directly or submit a request for a complimentary Coffee & a Consult to learn how we can help you CREATE | DESIGN | BUILD an Extraordinary company.