When Should You Start Hiring?
Is your workload starting to feel like it’d be enough for two people? Congratulations on being the owner of a growing business! But before you put up a ‘Help Wanted’ sign, here are a few things to consider.
If you own a small service company, you should begin hiring employees or independent contractors when (1) you really need them, and (2) you are prepared to manage them properly.
Many businesses have had more woes than expected when it met the first condition but not the second. Remember, the only way to get the full measure of value from your hires is to maximize productivity. That means minimal idle time, efficient scheduling, and tight supervision.
Let’s take a close look at both issues, demand and readiness, that you must consider before you begin hiring people
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Demand: Do You Need Workers?
You might be eager to grow your company, but bringing on employees too quickly can cause your plans to backfire. Naturally, you only begin considering hiring when you have more work than hours available to get the work done. But ask yourself, are you suddenly busy because of a random blip in demand, or do you foresee a realistic expectation of heightened demand for a sufficient period of time to make hiring worthwhile.
Remember, bringing on one or more new hires is going to consume your time. You need to find them, evaluate them, train them, and then manage them and their work. If they don’t pan out, you have to fire them. All in all, that’s a lot of preparation and work you need to perform in order to get value out of employees and contractors.
Another factor to consider is seasonality. If you run a business that does tasks like residential cleaning, snow removal, HVAC, landscaping/lawn care, or general contracting, you probably have learned whether some parts of the year are busier than others. Case in point: if a good deal of your work deals with sweeping and disposing of leaves, you’re going to be quite busy in the fall. Then you might switch to snow removal during the winter months.
Whatever your actual situation, you may need workers for only part of the year or in response to specific events, such as a snowfall or a storm. That probably means you want to hire independent contractors, keep them on during peak demand, and then wish them luck when the need is over.
In our example, you might find that you need different individuals for different tasks—maybe you need a very strong person for snow removal but can get by quite nicely with a reasonably fit person to rake and burn leaves. In any event, make sure you don’t let your enthusiasm cause you to imagine more demand than what really exists—that’s a sure ticket to grief.
Readiness: Can You Handle Your Workers
If you are used to doing all of the work yourself, are you prepared to manage others? First, you must organize your office so that you can track the activity of each worker since you probably pay them by the hour or by some unit of output. You’ll also be juggling more customers, and if you decide to hire employees rather than contractors, you have a whole new world of payroll taxes to consider.
Before your blow a gasket, bear in mind that your computer can help you with much of the additional work, as long as it has good software loaded, such as Jobber. You’ll want software that, at a minimum, provides these capabilities:
Job Scheduling: Good software will provide you with a job scheduling wizard that walks you through the process of scheduling and tracking jobs. Look for features that include map-view routing and optimization, sophisticated calendar management, and website integration.
Team Management: When you have workers to manage, you need to be able to track their assignments, their locations, and their times. Task assignment and verification is critical—you won’t keep your customers happy if your workers don’t complete all of the tasks assigned to them.
More Customers: If you hire more workers, it probably means that you have more customers. To manage them efficiently, you’ll need customer relationship management (CRM) software that lets you store and retrieve all of the pertinent information about each client, as well as issue professional invoices when you bill for jobs. If your company deals with items like pesticides or chemicals, you’ll want your software to track chemical usage.
Invoicing: As your company grows, you’ll need professional invoicing to keep your records straight for accounting and tax purposes. That means you’ll need to handle custom visit line items, synchronize with financial software such as QuickBooks, issue and track invoices, accept payments and ePayments, track expenses, and perform financial reporting.
This preparation in anticipation of your first employee may seem overwhelming at first, but it’s essential to think through demand and readiness before you jump into the deep end with a new employee who will be relying on your business to pay their bills.
That being said, you’ve built your business from the ground up, so hiring your first employee is exciting!