How to know when to hire first employee for your business

During many of my years in business, I worked alone at home. It was satisfying and profitable, but one of my best decisions was to hire an employee.

Rhonda Abrams The Arizona Republic

Hiring your first employee is financially, logistically and psychologically challenging. A question I ask people who’ve been self-employed is, "Are you creating a business or are you creating an income?"

Nothing wrong with building a "business" that provides income; the overwhelming majority of entrepreneurs do just that. You may decide you want to build a company that multiplies the value of your knowledge and skills, creating ongoing value. That means getting help.

How do you know it’s time to hire your first employee? Most business owners wait until they can’t handle all the work. This means you’re going to be frazzled. Even worse, during the time you’re overworked, you’re going to turn away, or turn off, customers. You’ve almost certainly stopped prospecting for new clients.

Ask yourself: "How much time can I free if I get assistance? How much more money can I make?"

Getting help doesn’t mean immediately going out and getting a full-time employee. You can start with a part-time worker or out-source tasks. One of the biggest time-gobblers is handling financial matters such as generating invoices, paying bills, entering data. Can you find a reliable, trustworthy outside bookkeeper to do most of this? Think how much easier it will be when it’s time to prepare taxes.

My first "employee" was a part-time administrative assistant. Wow! Suddenly, instead of me waiting in line at the post office or packing up boxes, I could be doing my work, generating more income.

It also meant I had someone working out of my home, someone I had to tell where I was when I was out of the office. That was a difficult adjustment. To be honest, it kept me more focused. That meant I made more money, even though I was paying someone else as well.

I was fortunate that my first assistant, Ann, was a joy. Together, we started figuring out what the job entailed and how I could use her to maximum advantage.

One lesson I learned from Ann was the importance of hiring someone you click with, especially for your first employee. That means finding someone with whom you can communicate easily. You want to feel comfortable having that person in your home or small store.

Before you look for your first employee, write down all the things you want that person to do. This likely will be unrealistic, or the wrong duties. Two biggest mistakes:

• Handing over too much authority.

• Not giving them any authority.

Recognize that you have to relinquish some control if you want your employee to be effective and satisfied. No one is going to be a miracle worker, solving all your business problems.

Prioritize what you’d like to have done. Be realistic. You’re not going to find someone who loves data entry who also excels at sales calls. Those are two different personality types. When choosing employees, here’s an important rule: Hire for attitude; train for skills.

To find applicants, start by networking with other business owners and through professional and entrepreneurial organizations. And don’t forget the classifieds. I found Ann by running an ad in my local newspaper.

Hiring an employee is an investment in your business. Like all investments, it means giving up something now for greater rewards later. Yes, you’ll have to take some money out of your own income. Yes, you’ll have to set aside some time for training. Yes, you’ll have to give up some privacy. In the long run, you can build a bigger, more profitable business, with the help of others than by trying to go it all alone.

Rhonda Abrams is the author of "The Successful Business Plan: Secrets & Strategies." To get free business tips, register at http://www.RhondaOnline.com, or write to her at 555 Bryant St., No. 180, Palo Alto, CA 94301.

http://www.azcentral.com/arizonarepublic/business/articles/0714abrams14.html