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Should You Hire Someone?

When the work gets to be too much, you may find yourself toying with the idea of adding staff to help out. But do you really need help? First, ask yourself if you need to hire someone or just be better organized. If you're having trouble getting organized, try local libraries, community centers, or colleges for information or seminars on time management.

Can you afford an employee? Even if you know that you need the extra help, you'll still need to consider whether you can afford to hire a new employee. How do you know how much you can afford to pay? There's a tension between how much the employee's salary and benefits will drain your business's budget and how much extra money the employee's presence will bring in.

Look at your operating budget. How much slack is there in it? How much money could be cut from other areas, so you could use it to pay an extra person? Remember that you'll need to pay at least the minimum hourly wage, not only under federal law, but under your state's law. Don't forget about payroll taxes and legally mandated employee benefits, like workers' compensation.

Now, try to estimate how much extra income that employee would generate in the first year. It's not always easy. If the employee is going to sell your product or services, it will be easier to figure out how much extra income he or she would bring in than if the person is going to perform data entry or cashier duties.

But in the absence of a "cause and effect" relationship, consider other ways that an employee could generate extra income:

  • With an extra employee, would you have more time to market your services and expand your business?
  • Would an extra employee allow you a chance to produce more products or serve more clients?
  • Would an extra employee allow you to give your customers more efficient service or quicker delivery, with the result that higher quality would lead to more customers?

If the answer is "yes" to any of these, try to estimate how much extra business would be generated by more, faster, and better delivery of your product or service.

The math is simple. If you're fairly sure that the extra business would amount to more than the minimum salary of the employee, then you are in a good position to hire someone. If the added business does not outweigh the minimum salary that you would have to pay, then look for other alternatives to hiring a permanent employee.

Will you really save time? Once you've got someone to help out, you'll have all this extra time, right? Well, maybe. But don't forget, when you hire someone — especially when you hire for the first time — you have to invest a lot of time in the hiring process, in training the worker to get them up to speed, and in managing records.

If you're still sold on the idea of getting someone to take over some of your work, you'll need to determine your staffing options. There are several basic options to choose from and each has some pros and cons: