Growing Pains

Hire the right employees to take your firm to the next level

and increase profits are key components of that evaluation. In most instances, freeing yourself of several responsibilities by hiring employees is a major step toward achieving those goals. Once you’ve decided it’s time to bring a staff on board, you’ll need to educate yourself about employment laws, finding the best employees and determining salaries before you can make the transition from being a one-man (or woman) operation to an entity with its own staff.

Making the Transition
It’s settled. You’ve decided to take your business to the next level by hiring employees. But how do you do it?

Harriet Diamond, president of Diamond Associates, a training and development company in Westfield, New Jersey, says self-employed business owners should look at hiring employees as serving a twofold purpose. The first is to increase profits. The second is to free yourself up to grow the business. She stresses that many times new business owners need the extra assistance but become overly concerned that they don’t have the cash flow or financial resources to hire people. As a result, they compromise the growth and professionalism of their business.

“The most important thing entrepreneurs should ask themselves is can they afford not to take on employees,” she says. “They have to ask themselves what clients are they losing because they’re overwhelmed and what clients aren’t getting quality service. Would these problems be remedied by adding employees? They should look at expanding their businesses and hiring as an investment and, if done right, the yield is going to be high.”

Kenton Clarke, president of Computer Consultant Associates, made a sound investment when he expanded his Southport, Connecticut, information technology firm, which netted $25 million in 1999, at a slow and steady pace. Clarke worked out of his home for 10 years, but soon saw the need to grow his company.

“You’re limited in how much further you can expand working out of the house,” says Clarke, who up until that point had operated and built his company with the help of outside contracted computer consultants. “I was running a $3 million business out of my home.”

Some of Clarke’s clients at the time included Philip Morris, United Technologies, Pepsi-Cola, IBM and Kraft Foods. After realizing he needed an administrative person, Clarke hired an in-house assistant responsible for accounting and recruiting new business by phone. “That freed me up to spend more time [developing] more accounts,” he says.

In addition to assessing the potential benefits of hiring employees, experts suggest seeking counseling for such matters as time and office management, securing loans, and legal and accounting assistance. The reality is that many self-employed people can’t afford the extra expense that comes with acquiring professional help. Thus, as many entrepreneurs will confess, in the initial stages of their business, they tackled most of these areas on their own.

“In the beginning, I didn’t get legal help,” admits Cwiklinski. “I would advise it now. I felt that attorneys were an expense that I did not want to take on. Legal advice, financial advice, those are protections,

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