says, “you’re going to have to buy office furniture, expand phone systems and purchase other equipment.”
Then there’s payroll: who will handle it and how? Deryl McKissack Greene, president and CEO of McKissack & McKissack (Greene’s family also owns a Nashville,
Tennessee, architectural firm of the same name), an architectural, engineering and management company in Washington, D.C., handled payroll herself for the first 18 months her business was in operation.
“In the beginning, I became a quick expert at payroll,” says Greene, who later hired an accountant and eventually a payroll systems company. “I didn’t want to become liable for any miscalculations in payroll taxes.”
Leaving a $100,000 salary at Howard University to start her own company wasn’t easy for Greene. In McKissack & McKissack’s infancy, there were a few years, she says, when, after paying salaries and expenses, she took home a salary of just $4,000 to $7,000 a year. Greene had used $1,000 to bankroll her business.
“It was a grueling experience,” she says. “But I knew what I was going into.” Greene’s company now handles more than $2 billion in business. Greene also helped keep her company afloat by following a good rule of thumb. She did, and continues, to track the company’s profit margin and monitor how much work it does each year. She also maintains a year-long projection of expected work. By doing this, she can assess how many employees she will need for the coming year.
With clients often taking longer to pay their bills than most entrepreneurs would like, many new business owners find themselves taking steps to safeguard against missing payroll. “I got a line of credit for $25,000 my second year, which helped me a lot in terms of ensuring that my six employees were paid,” says Greene. “But I can say that I have never missed a payroll the entire time that I’ve been in business. And that’s also because I didn’t spend any money unnecessarily.”
The process of hiring employees and deciding what shoes they will fill can prove daunting. Much more should be expected of candidates than just getting to work on time and completing tasks, however skillfully.
The interview process lays the groundwork. Thayer suggests asking as much about the interviewee’s work history as possible. He also suggests preparing a job description and outlining the type of personality you’d like to hire.
“The interview questions should be the same for every interviewee so that you can measure them using the same barometer,” he says. For example, you might ask what their most significant accomplishments have been since joining their present firm and where they see themselves over the next five years, according to human resources experts. (For a list of questions that are illegal to ask, see “None of Their Business,” Powerplay, September 1999).
A common mistake new business owners make is rushing to hire the nearest person, such as a relative or friend. If you fall into this trap, you may find yourself with an unqualified employee or face complaints of nepotism. Diamond also