You’ve probably heard the quote before about hiring people that are smarter and better than yourself in business, but is hiring employees at all the path for you? When you are first starting out, the idea of hiring anyone can seem daunting. How do I set up payroll, how do I recruit someone, what if they’re awful, what are the legal requirements, how much more is it going to cost me? Those are all things that we can review at another time, but the first thing you must consider, is whether or not you are going to start venture thing yourself, or if you need some help.
''If you ever find a man who is better than you are - hire him. If necessary, pay him more than you would pay yourself.'' (1968 paper on principles of management) -David Ogilvy
So, where do we begin? There may come a time when that quote is all you need in making a hiring decision, but before considering which path to go down in regards to this, let’s look at a couple different scenarios.
Employee or Partner?
It may be that you’ve got your whole business idea setup, ready to roll, and you realize that all you need is labor to help execute your plan. For example if you’ve decided to sell clothing online, you may need people to take orders, pack them up & ship them out. The answer there is simple - hiring someone that can be trained to do the job, and for relatively low cost, is a great way to start. But what if you’ve decided to open a full-service dog grooming business, complete with day care, boarding and grooming, but you have very little if any experience with pets. Well, in that case, besides the obvious question of “why are you even doing that”, the need for a partner, rather than employees, is much more evident.
Perhaps you love business, are adept with finances, taxes, organizational operations, and getting things done, and you even love pets, but knowing how to groom or care for them is outside of your ability. Sure, you could hire people that already have done those things in the past, but in some cases it makes sense to partner up with someone who has skills in all the areas that you lack skills in. Finding a former veterinarian that just wants to start a new career with animals, and partnering up with them to bring all the knowledge you need to get a great, strong start, can mean all the difference between success and failure. While you will end up likely having to share more of the profits of the business than if you started the venture alone, having the partner there to begin with can mean more profits in the long run anyways!
Contractor or Consultant?
Another differentiation to consider, is the difference between employees or contractors. When first starting out, you are already in over your head on a lot of things. Having to manage the day to day operations of a business, the finances, the customer service - all can be overwhelming, never mind having to advertise a job, hold interviews, ensure legal compliance with their hiring, and agonize over their performance! In this case, contractors may hold the answer.
When we say contractors, we aren’t talking about the guys that come in and demolish kitchens and build new ones, but let’s use those guys for an example. When you need a big remodel job in your home, unless you’re super handy yourself, you are going to probably “hire” a “contractor”. See how the wording there is confusing? Are you actually “hiring” a contractor - or are you simply exchanging some of his or her time, skills and materials, for some of your hard earned money? When the job is done, you shake hands and part ways. This can be an extremely great way to do business too. Without requiring a commitment to long term employment, you can hire “contractors” that have specific skills and can do specific jobs. Once they have performed their task, you can move on, or continue paying them as long as they bring a value to your business.
Whatever you decide, employees, partners, contractors, consultants, and more all have various benefits and shortcomings. Decide which is best for your specific scenario and move forward!
Until next time,
BEN