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| How to (and when): Take On Staff |
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It is possible, even desirable, to start up in tough times, but your chances of success increase if you are prepared to listen to those who’ve been there before and survived. For John Sollars, founder of Stinkyink.com, this is his second recession and he’s on his third business; the first two failed but the third is thriving. In a series of articles, the entrepreneur highlights the lessons he has learnt. One of the most difficult and exciting decisions any new business owner must make is when to take on staff, and even more importantly in what role? The key issue is deciding at what point you actually need somebody else to help. Is the current business spurt you are enjoying a blip which will return to normal in a few weeks, in which case you cope, or is it a trend which you need to address.
"The key issue is deciding at what point you actually need somebody else to help."
A wise old man once told me that "you'll never make money unless you employ people" and he is absolutely correct. However, there is always a nervousness about taking on staff due to factors like employment legislation (which let's be honest, most people don't understand), tax and managing a payroll. It is a hurdle that you have got to face at some point, but if done correctly, you and your new employee will both benefit. As an aside, I'd recommend outsourcing the payroll, or ask at a networking meeting for recommendations for payroll specialists. I have always used my accountants for this and it is one of the most cost effective outsourcing solutions you can have. It also means that when the Revenue call and ask to see your employee records you can refer them to your supplier and let them have the hassle of correct record keeping. Where to find good staff The first thing to consider is whether you need permanent staff or whether you use an agency. The agency route has worked well for me as you can often take someone on for a temporary three month contract, then make them a permanent employee if their performance is up to scratch. The other benefit of using agency staff is that as your business ebbs and flows you can increase or decrease the number of people to suit your particular requirements without any penalties to your own business. The only down side is that you are obviously paying agency fees. In the early days of my printer ink business, I tended to find people locally that I either knew or were recommended to me, and indeed that is still a very important recruitment option for me. As things got more technical and I needed particular skill sets then I have turned to specialist recruitment agencies. Be warned though, I often get seven or eight people booked for interviews, of whom three will actually turn up! A contract is crucial The single most important thing you can do when taking on new staff is make sure that they have a contract of employment. In fact, it is a legal requirement to issue a contract within two months of an employee starting with you. This protects both of you and should define the employee's job role and description and also, exactly what disciplinary procedures are in place. I know it is bureaucratic and time-consuming, but believe me, I've been dragged through an employment tribunal and you don't want to go there! I got my first contract template from Business Link and am still using it. Defining what you want My first two appointments were both pretty close together; I took on a part-time book-keeper to get on top of my paperwork and a sales assistant, which is what I thought I needed. My first decision was pretty much accurate, but for the second it transpired that I actually needed somebody to work in the stores and do some buying. Thus my 'sales assistant' (we shall call him Roy - for that is his name) is still with me nearly nine years later, but he morphed into my purchasing manager, which just shows what I know. And my part-time book-keeper turned into my full-time office manager (now retired). Those early appointments are critical because:
You may have heard a mantra that you "should employ the smartest people you can". What that translates into is you need to employ the best people you can afford, and then develop them further into the roles that you have.
It gets easier I now employ 14 full-time staff with a varied range of skills and have found that as the business develops, so employing new people becomes a lot easier. This is because:
At the start, when there were only a few of us, I could do everyone's job, and indeed had to cover for holidays and sickness. However, as the roles became more specialist I stopped being a 'jack of all trades' and actually started to focus much more on my own speciality: running the business. One of the key things I learnt as my business expanded was to examine the roles people play and see how I could develop or retrain existing staff to fill vacancies. This is especially relevant if you have a new position that is difficult to recruit for as it requires knowledge of the business or its systems. So...
John Sollars is the owner and MD of Stinkyink.com selling printer ink cartridges online. He’s passionate about business and regularly blogs his views and advice on BusinessZone.co.uk.
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