As we’ve discussed in some of our previous blogs, becoming an entrepreneur can be a fresh, exciting, and potentially lucrative way to restart your professional career! It’s a thrilling concept to become your own boss, to set your own schedule, and to focus on developing a business that you’re truly passionate about. However, like many things we’ve come to experience in life, the realities of being an entrepreneur, especially a new one with a small business, can be less glamorous than advertised. Getting a small business off the ground can be tough, and the “be your own boss” part has a flipside – as the boss, there’s no one above you and, if you’re going it alone without partners, there’s no one to help you carry the load.
Hiring Passionate Employees Can Be Tricky
One of the challenges that new entrepreneurs face involves recruitment and hiring. From the outside, recruiting and hiring good employees may not seem that difficult. After all, there are a lot of talented people looking for a job, and when you operate your business in an at-will state, you have the right to easily discharge the employee if things aren’t working out. However, recruiting and hiring good employees can not only be a complicated and expensive endeavor, but many entrepreneurs and business managers underestimate the costs, both monetary and emotional, that are involved with hiring and quickly firing a new employee. If you don’t follow a certain set of guidelines, rules, and regulations when hiring and firing employees, you and your new business could be quickly slapped with a civil lawsuit or regulatory fines, even if you don’t intentionally discriminate against the employee. Hiring passionate employees requires patience, discipline, and care, but when done right, you can build a team of employees that will work hard for you and take your business to the next level!
Before You Begin, Can You Afford Your New Employee?
It’s not surprising that, as a new entrepreneur, you are eager to begin growing your business, and one of the fundamental and usually unavoidable elements of growing a business is establishing or growing your workforce. However, before you begin writing up an advertisement to post to a recruitment website, you have to determine whether or not your business can actually afford to hire this new employee. If your pre-entrepreneurial job history involved working for other companies and people, you may have assumed that your cost to the company just included your salary and any bonuses or benefits your employer provided. However, as you will quickly learn as an entrepreneur, employees come with a dizzying and shocking array of costs that can greatly inflate the true cost of employing someone. Some of these taxes, fees, and costs can include Social Security tax, Medicare tax, federal and state unemployment tax, and workers’ compensation insurance. While that may already sound like a lot, that doesn’t begin to cover health insurance and any other fringe benefits that may be required in order to hire and retain a qualified employee in your market and industry.
Is Your Business Big Enough Yet?
Before you go through the hassle and expense of hiring a great employee, only to find yourself letting that employee go months later because you can’t afford to keep them employed, it’s important to determine if you truly have the funding and resources to make this position (if not the actual individual) a permanent part of your organization.