Over the years, I’ve spoken with a number of small businesses in the wedding industry who are scared of hiring that first person to help them with their business. Aside from the financial investment it takes to hire an employee, it also takes an investment of your time and energy. I can proudly say that I have had 5 amazing people work for me in the last 3 years. And, each one of them has been outstanding. I would do it all over again
I hope to share some of my successes in hiring people with you. This week we are going to talk about taking on that first employee. (If you have already hired a few employees and haven’t had much luck, this week of blog posts may apply to you as well.) Today, we’ll talk about how to prepare for hiring someone. Tomorrow, we’ll discuss recruiting (placing your ad. Wednesday, we’ll talk about resume review. And, Thursday we’ll wrap it up with a discussion on interviewing
Are you ready to hire?
There are two major considerations to take into account when hiring a new employee. The first is financial: can you afford this individual? Here are some thoughts on being financial ready to hire:
- Do you have cash reserves for 3-6 months of your business? (This would be your emergency savings.)
- Do you feel that your personal financial needs are being taken care of?
- Will the work that this person does enable your business to grow? (Either they have direct impact on sales or will free you up to increase sales)
- Will this person be full-time or part-time? Will they be seasonal or year-round?
- Can you afford their payroll and their payroll taxes? (People always question me on the additional payroll expenses. For a part-time employee in the state of Washington, the payroll taxes equal ~20% of payroll. For other states it can be as high as 25-35%. If you have full time staff and want to offer medical insurance and vacation, this can be even higher.)
The second consideration in hiring someone is whether or not YOU have a commitment to this. So many people go into hiring an employee with fear and trepidation. They aren’t sure of the specific training and the specific responsibilities of that employee. Others don’t truly understand the ongoing mentorship that goes into hiring quality people. And, there are also a number of small business owners who aren’t ready to give up control. You must be willing and prepared to surrender. Allowing your employees to share control of your business makes them invested in your dream. Without that, you cannot have a successful organization.
What specific role will this person fulfill?
The book that changed my life (and my business) is E-Myth by Michael Gerber. In it, he discusses how small business owners often burn out after a few years because they are managing so many responsibilities as a small business owner. Think about your day. You are the President, CFO, VP Marketing, Sales Manager, Assembly Person, Technical Support, Customer Service, File Clerk, Copy and Coffee Girl, Errand Boy, Janitor, and Dishwasher.
In the E-Myth (Entrepreneurial Myth), Gerber discusses how we must define specific roles in our businesses. He recommends doing this even if it is just you. This is important in defining how your company works. So, try it out: Make a list of every role and responsibility in your organization. From there, create an organization chart. Or, if that’s a little daunting, create responsibility lists. For example a “Sales Manager” would be responsible for responding to client inquiries, setting appointments, meeting with clients, educating clients, writing proposals, and making the sale.
Once you’ve defined these responsibilities, you’ll have a better idea of where you can fit that first employee. For me, when I made my first hire in 2006, I really needed someone to help me with the hand assembly of wedding invitations. This person would be my “Assembly Lead”. I clearly defined the responsibilities and made certain that it fit with the overall structure and strategy of mmm… paper. This would help me later in placing my employment ad and eventually in training the new hire.
I was also able to crunch some numbers and determine whether her part-time hourly pay fit into my financial plans. Because her job is part of my cost component of building an invitation, am I appropriately pricing my goods? Does her pay fall reasonably within my profit margin? And, does her employment, free me up to work on other revenue building opportunities?
Do you have procedures in place to train and mentor this individual?
So, you are all set. You can already envision your first employee. You have already dreamt of how he or she will greet you at the door with coffee. This person will make all of your entrepreneurial ambitions come true! (Or maybe, they’ll make it so that you aren’t working until 3am every night.) But, how are you going to get from A to Z?
I think the largest mistake people make in the road to hiring an employee is not preparing procedures for training this individual ahead of the actual hiring. Most people think they can wing it. Or, that they’ll get through the interview process, and then work on the training procedures. It doesn’t work that way. You must have an idea of how you are going to train and mentor this individual before you begin recruitment. It’s an important part of finding the right person.
Here’s why you need to have training procedures in place before hiring… You will find a handful of people in your interviews who can do the job… but, what you need is someone who is eager and willing to learn. So, you should be looking for someone who can fit into your training plan. Anyone who is not willing to learn will not embrace your vision. And, you need to be prepared to teach them. I recently talked about being a mentor not a manager. This is most true with that first employee. You must be prepare to coach them in all there is about your beautiful little business. This relationship will lead to a mutually beneficial partnership. By having procedures in place before the hiring process, you are recruiting people who would be good mentees. You are recruiting individuals who fall in to your training plans, not just someone who fulfills a role in your business.
When I hired my first employee, the following below is what I did to create my training plan. It worked for me then, and I use it with every new person I hire. (That’s another great thing about having a training plan, it’s easy to use if your company is seasonal and you need to hire and train people on a frequent basis.)
- Create a list of everything you want to teach that person. If you can clearly define processes, then it will be easier to communicate what they should be doing.
- Now take a step back: I know you want them to do everything, but stick to the role that you defined for them. Compare your list to the list of responsibilities that you defined for their position in your company.
- Look at the list again: You’ve listed what’s in it for you… but, what’s in it for them? What life and careers lessons can you give this individual? (By emphasizing that you want to give this person training that will be useful for their life-long career, you are building upon that mentor-mentee relationship. This is important in creating a mutually beneficial partnership. This isn’t just about you. Trust me, this will pay off in the long run!)
- Create a schedule of the times you are going to sit with the new hire and teach them these things; allow for “independent study” and “work time”
A question of Your Time vs. Your Commitment
The commitment to take on new employees begins long before you place that first ad. You have to take a hard look at your business and determine how it is organized and how you foresee the future of your organization. Training and mentoring do take time. (I often hear from people that they are scared of taking on employees because “in the time it takes to train and manage someone, I could’ve just done it myself.”) But, the time it takes is not what you think. You commit of your time and energy into mentoring the person. If you do this properly, you will spend far less time managing the person. If you put in the heavy investment to build that relationship, you will spend far less time training, overseeing and supervising that individual. And, you’ll have a team of people that love your business nearly as much as you do!