Expansion

Have you done it? How?

[vincevincevince]

We have a team of two working full time, both co-owners. We have lots of work, more than we can really handle, so we have been using some friends and contacts to take on extra work, on a project by project basis.

We currently work from the ground floor of the place we live, as do many web development teams. The 'outsourcing' contacts are generally outside of the UK.

However, we're looking for advice on how to actually find and keep a full time member of staff. Have you done it before? How did it work out? Another concern is that it will be hard to pay the 'going rate' due to the size of the business. However, I think that a new hire should increase business as well as take up the extra work from us - and pay for his or herself to some extent?

I am really looking for some advice from those who have been in the same situation before.

[Automan Empire]

Try thinking of it in terms of this person having specific duties to increase company revenue by some multiple of their wage.
In other words, instead of, "If we bring in a full time employee to take up our slack, can we afford that?" aspire to, "If we hire someone to do [these jobs we are passing on] for $X it will bring in X times 2 revenue, plus they can help pick up other slack."

It took me quite a while to get my businessman hat on straight (after 15 years as an employee.) One thing my accountant taught me is, EACH employee must be producing revenue in excess of their wage... otherwise they have no reason for being there. (Support employees that don't directly produce revenue but are critical for company operations have to be scutinized carefully for efficiency.)

When you make the leap to a full time business with employees, it is a big step! I grew too much too fast and almost went under before heeding the above advice. You should know more or less exactly what work needs to be done; the challenge is choosing the right person for the position, and really managing them so that they produce far more than they cost. If you cannot pay "the going rate" to a worthwhile employee (or yourself for that matter) then there is a problem with revenues, therefore probably prices, in the business model. Once you have employees, you will have to jump your prices; the main obstacle to this tends to be psychological. It isn't fun, or a hobby anymore, when you have employees. Learn not to be afraid to charge what you have to.

One thing to ask yourself: Are you prepared to work ON your business, but not IN your business? THAT is the mindset a successful entrepreneur must cultivate.
Good luck, and think of all the unsuccessful light bulbs Edison made before...

[vincevincevince]

AutoMan Empire, thanks for that advice.

I think you have made my realise that I'm not looking so much to gain employees, as I am looking to increase capacity. And some good questions about revenue...

[ckarg]

A key decision is to define the role you're hiring for.

If you intend to stay a two-man business, but want to get more work done, then you can hire someone for menial tasks, e.g. admin, make coffee, follow up on invoices. But your work will have to pay for this 'overhead' person.

If you intend to grow the business, you need to hire 'front-line' people. If you're in AdWords optimization, you need to hire someone to do AdWords optimization. That's the only way they will pay for themselves.

And whichever jurisdiction you're in, make sure you put all of the legally required stuff in place (e.g. contract, staff handbook, etc.). If something goes wrong, and you haven't done all of the employer stuff properly, you'll quickly find yourself with an unproductive employee, lots of legal issues to deal with, and no time to focus on your business.

I ended up never hiring employee one, but went for employee one and two at the same time. After all from their perspective its a bit strange to be the only 'employee'. This also gave me the excuse to do all of the employer stuff properly.