2/18/2019 0 Comments
Yes, it’s a title of an iconic movie, starring none other than Madonna. And yes, Susan was the second most popular name given to baby girls in late 1950s. Susan is also a word we’ve given as a substitute for that “perfect” new hire for your company! From now on I prefer Susan.
Timing has a lot to do with the change today, but is only a part of the solution. In our line of work, and I guess in all lines of work nowadays, change is both a constant and a factor for success. But change is hard. After all the books and blog posts you’ve read and seminars you’ve attended, making actual change is difficult since we are biased to the status quo.
We change as a company all the time. And we are helping our clients change. So we are used to working with Susans. If you’ve been nervous around Susans before, you need to change your attitude. Yes, bringing on a new Susan can seem a bit intimidating and sometimes she’s all over the place, but once you get to know her she will be a great friend. And let’s admit it: you need her as much as she needs you.
With that being said, timing is everything in business—including knowing when to bring on a new hire. Hint—it’s often sooner than you think.Think back to when you first launched your business. Did you ever imagine a time when you’d need to bring new people on board? Now that your company is growing, you may be wondering, is now the right time to hire?
While timing is everything, positive growth can be a source of stress. After all, change can upset the balance you’ve created up until now. But if you want your company to get to the next level, it’s best to acknowledge any concerns you have about bringing on more people.
You have to be careful when hiring because hiring too soon and having to let them go, the cost to train them is on you, the business owner, and that’s a burden. Also, you have caused that individual to lose out on an opportunity.
How can you be certain that it’s time to bring on a new hire at your small company? Fortunately, as our experts show, there are a variety of ways to verify your instincts and time it right--and keep your business humming.
Map Your Company’s Growth
The biggest indicator that it’s time to hire is to forecast your company’s growth, says Jodie Shaw, chief marketing officer at The Alternative Board, a peer advisory board service that provides advice to growing businesses, headquartered in Westminster, Colorado.
“Many business owners make the mistake of growing first and hiring second,” she says. “The truth is, it can take six to 12 months to get a new hire up to speed on your business and allow them to acclimate to your culture.”
Shaw recommends mapping out your company’s milestones. Be realistic about your growth targets that you expect your business to reach in the coming year. Once you’ve completed this task, plan to start your hiring process about eight months before that resource will be needed. When you’re ready to hire, a job ad on your social media sites as well as national and local websites can help you quickly find the talent you need.
“That way, the impact of this growth on business operations and the people within your organization will be seamless, and your business will be ready to handle the growth,” she says.
Take Note of Employee Workloads
Another sign that it’s time to hire is when you look up and notice that your employees, or yourself the solo entrepreneur are busy--really busy. Perhaps you were too busy yourself to notice.
If so, your next step is to verify that the elevated levels of work you’re seeing are sustainable. If you confirm that the boom will last, then it’s time to hire.
Once you see an increase in job orders over an extended period of time and are using a lot of overtime try keep a pulse on the whole team. If they’re happy taking overtime, we buckle down and get it done. But sometimes it’s too much.
Here are some of the signs that you and your staff are overworked:
While you determine if the increased demand you’re seeing represents a new growth stage for your business, consider bringing on temporary employees or contractors to help pick up the slack.
Account for the Value of Your Time
As a business owner, you take pride in being a jack of all trades. Yet it’s all too easy to get bogged down in operational details which will distract you from focusing on business development and lead generation.
If that’s a familiar scenario, then it’s a great time to hire
If you’re the CEO for a growing startup, you need to take things off your plate that are not generating revenue for your company.
As a business leader, focus your time on things that will grow the business, not administrative or operational tasks. Think about what your time is worth as CEO—are the things you’re spending time on worth that much?
The solution? Consider hiring someone who can handle tasks at a lower pay grade, allowing you to work on crucial business development.
Listen Carefully to Clients
Your customers are a valuable source of revenue—as well your canary in the coalmine to help you determine when it’s time to hire a new employee.
Here’s how it works. If customers—or potential customers—consistently ask about services they wish you provided, or request large orders that you just don’t have capacity for, it’s an indication of greater demand for what you offer.
While this is a good problem to have for a startup, there comes a point when it’s time for your business to expand to fulfill present needs as well as projected ones.
As part of your startup checklist, regularly communicate with clients to ask whether they’re looking for wider service offerings and how you can meet those needs. Keep track of these requests to determine when it’s time to bring on a new hire.
Monitor How You Feel About Your Work
Your own stress levels can tell you whether it’s time to bring someone else on, says Mori Taheripour, principal at MT Global Strategies LLC, a business consulting group, and a faculty member at The Wharton School, University of Pennsylvania, where she teaches negotiation and conflict resolution.
Taheripour suggests that you ask yourself a simple question—do you still enjoy being a business owner? If the stress you feel could be mitigated by someone else handling a portion of your workload, it’s time to find that person.
“If you’re no longer able to enjoy doing what you do because you’re so busy being stressed and catching up and worrying, then that’s a sign,” she says.
Remember—growing pains are natural outcome for any company. How you handle that growth will, in large part, determine your company’s success. Take the time to assess your decision to hire. You should feel both confident and proud about hiring new team members. And remember to keep the process as simple as possible by using one of Monster's customizable job descriptions.
Ready to Add Partners to Your Company? Here Are 5 Things to Consider
If you want to add partners to your business to meet your growth goals, there are ways to help make sure you and your future partner are on the same page.Do you want to add partners to your business?
If you're considering it, remember: Having a business partner is a lot like being married. To that end, there are many healthy, positive, long-lasting marriages. And conversely, there are toxic relationships that can crash and burn.
Before you add partners to your company, you may first want to have an accurate understanding of your value and the value of your business. The following are five points to consider before entering into a partnership for your company:
1. Ask yourself if your potential new partner shares your vision. What is your new vision for your company and does the prospective partner share that same perspective? If your vision is to become the next Microsoft or Google, what is your strategic plan for that growth and most importantly, does this person agree that the vision is obtainable?
Not only is it important that you both share the vision for the overall goals and objectives for the company, it's also important to come to an agreement on which actionable steps will be required to execute the vision.
2. Conduct a SWOT on them and yourself.As previously mentioned, before you can add partners into a company, you may want to do a thoughtful and reflective analysis of you and the company. Using a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis can help.
For instance, I have mentored dozens of businesses who are technically proficient in what their company does (i.e. IT, creative arts, non-profits). However, they acknowledge that they have weaknesses in other areas, such as finance or human resource management. How do you know the difference between: a) training for yourself to strengthen your weak area, b) outsourcing to a third party or c) bringing in a partner to shore up the deficiency?
Before you make a decision, consider seeking out a financial business consultant, particularly one who can both review your financials as well as do a thorough analysis with you to determine whether a partnership is the correct avenue to take. The worse course to take may be to make a decision based on a temporary set of circumstances, like a cash-flow shortage. Giving up your company to someone who may solve a temporary problem may create a long-term result you don't want. Contact BSBS, if you still have any thoughts of brining on a partner today!
3. Address what your exit strategy will be in the partnership agreement. Unlike in marriage, the conversation about exit strategies is completely appropriate when you're entering a business partnership—after all, it's business, not personal.
However, all too often, in the honeymoon phase of partnership discussions, the partners do not want to discuss what will happen if the relationship doesn't work. However, there should be clauses in your partnership agreement that address issues such as retirement, disability, death, the withdrawal of a partner and dissolution. I recommend also discussing insurance—particularly "key man's insurance," life insurance for the company's point person—in the event that a partner dies or becomes permanently injured.
4. Decide between offering equity versus non-equity distribution.It's clear that many people consider partners when it comes to capital contributions.
"Equity partners for bigger projects [are] the only partners I would entertain," Shane Pomajambo, owner of Art Whino, a Washington, D.C.-based art gallery.
When you have a well-functioning company, you may not want to bring anyone in who could upset the proverbial apple cart. Say your goal may be to have a larger cart or seven carts, and you don't have the resources to expand on your own. Offering a limited partnership may be an appropriate option for you in that case.
5. Determine what everyone's roles and responsibilities are before you add partners to your company.Whatever the reason you are considering a partner, it helps to clearly articulate what roles you each will have going forward.
A big mistake that people can make is assuming that the partner will know their roles and responsibilities. Consider writing everything down, especially what your current responsibilities are and what you envision they will be when the new partner comes aboard. Have as many discussions as needed until you are both clear about operations moving forward. Misunderstandings and assumptions can destroy an otherwise successful business.
Employees or Contractors? Hiring for your Photography Business
For photography business owners (and any small business owner), having people on your team is a natural part of growing your business. Whether you have other photographers shooting with you, people editing your images, or someone handling administrative work, it’s likely that at some point you’ll pay someone else to do work for you.
The biggest question, then, is whether these people are employees or contractors. There are two primary considerations you should be aware of before deciding.
Tax implications based on your decision.
How this decision affects your working relationship with team members.
Hiring an employee means withholding state and federal income tax, Social Security tax, and Medicare taxes. In most situations, you also pay unemployment taxes too (there are some exceptions).
Hiring an employee means paperwork! You’ll need a W-2 and an I-9 completed for each employee, records of their wages and hours, documentation that you’re complying with federal labor regulations, and the ability to file returns.
The cost, paperwork and workload for hiring independent contractors is vastly different from hiring employees. When hiring contractors, you usually file a 1099-MISC form for any contractor that is paid more than $600 a year for performing contracted services. You don’t withhold taxes, and there’s much less paperwork. For those reasons, photographers often hire anyone who does “anything” for them as a contractor. Unfortunately, the IRS has a more strict definition of which is which!
Facts that provide evidence of the degree of control and independence fall into three categories:
Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
Financial: Are the business aspects of the worker’s job controlled by the payer? (These include things like how a worker is paid, whether their expenses are reimbursed, who provides tools/supplies, etc.)
Type of Relationship: Are there written contracts or employee benefits (pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the individual performing a key function of the business?
Speaking of the IRS, if you have a question about whether someone qualifies as an employee or a contractor, you can ask the IRS for a determination of the worker’s status, using form SS-8. It’s worth asking if you’re not sure. Afterall, failure to classify a worker appropriately can result in big penalties. If you missclassify an employee as a contractor, you can end up paying taxes AND penalties!
A good guideline is: if you’re “hiring” someone to work “for you” in your studio, then they’re probably an employee. Classify them correctly to avoid penalties.
To dig deeper into Tips for Taxes, check out this helpful article on Your Complete Guide to the 1099.
About Business Solutions by Design and our new photographer based articles: We’re bean-counters and proud of it! Everything you’ve ever thought about people who look at numbers all day? It’s all true, and we love it. We are a team of bookkeepers dedicated to helping photographers.
We love spreadsheets, profit and loss statements, and balance sheets. Even more important, we love photographers. That’s why we created our new venture, because we believe that photographers should be photographers, and bean-counters should count beans.
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