It’s August. You’re making your way through the busy season, and you’re inundated by work. You know that if you had another set of hands helping in the field, you could get a lot more done – maybe even enough to pick up a few extra jobs before winter sets in. But as an independent contractor, you’ve grown your business on your own. So, how do you know when it’s time to hire your first employee?
The decision isn’t black and white. If you hire too early, you’ll likely bring yourself cash-flow problems, an employee who has nothing to do during the slow season, and the added stress of management.
On the other hand, if you hire too late, you could miss that critical market moment to grow your business in accordance with your goals, or you might disappoint customers by missing job completion dates.
So, let’s break it down. First, it’s important to consider the reasons why you might not be ready to hire.
You aren’t ready to hire if…
- You’re deciding based only on the work you have currently. Take a look at your business trends. Is your work steady, or does it come in bursts? If you’re considering hiring an employee simply because of the work that’s directly in front of you, you’re opening your company up to be strapped for capital later down the line.
- You’re not sure exactly what role you’d want the new hire to fill. It’s easy to think “I need help with everything!” in a moment of stress. But the best employees have a focus to hone in on, and a specific skill set to develop. Think about the gaps in your business – if you’re a general contractor, maybe you could use a siding expert. If you own a lawn care business, it makes sense for you to focus on neighborhoods A, B, and C while your employee takes care of neighborhoods D and E.
- Your buddy needs the work. It’s happened to all of us – you’re just focused on getting through the last push of the busy season, when your friend comes along in need of a job. It’s easy to say yes, but in the long run this could cause your buddy to miss other, more permanent opportunities. It can also cause unnecessary stress on your business’ bottom line.
Start out by hiring a subcontractor or seasonal employee
You’ve thought it through and you definitely need an extra set of hands on site. But, you’re not sure that you’ll need the same amount of help year-round. So, test it. Instead of hiring a full-time employee, try out a subcontractor or a seasonal employee.
“Salary isn’t the only commitment you’re taking on when you hire an employee,” according to the team over at Quickbooks. “You also need to pay taxes on the new employee’s wages, and include benefits. Calculate the costs for hiring a new employee before you place that job ad. If the numbers don’t support a full-time employee but you still need help, consider hiring a part-time employee or working with (other) independent contractors to meet your job deadlines.”
Make sure the subcontractor or seasonal employee fits the same parameters you’re looking for in a year-round employee. You can create a short-term contract, and when the time is up for you to reevaluate the contract with the sub or seasonal employee, ask yourself these three questions:
- Is this sub helping the company or holding us back?
- Can we use a position like the this for the long term?
- Do we need more?
If the answers are positive, it’s probably time to transition this person into an official hire, or look for a full-time employee. It’s been said that the only two purposes of an employee are to: 1) make money for the business, or 2) save money for the business. If you feel confident that your new hire will do at least one of those two things, go for it.
And when you are ready to hire your first employee, the Constructyv app is here to help keep your team organized. You can schedule your team, keep track of time they’ve spend on the job, and easily connect it all to QuickBooks. Learn more here.