Many small business owners act as both an owner and an employee. When you’re hands-on, you’re more aware of when you will need more help. However, both overhiring and underhiring can hurt your business.
So, how do you know when it’s time to hire an employee (or other help)? Let’s look at the signs!
At CSI Accounting & Payroll, we’ve used monthly accounting to provide unlimited advice to small businesses for nearly 60 years. That means we’ve answered questions like these plenty of times:
This topic recently came up with a new client. Here were the four signs that it was time for him to hire:
Hitting one or two of these signs? This is an early warning that it’s time to hire.
Hitting three or all four of these signs? That means you’re already losing revenue or burning out. Hiring can take months, so start the process now!
If you still have hesitations, let’s talk about the consequences of overhiring and underhiring in the next section.
Whether you hire another employee or not, you’ll face the consequences of that decision. Let’s talk about:
Most often, small business owners worry about keeping a new employee busy long-term. Their worst fear is needing to lay them off after a few months.
Our recommendation? If work slows, don’t lay off your employee. Lay off yourself from handling employee work. Instead, work as the owner to find more jobs for your employees to do. Focus on marketing and sales.
The fear of overhiring can keep you in a bad situation, so don’t risk underhiring, either!
You might think most small business owners worry about hiring because they’re concerned about their budget, but that’s not usually the case. Most hiring results in an increased job capacity, eventually increasing profits.
If you hesitate to hire, the best-case scenario is that you stay where you are. You’ll continue to work as an employee, not having the time or capacity to grow. There’s only so much you can do with a set number of employees.
If you don’t hire but try to take on more jobs, your employees will feel overworked. They’ll expect higher pay, or they’ll just leave. You can easily find yourself stuck between a rock and a hard place.
Still not sure about hiring an employee? Consider temporary help instead!
What about temporary employees or independent contractors? If you’re looking at these options, it means you don’t want a long-term strategy, just short-term relief.
Do you have a seasonal uptick in demand? Do you need help with an internal project? Do you need to hire a service? If so, make sure you know the key differences between when you need a temporary employee versus an independent contractor.
It can be hard to make staffing decisions… or any decisions that can impact your business’s operations or finances. You already need bookkeeping and tax services, so why not roll them up with unlimited advice and a complete tax strategy with monthly accounting?!
Now that you know about the signs that you’re ready to hire an employee, the consequences of overhiring and underhiring, and whether or not temporary help can do the job, are you ready to get even more advice?
If so, please consider CSI Accounting & Payroll! To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about the differences between monthly and annual accounting by clicking the image below: