Most businesses get beyond the one-woman (or one-man) show size at some point. Usually sooner than expected. When you are a solopreneur, it often becomes obvious that in order to grow your business you will need to expand.
The question is, do you hire an employee, or do you outsource some of the work?
This question is critical. Unfortunately, the answer is not always simple. It may depend on the service or product you sell, what your skill set is, what it is that you need help with the most, and a number of other factors.
To start, determine what is overwhelming you or not getting done. If it is taking too long to produce your product or service, then you will need someone who can help with that aspect of the business. However, if you can handle all the work but never seem to get your marketing done to bring in new business, then that’s a different kind of help.
If you need someone who can lighten the workload of producing your product or service, you will likely need an employee.
Someone else who is qualified to do what your business does, whether that’s making donuts or guiding bird watching tourists through the dunes. Either way, you need to have someone you can tell what to do and when to do it. This would need to be an employee.
However, if you’ve determined that having a social media campaign to promote your fabulous fortune cookies is essential, then you can hire an independent marketing person or company to handle that work for you. Since what they do is marketing, not cookie baking, they are classified as an independent contractor (IC) and can perform the work you need when and where it is convenient for them.
Another important variable to consider when making the decision of what kind of help you need, is whether you are working in your zone of genius when you are doing it or if you are struggling to do it.
Any time you feel like you are pushing a boulder uphill, it’s time to consider getting help with that task. Most entrepreneurs go into business because they have a passion for what they are producing. Stay focused on that passion as much as possible. It’s what lights you up and makes you want to keep getting up and going to work in the morning. If you find you are spending all your time handling the drudgery of running the business instead of creating your magical stained-glass windows, then it’s time to outsource some of the grind and get back to focusing on your specialty.
Another important factor to consider is the cost of the help.
If you hire an employee, usually the pay per hour is lower than an independent contractor, but you will also be required to pay payroll taxes, have worker’s compensation insurance, and perhaps have other costs such as added equipment. An independent contractor will generally cost more per hour but will come with the means to create their product or service so you will not be required to provide them with extra tools, etc. An independent contractor is required to pay their own taxes and have their own insurance coverage.
Additionally, an employee may require training whereas an independent contractor is responsible for knowing what they are doing and gaining additional skills in their field should they need them. If your business is specialized, and you need help in-house, then you may need to take into consideration what it will take to train an employee. Investing in an employee that will grow with your company can be a smart move if you anticipate you will continue to need their help over time.
If you only need short term help, then hiring an independent contractor to assist for the short-term may be more prudent.
Either way, working the extra cost into your budget ahead of time is critical. Knowing that you have the work to sustain the helper for the period agreed to is important. Don’t take on the long-term responsibility of an employee unless you’re confident that you will be able to maintain the demand for their services. If it is a one-off project that you only need short term help on, then using an IC would be the logical solution.
Moving your business to the next level is paramount to success for many small businesses, how you do it is up to you.
It is worth taking the time to formulate a hiring plan instead of just randomly hiring help without thoroughly assessing your needs and determining the best solution. Once you’ve made your plan, implementing it will be smoother and easier and you will end up transitioning to the next level more successfully.