When Julie Subotky started her professional planning company, Consider It Done, in Aspen, Colorado, she delighted in doing everything herself. An executive needed to charter a private jet? She took care of it. A couple wanted to throw a lavish New Year’s Eve party but didn’t have the time to organize it? Subotky attended to every detail. But by the time she moved her thriving business to New York City in 1998, one thing was becoming abundantly clear, she recalls: “I was going in way too many directions and I needed to start hiring people if I was going to keep this business going.”
There comes a time when many small business owners realize that no matter how talented, energetic, or passionate they are about the company they’ve created, they’re going to need help running it. Hiring that first employee is a critical next step in expanding the business and allowing entrepreneurs to focus on the areas of the company in which they truly excel.
“There’s only one reason to hire an employee,” says Gene Fairbrother, president of MBA Consulting Inc., a Dallas-based firm that specializes in start-ups and small business issues. “Does that position add profitability to the bottom line?” Fairbrother is quick to point out that there are several ways to accomplish that. Ask yourself: Will the additional help add to the revenue stream, as in the case of a store owner hiring a salesperson or two? Or, if you’re a consultant or attorney, for instance, does hiring a bookkeeper or marketing person enable you to delegate those functions and therefore increase the time you have to generate more revenue for the business? “Both scenarios add to the bottom line of the business, but do so in a different way,” he explains.
Have a plan
Making the decision to bring on employees is only half the battle, say the experts. Finding the person with the skills that will best complement you—and the business—is the real challenge. “Most small business owners are terrible at interviewing,” is the blunt assessment of Ben Dattner, consultant and author of The Blame Game, a book that looks at the role of who takes credit and assigns blame in determining a business’s success. “They operate under the illusion that they’re better at it than they actually are and that makes them shockingly inaccurate in hiring the right people.”
One of the most common mistakes small business owners make in the hiring process is not having a written description of the position they’re looking to fill. “If you don’t have that, you’ll never find the right person because you don’t really know what you’re looking for,” says Dattner.
The first employee Subotky hired was an assistant, a decision she would reconsider today. “I wanted to offload some of the things I was doing,” she explains. “But I think a better strategy would have been to hire someone with the skills and strengths that I had less of. I can do the bookkeeping for my company, but it’s not my strongest suit. A lot of small business owners tend to hire people we like and who are similar to us when what we really need to do is hire people who have different skills than we have.”
Fairbrother suggests writing down the basic duties of the position and the skills needed to perform the job. Clearly, a bookkeeper requires a different skill set than an IT person, but without some sort of checklist for each position, it’s difficult to compare and contrast potential hires, he says.
Be patient—and listen
Once the interviewing process begins, let the candidates do the talking. Despite the urge to regale each potential hire with the story of how you started the company, your job is to listen, says Fairbrother. “As the interviewer, you should be listening 75 percent of the time,” he says. “If you’re talking, you’re not really learning anything about the person in front of you.”
Dattner suggests starting with these interview questions to gauge not only skills, but also how well the candidate will fit into your organization:
- In what ways will this role help you stretch your professional capabilities?
- What have been your greatest areas of improvement in your career?
- What’s the toughest criticism you’ve ever received and how did you learn from it?
- What are people likely to misunderstand about you?
No matter how impressive a candidate may seem, Fairbrother cautions against making an offer after the first interview. “Most small business owner hate interviewing so much, they want to hire the first person that seems right for the job,” he says. “The first round of interviews is to eliminate the people you don’t want. The second round is to select among the best candidates. Call references. Get input from your other employees, if you have any. But above all, take your time. Being rushed often results in hiring the wrong person and then after a few months of misery, having to go through the whole hiring process again.”
Along with a written description of the position you’re looking to fill, another good idea is to create an employee policy manual. The very act of putting one together, say the experts, forces a small business owner to think about—and define—the payroll, vacation policy, benefits, and performance evaluation process that you want for your business.
Subotky says no detail is too small to spell out. She recalls one employee coming to work in sweatpants because she knew her day involved office work. “Even if I had wanted her to meet with a client, I couldn’t have sent her out the way she was dressed,” she says. Now, Subotky explains in her employee manual how her six employees are expected to dress for work each day. “I think people want to know what’s expected of them even in a small company,” she says. “I know it’s helped me to have an employee manual because it makes it easier when I bring on a new person. Everything is in writing and easy to refer to.”
Perhaps the most difficult aspect of hiring your first employee is coming to terms with what it will mean for you, the small business owner. Dattner counsels entrepreneurs to ask themselves if they truly are ready to change and adapt. “Hiring someone means ceding control of certain things,” he says. “You have to trust and you have to delegate.” That’s not always easy, as many small business owners will attest. But as Subotky says, “I do believe it’s the only way to really grow your company.”