That is the question that many small business owners are plagued with. Let’s face it, running a small business is hard! It’s even harder when you wear many hats, everything from customer service to laborer to the hiring manager.
As a small business owner, you think you are saving money by doing everything yourself, but what if that mentality is actually slowing down the growth of your business?
There comes a time for every business owner where you need to really define the goals of your business.
- Where do you see your business going in the future?
- What does your business need right now, and what does it need to be able to level up?
- Is your business meeting your personal financial goals?
- Can your business continue growing without hiring outside help?
That last question is the one we are going to talk about today.
I have a friend who started his own landscaping company. He does mostly lawn maintenance, but he would like to be doing complete landscape construction projects.
He manages his business out of his home, which works great for him, but we talk a lot about his business needs because he does everything, and I mean everything, by himself.
For the time being, this works for him, but the business takes up all of his time, and there are only so many lawns that one person can mow in a day. Not to mention doing all the bookkeeping, answering phones, and equipment repair and maintenance.
Currently, he tells me that financially he is doing great! His costs are low, and since he doesn’t have to pay for labor, all of that money goes back into the business.
This sounds pretty awesome, right? Well, here is the problem: in three short years in business, he has already gained quite a reputation. He gets multiple phone calls per day from new clients. But he has to turn down the work because, as I said, you can only mow so many lawns in a day, and there are only so many hours in a day. Even if he worked from sunup to sundown, he would still be turning clients away!
That means he is turning down growth for his business! If you have recently started a business or are in the early stages of a business, you know that the very first challenge you face is getting customers or clients, right? Can you imagine turning people away?
So what could my friend do to help grow his business?
He has two options:
- Hire an employee, or
- Hire a freelancer or contract employee
Option No. 1 – Hiring an Employee
There are good and bad aspects to hiring an employee, and it really comes down to what your business needs and what your goals are. But consider the following while making your decision.
The Advantages of Hiring an Employee
They are always available and ready, and you can assign odds and ends tasks that are not their typical job responsibilities because they are always there. They may also be more loyal to your brand and business, depending on the employee.
The Disadvantages of Hiring an Employee
Hiring an employee is expensive. You have to consider the cost of the actual hiring process, background checks, drug tests (depending on your industry), insurance, benefits, taxes, vacation; the list goes on. Beyond the expense of hiring an employee is the hassle of going through the hiring process of placing an ad and reading resumes and interviewing people. And at the end of the day, do you feel like you are getting what you are paying for?
An employee is typically on the clock for 40 hours a week no matter what. No matter if it is a light week, and no matter whether they have anything to do or not!
Option No. 2 — Hire a freelancer or a contract employee
The landscape of our economy has changed so much in the past few years thanks to the generation we call millennials. No longer are people choosing one career and sticking with it for their whole lives. No longer are people staying in the same company and the same position, waiting for an opportunity to find them. They are going out searching for it and searching for a better life for themselves.
This is good news for the small business owner because it means that instead of being forced to hire a full-time employee and endure the great expense that goes along with that, you can hire a freelancer or a contract employee.
As with anything in life and in business, there are good and bad things about hiring a freelancer or a contract employee.
The Advantages of Hiring a Freelance/Contract Employee
You don’t have the expense that comes from hiring an employee because you don’t have to have insurance for them or pay their taxes, and in some cases, you don’t even have to supply the equipment that is necessary for them to do their work. You also get what you pay for. For example, a full-time employee knows that they have 40 hours to get their job done. There is no incentive for them to work any faster, in fact, with overtime laws, they may be more inspired to work slower! For a freelancer, time is money and the more work they accomplish, the more money they make. So they are inspired to complete your project as well and as fast as they can so they can move on to either more work for you or work for their other clients.
Another great thing about hiring a freelance/contract employee is that they are small business owners just like you, so they know where you are coming from, and they want to see you succeed because that will help them to succeed. They may work for another client in the same industry as you and be able to make some suggestions about being more productive or more efficient or save money somehow. They may also become a great source of word-of-mouth for you.
The Disadvantages of Hiring a Freelance/Contract Employee
While a full-time employee is pretty much always available, a freelancer’s availability may not be as open. You may also have to make some changes to your processes and procedures to accommodate different schedules and different situations. For example, your invoicing process may currently be paper tickets; you may have to make them digital so they can be sent to your freelancer for processing.
You should always watch your back with an employee or a freelancer. Make sure that any confidential information is only shared if it absolutely has to be, and make sure that you have the ability to change any password to eliminate their access to your business or personal information.
How do you find freelancers that want to work for you?
The Google search volume for freelance jobs is about 100,000 per month, which tells you that the people are definitely there. Finding the right person is going to depend on you and what your needs are. You may also need to work with a couple of different people before selecting the one that is the best fit.
You can post an ad on Craigslist, Facebook, LinkedIn, or on any job board. You can also search those same places for freelancers or contract employees that are looking for work.
Hiring a freelancer may not work for everyone or every situation, but if you are trying to grow your business without increasing your expenses by much, it may be something to really consider. Even if it is just someone to manage your bookkeeping so you can spend more time doing the things that actually produce income.
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