How to transition from solopreneur to employer without going nuts
By BARRY RUBIN, Live Local! contributing writer
For many sole proprietors, making the leap to employer is a gigantic undertaking with far-reaching regulatory issues and tribulations that keep even the most sound sleepers up at night. These steps will help them avoid the pitfalls of this exciting yet terrifying transition.
Clearly identify your business needs
Hire smart, not fast. Define a job description and salary range for the new position. Consider if outsourcing may be a better option. Remember to include all benefits, paid time off, bonuses, and other compensation that would be attractive to a potential hire. Calculate payroll taxes, benefit expenses and required insurances such as workers compensation and general liability where applicable to assure you are not over-extending the business.
Post your job opening
There are dozens of websites that will list your position for a fee or for free, including LinkedIn, Monster.com and more. But be sure to post offline, too, with local job services offices and college career services, which are always looking for opportunities for students and graduates. A help wanted ad in the local paper is classic, and still effective, depending on your industry. I have also found word of mouth from your network is a very good place to start. Before long you will have interested applicants, and are ready to move on the vetting and interview process.
As a small business owner you talk about your business all the time, but the during an interview with a potential employee it’s best to listen and ask the right questions. Prepare your questions ahead of time and make sure to cover the basics:
• Tell me about yourself
• How will you contribute to the company?
• What is an example of the biggest professional challenge you have faced?
Encourage specific answers, and wait for the potential employee to finish completely. The applicant’s thought process is as important as the answer itself. It’s also important to note that questions about race, color, age, marital status, gender, sexual preference, ethnic background, disabilities or country of origin are not only awkward, but illegal. Laws differ state to state, but avoiding these topics is best practice.
You did it. You made an offer to a potential employee and they accepted. First and foremost you must verify that each new employee is legally eligible to work in the United States. Have the employee fill out Form I-9, Employment Eligibility Verification. You are required to get each employee’s name and Social Security Number and to enter them on IRS Form W-2. To know how much income tax to withhold from employees’ wages, you must have a Form W-4, Employee’s Withholding Allowance Certificate on file for each employee. You also need a Federal Employer Identification Number (FEIN), and register with your state labor or employer division. Obtain Worker’s Compensation Insurance (if required), and post an “Employee Poster,” which is required by the Federal Government and most state and/or local governments.
Congratulations, you’re an employer
It’s time to set policy, for now and the future. You need to set expectations of the position, how hours are tracked and work is evaluated. Be patient and instructional on how you want things done, but make sure to listen, too, as new ideas are often better ideas. And after all, you’re paying this person to improve the business, so let them do that so you can continue to grow and add more employees. Then the whole process starts all over again.
Barry Rubin is president of the Gulfport Area Chamber of Commerce and president and founder of Time Systems, a technology company in St. Petersburg. He can be reached at email@example.com.
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