It doesn’t matter if it is the first or last employee hired. Adding new team members to any small business can be nerve-wracking. Each potential staff member brings with them a whole new personality and skills. Additionally, each new hire requires an increased payroll and a proper financial plan to make sure the company isn’t hiring beyond its means.
There are several mistakes to avoid along the way, and dodging these errors is especially important for a new business trying to gain footing in a competitive market.
Hire the Right People
Making sure the correct employees get hired is a key to business success. There aren’t many decisions within a company that are as important, short of using the correct financial services. It may seem simple for a business owner to advertise, conduct some interviews, and then extend an offer. Despite the apparent ease of it all, many businesses make mistakes with the hiring process.
Because of all of the risks, the entire process shouldn’t be rushed, according to Forbes. Filling a position fast is a tempting prospect – it would mean less time is spent searching, and the company can begin producing quickly. A hiring search might appear to be a time-waster, but the more resources dedicated to finding a good employee, the better. A rushed hunt could result in hiring someone lacking the correct skills, a person with a terrible personality, or a person with a poor work ethic, Forbes states.
On the flip side, waiting forever could also be detrimental to a company. A common misconception is the idea of a perfect candidate who meets every qualification and checks off every skill. Waiting for the ideal person means passing over countless other qualified ones, which will hurt a company as much as rushing through the process.
Another mistake to avoid is going with the gut. According to Entrepreneur, relying on instincts is a poor way to make hiring decisions, especially when bringing in the first addition to a new company. There are several potential negatives to a potential employee, and many people can hide these under more desirable qualities. It pays to be safe and to do thorough research into every candidate. If a third party is hired to investigate a possible criminal past, the person under review is legally required to be informed in writing.
Managing Finances of a New Hire
Further, it pays to consider the cost of adding new workers to the staff. Every employee, from the first hired to the most recent, is an additional expense. Ideally, the right person will help the company and increase revenue, but without a proper financial plan, the monetary end of the spectrum can be ignored.
The U.S. Small Business Administration recommends getting an Employer Identification Number, or EIN, before making the first hire. Also known as an Employer Tax ID or Form SS-4, this document will assist a company with any tax-related reports. The EIN is step one to creating a solid business foundation, and the right financial services come next. Using banking properly is crucial to maintaining profits, and many institutions offer easy methods for tracking expenses.
Therefore, good data management helps every aspect of a company. According to the SBA, the correct tax records must be kept, and the IRS requires every business to hold on to employee records for at least four years. Consult the business’s tax advisor if any tax-related questions or concerns arise.
In addition to the proper paperwork, staying organized is one of the best financial tips. A critical element of a healthy and prosperous workplace, good record-keeping and informative ownership will help the entire company grow.