Without people you are never going to run a large business and without the right people you are never going to own a successful one. Employing people is not like buying a piece of machinery; as they do not come with money back guarantee or an instruction manual. You can’t just switch them on when you need to, or run them continuously for 24 hrs a day and then trade them in for a newer model at will. However employing the right people for your business can truly take you forward ahead of your competition. But before you decide whom, you need to decide should I?

Take Billy he is a self employed electrician and a very good one. He has spent 20 years working for large companies and had previously decided to set up on his own. He wanted a better quality of life, see the kids more and be in control of his destiny. He does great work and is much in demand, so he decides it is time to employ for the first time. He takes on 2 further electricians and a trainee to keep costs down. Within another 12 months he is now employing 10 people, including a secretary, for invoicing and answering the phone.

His turnover has now massively increased and he is now a true businessman with much respect in his local business club. But Billy is unhappy, as he looks down at his books and diary he realises, that although his turnover has increased, his profits have not, and is taking home pretty much the same wage as he did as a self-employed electrician. This is not all; he is working more hours and can’t take holidays in case something happens whilst he is away. His diary tells him, that he no longer goes onsite, except to fix work that an employee has not finished to standard. He is now a manager of people, a motivator, a social worker, a good guy, a bad guy, an administrator, but there is one thing he no longer is; that is an electrician.

Billy now has now learnt that it costs more than just wages to employ someone. There are insurances, courses, safety procedures, national insurance, work clothes, tools, travelling expenses and holiday pay etc. But one of the biggest lessons he has learnt is that none of his workforce ever works as hard as he hid, or has the flexibility that he had. He blames his workers for this, but none of these issues are his work force’s fault. They are entitled to be safe at work, have their national insurance paid and have holiday pay. And if they wanted to work as hard and have the flexibility of Billy, then they would set up their own business instead of being employed. This means that each job that Billy invoices for is no longer as profitable as the ones he used to do himself. Where as he would stay back and finish a job, his workforce wants to finish on time, then go back or charge you overtime. The list goes on and on. He has over 20 years experience of being and electrician, but not one day’s experience of becoming an employer at the point he took his first employee on. Even now, 12 months later he is still serving his apprenticeship.

Billy could have saved himself some grief by deciding why he wanted his business to grow as he had left employment for a better quality of life. He could have spent more time talking to his fellow businessmen about the real issues of employing people and not just those you read on a free brochure.

Then if he still wanted to go ahead, he then could have chosen whom he employed. Should he employ a manager for example, who has experience of managing people to fit in with his own needs, or take fewer people on and subcontracted some of the work out at busy times? A realistic business plan and cash flow predictions would have given indications of his potential earnings and what course to take, or even to decide if the extra commitment of employing was even worth it.

If you relish the idea of a large business, then you probably have no choice to employ, but make sure you do it right first time. Only employ those who want to be employed and trust me; family and friends are not always the best option. Understand the money factors to the full, and accept you will need to put extra time into your employee’s career and well-being. Heath and safety, pensions, employment law are all subjects you will now need to be an expert in and of course how to mange with respect. In most cases if you look after them, they will look after you, but when there are exceptions; deal with them quickly, professionally and to the law.

People do not just work for their wage packet at the end of the week anymore. How they are treat, their workmates, pride of work location, working conditions etc. all play a part in whether someone wants to work for you or not. And in some professions getting the right qualified personnel can be like gold dust, so you may have to give out more than you want to sometimes to keep their loyalty.

But get the right people, treat them well and you could take on the world!

Mark Flanighan
http://www.business-advisor.org/