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The Worldwide Brands Home EBiz Newsletter: "Hiring Your First 'Employee' For Your EBiz" Go Back to Newsletter Home Page
This Week's Radio Show News:
Air Date: Monday,
April 4,
2005:
This Week's Featured Newsletter Article:
"Hiring Your First 'Employee'
For Your EBiz"
by
Chris Malta
What happens when your Home-based
EBiz gets busy enough that you no longer have time to run it yourself?
(NOTE: I am not an Attorney,
I have no plans to become an Attorney, and any information you see in
this Article is my personal opinion, and is not to be construed as legal
advice of any kind. Please do not act on any legal aspect of your business based
on any personal opinion of mine mentioned in this Article. You must consult an
Attorney and an Accountant for the correct legal interpretations in your area.)
There are only so many hours in a day. When you're
running your own Home-based EBiz as a "one-person show", chances are you're
still working your Day Job to bring in the regular income used to support
yourself and your family. If you DO have a family to support, it's even more
important to keep the Day Job until your EBiz income can be fully counted on to
take over that role.
At the same time, you're knocking yourself out more
and more during your off-hours, trying to build your EBiz. Marketing,
researching products, handling Customer Service, filling orders...it all adds up
as you get busier! That ends up costing you your remaining free time, quality
time with your spouse and kids, and so on. The more successful you become, the
less time you have in your life for anything but work.
Funny, when you started your EBiz, the plan was to
be able to work or yourself from home and have MORE free time, wasn't it? :o)
Well, the same thing happened to me when Worldwide
Brands began, many years ago. I've seen it happen to others we work with online,
and see it happening right now to someone we know well whose business is really
beginning to take off.
So, what do you do?
Well, the obvious answer is that as your EBiz gets
to the point where you have no more time in the day to grow it, you need help.
You need to keep driving the business and pursuing the creative, marketing and
decision-making end yourself, but you need someone to help fill orders, answer
emails, help with Customer Service, etc.
Some people are lucky enough to have family members
who can pick up some of the slack. That, of course, is your least expensive
option, since you generally don't have to pay members of your immediate family a
lot of money! You're all in there pulling for a common cause (supporting the
family) and if you have a spouse or older children who can help, you can
generally get away with claiming that you need the (free or very cheap) help for
the benefit of the family. With teenagers, you may find that you need to pay an
increased allowance. :o)
Many Home-based EBiz Owners, however, don't have
this little luxury, which is really no more than a stop-gap solution anyway.
If you really plan on making a good living and
growing your business to the point where you can live very comfortably and
retire early on it, you're eventually going to need to bring in outside help.
There are three ways you can do that.
1. Bring in a Partner. You're going to find, if you
approach people you know for this kind of day to day work (good friends, for
example), that they're probably going to ask you for a piece of the business in
order to work with you. Personally, I would not recommend doing that for an
online product-sales EBiz. There's really no point in giving away a part of a
business that you created and built to a point where it's growing enough to need
the kind of clerical help we're talking about here. Partners are not for
clerical help; you bring in Partners for very specific professional needs that
you can't fill yourself.
2. Hire an Employee. If you are actually going to
hire an employee for your business, you're going to find that there are a
tremendous number of legalities to consider. First, you absolutely MUST become
Incorporated. Then, there are all kinds of standards and practices you need to
learn about and stick to very carefully so that you don't get yourself in legal
trouble if you miss some form you should have filed, or some state-mandated
employment practice that you didn't know about. Then there are all kinds of
extra things you need to pay for, not the least of which are tax liabilities and
unemployment insurance. Personally, my opinion is that hiring employees is
something that you should only do when you REALLY begin to expand, well beyond
the need for just one or two people to help out. When you do eventually get big
enough to hire "official" employees, I recommend using one of the better
"Co-Employment" services that are out there. They charge you a set fee per
month, and handle all the legal issues, hiring and firing, policies, payroll,
etc. Great way to go, but this should be reserved for the point when your
business becomes a larger concern that needs to be staffed by multiple people.
3. Contract for help. In my personal opinion, this
is the best way to bring in an extra person to help you run the day-to-day
activities of your business. When you contract with someone to help you, THEY
are the "contractor", and are responsible for all the legal aspects of the work
relationship. Let's say your buddy Joe has enough free time to handle the extra
work you need done, and is interested in doing it for a certain dollar amount
per hour. You would say, "Joe, I need you to go get your own DBA (business name
and license)". Then I'll pay your Business a certain number of dollars per week,
and you perform the services for me that we agree on. This is basically the same
thing as hiring someone to do some repair work on your home. If you need some
electrical work done on your house here in Florida, for example, you're not
allowed to do it yourself. Someone who is licensed by the state, and carries all
the appropriate insurance, etc., must do the work, or you are in violation of
the law. So, should you go out and spend a tremendous amount of time learning
how to be an electrical contractor, take the licensing exams, file a business
name, and do the work yourself? Or would you rather just hand a check to someone
else who already has a business, and have them do the work? In that way, THEY
are responsible for all their own liability issues, NOT you. So, you can bring
someone into your business to work or you as a CONTRACTOR, and simply write them
a check each week. All they have to do is go get a simple business name and
license, which is not time consuming or expensive. They are then responsible for
all their own tax issues and other concerns.
Of course, as I stated at the beginning of this
Newsletter, this is all my personal opinion. I've done all of it, from being a
Contractor, to hiring a Contractor, to hiring full-time employees, and I'm
passing this info on from personal experience. Before you do anything suggested
in this Newsletter, you should consult with an Attorney to make sure you follow
the letter of the law where you are.
The ultimate goal of most Home-based EBiz Owners is
to expand and grow to the point where your business is a profit center that WILL
allow you to retire comfortably someday, and very few of us ever get to that
point alone. Just be sure that when you DO bring on help, you think about it
carefully, and do it in a way that helps your business by providing more benefit
than cost.
Chris Malta |
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