Business success tips from the pros (1)

Chief Everything Officer no more! 6 options to staff your growing business

Being the Chief Everything Officer is okay for some, but if you’ve got plans for growth or simply need an extra pair of hands, what are the best staffing options for your business?

Taking on full-time employees can be a risk. What if your growth strategy doesn’t go as planned and you’re left with payroll and other employee expenses to cover? Should you hire independent contractors or outsource key functions?

Here are some staffing options that you might want to consider, as well as some insights on the tax and legal ramifications of each.

by Caron Beesley, sba.gov Community Moderator

1. Hire your spouse or family

Friends and family may be able to jump in and support your business — given the right terms. Weigh the skills they can bring and what you can offer in return. Establish clear goals and objectives and offer fair compensation, and make sure you understand the legal, tax and labor laws that may impact your decision.

office-staff-watercolors (1)The following blogs offer advice to help you manage what has the propensity to be an explosive mix. However, with planning, good communication, respect for each other’s differences, and a clear separation of business from personal, you may find the formula for success:

2. Work with independent contractors

Hiring independent contractors or freelancers gives you the flexibility to get help when and as you need it from specialists in a particular field. Independent contractors are also self-employed, which means you don’t have the burden of handling payroll, employment taxes and the other obligations of managing employees.

The best way to find independent contractors is word of mouth and referrals. Ask around.

Tip: The IRS holds a big magnifying glass over companies that work with independent contractors and with businesses that misclassify employees as independent contractors. The reason? Statistics show that 30 percent of firms do this and that’s a big loss for the IRS in terms of employment taxes.

So be sure you understand what you can and can’t require of an independent contractor and make sure you’re not treating them as employees. For example, you can’t dictate when and where they conduct work. This SBA guide explains what you need to know: Independent Contractors vs Employees.

3. “Temp” staffing agencies

If you need to quickly staff a position with qualified and screened candidates, particularly administrative or support functions, temp agencies might be an option. But this can be an expensive way to staff your business for the long haul. Temp agencies take up to a 30 percent cut of the hourly rate that you pay and also charge temp-to-permanent fees if you decide to hire that person full-time.

Another important consideration is that temporary workers are also less likely to be invested in your business success than employees and even contractors.

4. Hire seasonal employees

If your business is seasonal, part-time seasonal workers are a must. The thing to remember is that unless you work with independent contractors, many of the laws and regulations that apply to full-time employees also apply to seasonal or part-time employees. For a soup-to-nuts understanding of what’s involved with hiring seasonal workers, such as what benefits must you provide, read Hiring Seasonal Workers.

5. Outsource business functions

Whether you turn to a virtual assistant for help managing your calendar, voice mail, and perhaps some basic bookkeeping, or you need help with core business functions such as accounting, marketing or HR, outsourcing can be a low-overhead option that lets you concentrate more on business growth and less on day-to-day distractions. These articles can help you in your search for outsourced help:

6. Bringing on employees

If you do choose to move forward with part- or full-time employees, you’ll need to make sure you are aware and compliant with a few key legal and regulatory steps – these 10 Steps to Hiring your First Employee from SBA can really help.


About the author: Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley. This article was first published on May 30, 2012.

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