From Solopreneur to Team: The Courage to Grow a Team

From Solopreneur to Team: The Courage to Grow a Team

Many small businesses reach a tipping point – they need to grow but are concerned whether they are making the right decision about taking on someone. Can I afford it? How can I manage them? What happens if it goes wrong?

Taking on your first employee is a significant milestone for any small business. It marks the transition from a solo operation to a growing company…which can be both scary and exciting in equal measures.

The exciting bit…

The positive impacts of your first employee should mean an incremental upside to your business. Firstly, increased capacity means your company can handle more work, take on new projects, and support an increase in revenue. The new hire may bring additional specialisation so you can delegate tasks that require specific expertise, thereby improving the quality of your services or products; they can also prevent dilution of your time by taking on tasks you previously had to manage yourself. Additionally, even though you still have to manage and support the employee, it should result in better time management whilst giving you more headspace. You can focus on strategic planning and business development rather than day-to-day operations.

Hiring your first employee also opens up growth potential. That means the opportunity to scale up your business with someone who supports expansion in sales, marketing, or customer service. Or they may concentrate on production of products or delivery of services, giving you more time to look at increasing revenue.

Improved customer experience, resulting from better customer service and satisfaction, should lead to higher retention and referral rates; whilst streamlining processes and procedures with the help of an additional team member can enhance overall operational efficiency and profitability.

One of the most overlooked aspects of a new employee is the experience and approach they can bring, giving fresh perspectives and ideas, fostering innovation within your business. Spending time bouncing problems, ideas and solutions around injects new energy and focus – but don’t think the most efficient way is just to do this by Teams or Zoom as this lacks immediacy and feedback. Being face-to-face will pay dividends to the upwards trajectory of your business.

The scary bit…

Deciding whether to hire your first employee involves a careful evaluation of your business needs, financial readiness, and long-term goals. A decision tree can help you navigate this process, starting with identifying the need for additional resources.

If you’ve found you have been turning down work due to a lack of time, or getting bogged down in administration, invoicing and bookkeeping, it may be time to consider hiring – but at what cost?

Start by assessing your financial readiness to ensure you have the budget to cover salary, benefits, and other associated costs, including National Insurance and pension contributions. It’s also important to calculate the break-even point to understand the incremental revenue required to cover these costs and expenses.

Defining the role is crucial; clearly outline job responsibilities, required skills, and qualifications to attract the right candidates. Familiarise yourself with the basics of UK employment law and regulations to avoid legal penalties, and ensure you have the necessary insurance coverage, such as employer’s liability insurance. Setting up payroll involves registering as an employer with HMRC and establishing a system to handle taxes and deductions – your accountant can usually assist with this.

Finding the right person can feel like pushing a snowball uphill.  The recruitment process means deciding where to advertise the job, how to screen applications, and conduct interviews. How long will you advertise for – 2 weeks? More? You might use a mix of job boards, social media, and recruitment agencies, or ask your network. Once you’ve selected a candidate, you have to verify their right to work in the UK.

One element small business owner’s may overlook is that they are also being interviewed by the candidates; this is your opportunity to sell yourself, your vision, values, and business to the candidate as much as they are selling themselves to you.  Bear in mind the temptation to overpromise or oversell. The reality is that if the candidate joins and the role is not as expected, or future prospects seem less, this can lead to a disgruntled employee – which can and will affect performance.

They will need a written employment contract outlining terms and conditions, including job title, salary, working hours, probationary period, and notice period. Don’t think you can cover all this yourself unless you have the expertise – it does need professional help such as from a HR consultant, or organisations may give guidance such as the FSB (Federation of Small Business) or ACAS.

Finally think about when they start. Develop an onboarding process to help the new employee integrate into your company. Decide what your expectations are for the first week, 30 days and 100 days so they know what they must do to go up the learning curve quickly. If they need specific training, arrange this before they start so they can get up to speed as soon as possible.

Don’t forget to set objectives and schedule regular updates and performance reviews. It may pay you to set a series of objectives specifically for the probation period so you can measure their development.

The takeaways…

Hiring your first employee involves a number of risks and financial considerations:

• Finance: Committing to an employee’s salary and benefits can strain your cash flow, especially if revenue fluctuates. Run a cash flow forecast and breakeven analysis for the new starter. This will give a clearer understanding of the budget that includes all hiring costs, on-costs, and a contingency for unexpected expenses.
• Legal: Non-compliance with employment laws can result in legal penalties so you will need to provide a clearly written employment contract and verify the candidate’s right to work in the UK. You will need professional support for this if you haven’t the experience yourself. Ask an expert or consider resources such as the Federation of Small Business who have document libraries available to members.

• Culture: Hiring someone who doesn’t align with your values could lead to tension and reduced morale. As an intangible this can be difficult to check during interview, but don’t overlook it. Ask scenario-based questions at the interview which would give you insights into how the candidate approaches various situation and aligns with your values and culture.
• Performance: After defining job requirements and screening candidates effectively, write a series of questions to ask all candidates at interview so you can compare each applicant. The new hire may not perform as expected, impacting productivity and profits, so set and manage objectives for their probationary period as well as for their recurring appraisals.
• Training and Development: Investing in training will incur cost, especially if the employee leaves shortly after, but consider this from the benefits – taking a new employee up the learning curve quickly will ensure they are more productive and revenue generating. Before they start, develop a comprehensive onboarding programme and establish regular feedback sessions.
• Location: You will need to spend time with your employee, with their induction and meet regularly. Many small business owners underestimate the time required, especially if they plan to work from home. Face to face is imperative, so you may need a location with space to meet, hot desking or indeed your own private office. Being in the right environment, with other companies of similar size, is a benefit to business. It gives a fresh perspective and opportunities for growth and development.

The balance…

Taking on your first employee is a big step, but with careful planning and consideration, it can be a catalyst for growth and success. By understanding the strategic implications, mitigating risks, and following a structured hiring process, you can set a strong foundation for your growing business. Whether you choose to hire a full or part-time employee or even a fixed-term contractor, ensure that your process and decision aligns with your business needs and long-term goals. In doing this you will be prepared as much as you can be, and the upsides can far outweigh the initial investment.

To find space to work with your new employee, whether a virtual office, hot desks or your own private office, check out www.epicentrehaverhill.co.uk, where you will also receive free and unlimited business support.