Some sole traders are perfectly content to remain at a level where they make enough money to support the lifestyle they are happy with, and not think about taking on the extra responsibilities of bigger premises and employing staff. However, growing and expanding your business is an important component of most entrepreneurs’ business plans, no matter how small the venture in the beginning.
If you started your business on your own with no staff helping you out, it can be a little daunting contemplating the regulations and responsibilities involved in becoming an employer. To make the whole thing easier, find some time to draw up a plan covering all the aspects of taking on staff, which will guide you through the process.
What do you need?
Presumably if you’ve decided you need to start employing staff, you have at least some idea of what this person will be required to do. You should calculate the costs involved in paying a salary, tax and insurance contributions, and any facilities, equipment, perks, and bonuses you plan to provide. You also need to work out the optimum number of hours you require cover for, and the hourly rate you wish to pay. You will need to use these ideas to create a job description and person specification that detail exactly what the role will require and the most well-suited person for the job. There are plenty of examples of these documents available online that you can use as a basis for your own versions, and making use of web resources will save you a lot of time and effort and ensure you don’t leave anything out.
Employing a member of staff brings with it extra requirements for accurate and complete tax returns for the Inland Revenue Service. If you’re tempted to pay cash in hand and thus avoid the whole liability problem, remember you will be running the risk of facing considerable fines and sanctions should you not be declaring your financial situation honestly to the IRS. There is a wealth of advice and, of course, clear guidelines on how to employ someone on the IRS website, as well as independent guides from employer’s organizations, so follow these guides to make sure you’re correctly accounted for. There’s no need to buy expensive software when you have few employees, as there are online services that will take care of this work for you. For example, a pay stub generator will create individual pay stubs for your staff in accordance with legal requirements, saving you the bother of manually creating a stub yourself.
Don’t forget the importance of your role as manager of your new staff. Your interpersonal style and the quality of your leadership will be highly influential on the productivity of your staff, and if you haven’t got the required skills, you won’t be optimizing your staffing situation. Take some time to learn, or brush up on, your personnel management knowledge to ensure you are effective in your new role.