When Entrepreneurs Make a Decision to Hire


By Paul Lin From Marketwatch


It's a bittersweet moment: the point at which entrepreneurs realize they can't do it all alone, no matter how many long hours, nights and weekends they burn through.

The customer base has grown just a little bigger than can be serviced without sacrificing quality. There are just too many orders to fill or too much product to manufacture, market and distribute without help. Chaos reigns as the small business swells to burst the confines of the basement, the dining room and kitchen call center. It's time for Mom and Pop to get some outside help, time to kick operations up to the next level.

To make sure that unmanaged growth doesn't hinder a young business, it's important to start with a business plan.

"The biggest reason for business failure is lack of planning," says John Miller, a spokesman for the New York district office of the U.S. Small Business Administration. "We recommend that people do their planning first."

Drafting a road map before you set out and finding time to write up a new one every few years can help the entrepreneur stay on course, he said. That means creating a marketing plan, determining what kinds of capital investments have to be made, when the business may break even and turn a profit and when you might be able to draw a salary.

Here are other strategies to consider, and where to turn to for help with them, as your small business grows:

Know when to hire

As the business grows, think about hiring employees to relieve some of the day-to-day strain. Find out what adding help will cost and how many people you can afford. It may be enough to just have someone around part-time to clean up, package the goods and make deliveries. That gives you more time for strategy and development.

Consider also what you want to keep doing after you delegate. If what excites you is the creative end, find out how to best stay involved. That may mean devoting a couple days to hands-on work while spending the rest of the time managing your business.

And think about long-term commitments such as employee health benefits and retirement plans. Find out more at www.firstgov.gov. Visit the Web site.

Find new financing to grow

Think of the small business overflowing from every large common room in the house. Or consider the tensions that can exist in your home office when your spouse needs you to do a chore when you have a project deadline coming up. Getting a clearly defined workspace is essential to making business work well.

Finding the money to expand can present challenges, especially if the only source of capital has been your own savings, or those of your family and friends. Banks are another place to turn to, and many offer special small business loans.

Look for loan programs that keep in mind the growing entrepreneur. If you're looking to buy land and build on it, the SBA offers its 504 loan program. Money loaned is paid back over 20 years at 2.25% over the prime rate. Three parties are involved in the financing: the SBA puts in half, a bank will contribute 40% and the business owner the final 10%. Check out the SBA online.

Learn from an expert

Take advantage of free counseling services like Score, the Service Corp of Retired Executives. Successful, retired business execs in 389 chapters across the country devote their time to giving free advice to startups that want to grow.

"They've been through all the ups and downs," says the SBA's Miller. "You can save a lifetime of hardship and misery by learning from their experience." Walk-in to Score's branches or try virtual counseling online. See the Web site.

Sell to the government

The U.S. government sets aside a quarter of all contracts for small businesses. That's an immense amount considering the U.S. is among the largest purchasers of goods and services in the world.

Miller recommends small businesses register with the federal government at www.ccr.gov so procurement officers know they exist. CCR stands for central contractor registration, and that includes the SBA and the Department of Defense. Go to the site.

Combined, government buyers purchase everything from "paper clips to janitorial services to construction to battleships," Miller says, adding that if you deal in food and drink, there's a chance that military base commissaries may need a special item. "You never know."

Beyond the federal government, small but growing businesses should consider what's available at a local level. Check out whether cities have clearinghouse sites that make it easier to get necessary permits and licenses in one place.

Or in smaller cities and towns, look into joining a chamber of commerce. Members can not only help spread the word about your business, but can also serve as mentors as a start-up jumps to another stage of growth.

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Simge Velipaşalar