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Having Employees - or not

Some businesses can't run without employees, but others can. If having employees isn't an absolute requirement for your business, you should think carefully before expanding beyond your one person shop.

Some new businesses automatically assume that there will be employees, if not now, then someday. Maybe they can't do it yet, but their goal is to have other people farmed out earning money. There are a lot of advantages to that model, but hiring people has its own share of headaches.

For a cautionary example, consider that I started my business as a one man shop in 1983. By 1987, I had five employees. My goal: a monstrous corporation, a large multi-story brick building with a big sign and an impressive logo. Sound familiar? Well, chasing that goal just about killed me, financially and emotionally. I am simply NOT a good manager of other people, and I'm far too optimistic about other people's work ethics. I had some good employees, but I also had some bad ones who were stealing both time and customers from me. I also had an apparently useless person who had plenty of talk, but nothing that ever turned into results. It took me far too long to see what was going on right under my nose, and far too long to act once I did see the problem. I was bleeding money and wasn't going to last. I did eventually fire everyone and was back to "just me" by 1989, but the damage had been done and it was hard, hard times from then on. I was in debt, very discouraged, felt like a complete failure, and found it very hard to keep putting one foot in front of the other.

After a rocky recovery, which included the painful necessity of having to work for other people for a few years, I started over in 1997 and have remained without employees since then. That's not always easy, of course. There are times I could use some help, and times that I'm very stressed by the volume of work that needs to be done. But for me, staying just like this is the best way.

Consider that once you have employees, you HAVE to meet payroll every week or every month. You'll have extra expenses too, like Workers Compensation and Unemployment taxes. The drumbeat regularity of those financial needs may force you into spending more time searching for new business and taking business that you really don't want: lower paying work, more difficult customers, slower paying clients. You'll also have the stress of being responsible for the performance of your employees: if they do sub-standard work, it is likely to be you that will have to go "do it right".

Some people do that very well. I have a friend who started around the same time I did; he has around fifteen employees and seems to be doing the right things. He'll tell you the same story though: that employee overhead forces him to take work he really doesn't want, forces him to put up with customers he'd rather do without, and is what drives his day to day life: he's still a "tech", but a tech who does more managing, placating and political maneuvering than anything else. He's good at that; I'm not. Which of us are you more like?

To go on, you also have moral responsibilies. Your employees will be depending on you and your company to give them that paycheck. You may experience a slowdown and have to trim back employees: it's not fun letting someone go when their work is perfectly fine and the only problem is that you can't find enough to keep them busy. Employees have bills to pay and sometimes children to feed. Your efforts provide the machinery that lets them get the money they need for those things; can you shoulder that responsibility? Oh, it's not so hard when everything is going right and the money is pouring in, but what about when things aren't so rosy? Can you handle it then?

Obviously many people meet these issues and do well with employees. It's not for everyone though, and you should consider these things carefully before adding people beyond yourself.



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