Do you run your business by yourself?

If you are running your own business and times are good, you might find yourself employing people to work for you, or to outsource certain tasks to subcontractors. Either way, you have taken a step forward by deciding that some elements of your business are better served being done by someone else, rather than bogging down the boss of it all.

But are you sure you are doing the right thing?

If you have thought about taking on more people to share the workload – or you have already taken that step – you will have given a number of things some thought. Of course, there has to be a reason to increase the workforce: there’s no point taking on another hungry mouth to feed without knowing that they will have enough work to pay for their upkeep, if you get my drift! It can be challenging to find the right balance between taking on another person too soon (the business does not grow as fast as you thought) or too late (business is damaged through late delivery or having to refuse work for lack of time). The waxing and waning of business coming your way does not make this any easier, of course, and at some point you might have to take a leap of faith.

There can be multiple reasons for taking on a new person, and I have already mentioned the most common one: hiring someone to share the workload with. But that is not the only reason to hire staff…

Depending on the type of your business, you will most likely have an administrative office, and often that part of your business will require specialist assistance. Imagine, e.g., a business that relies heavily on import/export of diverse materials: those kinds of business need someone who specialises in documentation related not only related to customs rules, but also to the rules governing the kinds of materials that are being handled. Most likely the business owner is aware of those rules, but cannot really spend most of his time dealing with the specifics of this issue. That requires a full-on specialist! There are many other specialisations with similar effect: just think of your tax returns, vat declarations, marketing, PR, IT requirements, … there are a lot of areas which could benefit from being taken care of by a specialist rather than by yourself!

Another consideration pertains to the need (or not) of having a permanent presence on the high street: some businesses simply need to have a shop, and that shop has to be manned throughout business hours. There is no point in having a shop that is only open 2 hours a day, it needs to be open when someone wants to approach you, and that ultimately involves taking in a person whose job it is to represent your company to whoever walks in. Don’t underestimate how important that first contact can be: the representative in the shop has to be on top of what you do and how you do it, and must be able to come across as trustworthy and knowledgeable. Not a simple thing to find! This ‘shop’ idea is not limited to shops selling things right away, but can take the shape of a physical presence that can benefit certain trades and businesses.

This being said, not everyone needs a shop, or even an office away from home, and there are ways to outsource these particular activities to freelancers of all types. Traditionally, things like accounting or marketing have been outsourced, but nowadays you’ll find Virtual Assistants doing all manner of online paperwork, agenda planning, travel arrangements, etc. You might have a cleaner coming in every day to keep the premises in working order. Or someone to bring in lunch each day after ordering for the whole week in one go. Or a bike courier taking care of your deliveries. Keep your eyes open and you’ll find a lot of room for outsourcing those little pesky, time-consuming tasks at little cost.

And that brings us to the important question:

Subcontractors or employees?

In the distant past, a subcontractor tended to be another self-employed person working the same trade – or at the very least something compatible or similar – depending on the needs of your particular project, while employees were taking care of the nitty-gritty of daily administration and production jobs. That separation still exists to some degree, but nowadays things are not as clear-cut anymore, and either level of engagement – employee or subcontractor – will do for all kinds of jobs. You might find a PA working as a freelancer for you, and a specialist in audio-visual equipment working for your electrician business, if that is where the bulk of your business lies. Sounds strange, but that’s the way things are today.

The main differences between the types of engagement lie in the legal requirements, the level of required supervision, the level of control and the level of permanence in the collaboration.

Hiring an employee might be a good idea for any task that you know will have to be tackled on a regular basis, by someone who specialises in that task, and where hiring and paying someone will ultimately free enough time for you to be able to invest that gained time into making enough money to pay the salary AND make a bit of a profit. Obviously, in some cases, you may not even be able to fulfil that task on your own: you may not know enough about accounting or vat declarations to do a good job, or you would lose an extreme amount of time over it.

An employee needs to be taught how to do their job the way you want it to be done, they have to be supervised to some degree, time has to be spent on evaluation, discussions, exchange of information, etc. All these things have to be taken into account. A subcontractor, on the other hand, also requires some of those things, but you would most certainly not need to spend as much time on training or discussions about the quality. If they don’t perform well, you can easily look for a replacement and let them go when that replacement has been found.

An employee tends to be more embedded in the company, knows more details about the business, and generally is working for you on a more permanent basis, where a subcontractor would usually be aware that any project will come to an end and then they’d have to look for something else to work on. An employee does not have that issue and might, therefore, become more complacent – if not lazy – over time.

Of course, the complexity of having employees and/or subcontractors also depends on the legal structure of your business: are you a sole trader, are you vat-registered, are you a limited company, etc…). These things need to be considered, ideally with the help of a chartered accountant who can tell you all about these subjects…

I hope this will spark some thoughts and ideas about the idea of hiring assistance, and I would encourage anyone to think about these things ahead of time. Don’t wait until you are overwhelmed with work and are in no position to consider these questions: better do it now, or when you have time to work it out!