Can I Afford to Hire Someone?

You’ve had three 15-hour days in a row.

You can’t remember the last time you saw your family or sat down for a “real” dinner (no, chips and dip don’t count!).

This is the 3rd time you’ve canceled plans with a friend.

And the business you started, the one you’re passionate about and feels like your life’s calling, is starting to cause you an unreasonable amount of stress.

The good news is that you have a lot of business.

The bad news is that it has become apparent that you can’t do it all alone.

This situation comes up a lot, especially with entrepreneurs that are used to rolling up their sleeves and doing everything on their own.

And while that might work at first, it is usually not sustainable.

Things start to slide, mistakes are made, and that feeling of being on overload becomes predominant.

Hence the question, can I afford to hire someone?

There’s no easy answer.

Hiring someone means you have a responsibility. An individual has accepted a position in your company and is counting on receiving a paycheck for the work they do and assuming they do good or great work, it’s not an unreasonable assumption!

They’re going into the position with optimism and high hopes, and you should be too.

Here are the expenses that must be considered before you hire a new employee.:

1. Salary: This is the primary cost of hiring a new employee.

2. Benefits: There are several types of benefits that you may need to provide, including health insurance, retirement plans, paid time off, or sick leave. The costs of these benefits can vary widely depending on the level of coverage you provide.

3. Payroll taxes: As an employer, you will need to pay payroll taxes, including Social Security, Medicare, and unemployment insurance. These taxes are typically a percentage of the employee's salary.

4. Recruiting costs: If you use a recruiting agency or job board to find candidates, you will need to pay for their services.

5. Training and onboarding: You may need to provide training to the new employee, including orientation, job-specific training, and ongoing professional development.

6. Equipment and supplies: You may need to provide the employee with equipment such as a computer, phone, or other tools necessary for their job.

Of course, the costs associated with bringing in a new employee can vary based on the position, salary, and whether benefits will be part of the package.

Before deciding you must review the following:

1. Budget: You should have a budget that includes the costs of hiring a new employee, including the employee's salary, benefits, payroll taxes, recruiting costs, training and onboarding costs, equipment and supplies, and workspace expenses.

2. Revenue: You should consider your revenue, cashflow, and projections for the future. If your business is growing and you expect to generate more revenue in the coming months or years, it may be feasible to hire a new employee.

3. Time: Hiring a new employee takes time, and there may be delays in generating revenue from their work. You should factor in the time it will take for the new employee to get up to speed and begin contributing to your business.

4. Skills and expertise: Consider the skills and expertise that the new hire will bring to your business. If the new employee can help your business grow or become more efficient, it may be worth the investment.

5. Competition: Finally, consider the competition in your industry. If other businesses in your industry are hiring new employees and you're not, you may fall behind in terms of growth and profitability.

It’s a tough decision.

Can we help? Our clients look to us to help them evaluate their situation.

Please reach out if we can offer you advice.