Well, wouldn’t it be nice if we could do it all? But instead, since we know we can’t, let’s consider the value in finding the right people to contribute to our business to help it grow. If you’re new here or you have been listening from the beginning, Lindsey and I dove into how to find an ideal candidate for your team in Episode six if you are looking to expand your team. That insight that Lindsey gave might be extremely valuable. Today I am going to expand on that conversation and dove into the ultimate guide to growing your team as an entrepreneur, leader and business owner.
Now, through countless conversations with other like minded entrepreneurs and doing this myself, I have pulled together the top three questions to consider when expanding your team.
What support does your business need?
In order for you to successfully connect with the right individuals or businesses, you must first determine the complete scope of the role necessary to support your business. Often this really looks like finding the support for your business in the future, the future version of your business, what your business is going to look like next year instead of what it looks like right now. This will include recognizing the skills, time and resources that will be required for the role to make a positive impact on your business to get you to that next stage of your business.
Can this role help you grow your bottom line?
It’s important to consider what impact this role will have on your bottom line. This will help you budget for the team member that you are bringing on and anticipate the return in investment. Basically, did you get what you paid for and or of course, I like to think about it sometimes as well as what part that they will serve in my customer journey. I also like to consider how this will allow me to buy back my time so that I’m delegating tasks that either do not fill my cup or align with my hourly rate, which we discussed back in Episode 11. Plan your finances with intention, but leave room for magic.
Do they complement your existing business?
Hire someone who not only complements your business values, but someone who possesses a skill that your business is lacking so that they can help your business grow in the way that you quite literally could not before answering these questions, will not only help you determine the right time to expand your team, but help you document the role and establish expectations from the start.
The next step will be identifying if this new team member will be an employee or an independent contractor.
The classification of a worker as an employee or an independent contractor will determine whether you, as the employer is responsible for withholding and paying payroll taxes and of course, is subject to many state and federal laws. The workers classification is based mainly on whether or not you have the right to direct or control their work. The IRS has a largely subjective 20 factor analysis you can use to assist you in making the determination. And don’t worry, I am not going to just leave you with that. I will walk you through the main drivers that will shed some light on the classification.
If this still isn’t making it clear, then it may be time to dive deeper. The four main factors to consider:
- Will you be directing their hours?
- Will you be there only, quote, unquote, customer?
- Do you want to incorporate them into your daily business?
- Do you want your clients to see them as a representative of your business?
If you’ve answered yes to all of these questions, then you are leaning to an employee. If you answered no, then you are leaning to an independent contractor. A fundamental aspect for you to identify prior to expanding your team is how to protect and manage the expectations for the new team member and yourself. You have found the right person and you have classified them properly. If you need more information, of course. Tune in to episode 27, “Are they an employee or an independent contractor?” As an employee or independent contractor it can get a little bit complicated.
Now I want to focus on ironing out obligations, compensation and how to protect your business from liabilities that come with a new business relationship to ease the process and to create fluidity in your expansion. We have already prepared a customizable employee bundle. We have also prepared an independent contractor agreement. I’m even going to mention the virtual assistant agreement because I see so many of us leaning into that area as well. Those will help set clear expectations, and they include the following for an employee, the scope of responsibilities, what you expect from them. Expected hours and how many and what hours they will work, how many is important, especially if they are considered a nonexempt employee and therefore they may earn overtime. So you may want to have a rule that they don’t work overtime without written consent. Compensation, if they are salary or paid hourly, and if there is any bonus structure or profit sharing or commission and don’t worry, all of these structures are actually covered in our employee bundle. Confidentiality and this one is an important one.
Protect your information, your customer list and everything that you pour into them, which leads perfectly into your intellectual property, make sure that during their time as an employee that it is clear that you own the business. Any intellectual property that they create and last but not least, is no solicitation and non compete, protect yourself from them taking your team or customers when they leave.
Now, for independent contractors, the scope of their services, what specifically their services will include and get specific. The more specific, the better, especially when there are milestones or a specific timeline that you are working to, which leads into the schedule of deliverables. Try to establish hard deliverables and what their due dates are. The fee structure, how you will pay them for their services, whether or not it is project based hourly, a monthly retainer. The options are endless, but it is best to make sure that the scope of their services and the fee all coincide to create something that not only pays them and compensates them for their time as you work together, but is a way that works for your business and your cash flow.
Last but not least, the relationship of the parties, this is for tax purposes. Make sure you have a clause in there that says they are an independent contractor and they are not an employee who might have rights to benefits or tax withholdings indemnity. This is to ensure that the risks are placed with the right party. What it’s saying here is that who is going to be responsible and who will cover the costs should some problem or claim arise? And just like with your employee confidentiality, intellectual property and non solicitation or non competes are all very important because you want to protect your information that you pour into them and you want to ensure that they don’t leave and work directly with your customers or take your team when they leave you. You will want to make sure that the intellectual property they create is within the scope of their services is yours to use and own. Both the Employee Bundle and Independent Contractor Agreement and Virtual Assistant Agreement will serve as a legal foundation for aligning your team with the vision, the goals and, of course, the responsibilities that follow the business that you have so sacredly built.