| Each year, thousands of sole proprietors double the | | | | give his new employee equity in the company. But he |
| size of their businesses by hiring their first employee. | | | | believes it was well worth it. At last, he had time to put |
| But how do you know when--and whom--to hire? For | | | | together a marketing plan and go ahead with a |
| nearly two years, Carrie Wong did it all herself. As the | | | | much-needed website upgrade. |
| founder and sole employee of Practical Gourmet, an | | | | Since the hire, business has increased fivefold and the |
| Aurora, Oreg., bakery that supplies high-end desserts | | | | company expects to break $1 million in 2004. Ballus, he |
| to restaurants without their own pastry chefs, Wong | | | | says, "made up for the weaknesses I had, and I went |
| baked tiramisu and berry tortes in the kitchen, made | | | | back to figuring out how to expand the business. With |
| deliveries in her Subaru wagon, and still found time to | | | | all the competition out there, we had to really be |
| pitch her creations to ever more restaurants. | | | | focused on how to get customers." Byrne avoided a |
| But soon, local newspapers got a taste of her fancy | | | | common mistake of entrepreneurs: waiting too long to |
| desserts. Glowing articles appeared and business took | | | | make a hire. Consumed with staying afloat, many solo |
| off. By early 2003, Wong--a former marketing exec | | | | business owners miss opportunities to make needed |
| who founded her company after losing her corporate | | | | innovations to stay in the game, says Kelley. By the |
| job in 2001--was working 90-hour weeks and barely | | | | time they get around to hiring, it's too late. "Their |
| keeping up with demand. She no longer had time to do | | | | competitors have already made them obsolete," she |
| what she did best: marketing the business. "I got to the | | | | says. |
| point where I said, 'This is insane,'" she says. "I had to | | | | That's not the only thing dangerous about putting off |
| stop taking on any more clients or just go for it." In | | | | the decision. Wait too long, and you could be forced to |
| Wong's case, going for it meant hiring her first | | | | hire in a hurry, increasing the risk of ending up with the |
| employee. It's a necessary step for any maxed-out | | | | wrong person. That's exactly what happened to Loree |
| entrepreneur seeking to expand a one-person | | | | Taylor Jordan, founder of LTJ Associates, a |
| operation--but it's a scary move, fraught with all | | | | communications firm in Campbell, Calif. |
| manner of anxieties. How do you decide whom to | | | | Massively behind in her clerical work, Jordan needed |
| hire? What happens if business flags? "My biggest | | | | help but had no time to interview a slew of applicants. |
| concern," says Wong, "was, will the person I hire care | | | | So she hired a friend as a personal assistant. |
| as much about the business as I do?" Despite such | | | | Unfortunately, her new employee was less than |
| questions, each year an estimated 550,000 business | | | | conscientious, breezing into the office whenever she |
| owners become employers for the first time, | | | | pleased and often failing to complete important tasks. |
| according to government economists--taking one of | | | | After seven months, Jordan finally let her go. But she |
| the most difficult and important steps in their careers | | | | learned from her mistake. |
| as entrepreneurs. "Whether your business moves | | | | When searching for a replacement, she interviewed |
| ahead or not is really determined by the people you | | | | multiple candidates. When she found one she liked, |
| hire," says Jana Matthews, an entrepreneurship expert | | | | Jordan brought her in on a trial basis before pulling the |
| at Boulder Quantum Ventures, a consulting firm in | | | | trigger on the decision. "I wanted to be sure it was a |
| Boulder, Colo. "Unfortunately, people often mess it up, | | | | good fit," Jordan says. |
| big-time." That doesn't have to be the case. While | | | | You can reduce the risk of hiring a dud by bringing |
| determining whether--and whom--to hire will always be | | | | someone on as a consultant or contractor first, says |
| more art than science, there are several telltale signs | | | | Cleveland biotech entrepreneur Andy Lefkowitz. "That |
| that can help you decide when to turn two hands into | | | | way you can see how you work together before |
| four. Some of these signs are easy enough to spot. | | | | making a bigger commitment," he says. "If things go |
| Like Wong, you may feel there are not enough hours | | | | downhill with an employee, it's harder to go your |
| in the day to concentrate on the tasks you're best at. | | | | separate ways." Of course, any first-time employer |
| Perhaps you've missed an important call or failed to | | | | would like to get it right the first time. |
| ship a product because you're overwhelmed by other | | | | Donna Kelley counsels that the first priority often |
| tasks. "It may be time to hire when things are slipping," | | | | should be not a particular skill--most employees, after |
| says Donna Kelley, assistant professor of | | | | all, can be trained--but rather, an appropriate point of |
| entrepreneurship at Babson College in Babson Park, | | | | view. "Do they have a passion for the business that |
| Mass. "Or when you feel you don't have control over | | | | you're in?" Kelley says. "Do they feel they must |
| the business like you did when it was smaller." Make a | | | | respond to customers right away? Do they have the |
| list of the skills you need to run your company | | | | energy for the ups and downs of any small business?" |
| effectively, Kelley advises. Then list the things you're | | | | As for Carrie Wong, last November she found |
| best at. If there are big gaps between the two, it's | | | | someone who shares her passion. She met Todd |
| probably time to add some brainpower. | | | | Wieweck, who worked as a pastry chef at the tony |
| The kind of brainpower you add depends on whether | | | | Phoenician resort in Scottsdale, Ariz., at a charity event |
| you want to grow slowly or shift into a higher gear. If | | | | sponsored by local chefs. She talked to other |
| you're taking it slow, you might just want someone to | | | | candidates, but Wieweck remained at the top of her |
| relieve some of the pressure by performing the routine | | | | list. "This is the beginning of something big," says |
| administrative tasks that pile up, such as answering | | | | Wieweck, who joined Practical Gourmet late last year. |
| phones and opening mail. Picking up the pace, | | | | Now, Wong can focus on sales and marketing while |
| however, usually involves finding someone who has | | | | her new hire can run the kitchen. If it works out, |
| specialized expertise or who complements your skills. | | | | Wieweck will share in profits after two years. "It's |
| I don't have to be the smartest person in the world to | | | | important he's rewarded beyond the standard |
| succeed. I just need to be smart enough to hire the | | | | paycheck," Wong says. |
| right people to help me do it." That was the kind of | | | | To make sure her recipes never leave the company, |
| soul-searching David Byrne went through six years | | | | she had Wieweck sign nondisclosure and noncompete |
| ago. | | | | agreements--a wise idea for any entrepreneur whose |
| Byrne quit his corporate sales and marketing job to | | | | business is built on proprietary information. |
| found BatteriesDirect.com, which sells batteries for | | | | Now Wong is ready to get back to whipping up more |
| laptops and cordless phones over the Internet. | | | | business. After moving to a new 3,000-square-foot |
| Revenue at the Palo Alto, Calif., company had | | | | baking facility (she lives above the place), she's |
| increased from zip to $200,000 in just two years, and | | | | preparing to open an adjacent retail outlet. At the |
| he was having trouble keeping pace. New competitors | | | | same time, she plans to crank up sales of a line of |
| were emerging, and Byrne lacked the finance | | | | gourmet chocolates she's launched. And she's looking |
| know-how to wrangle better payment terms from | | | | to add more area restaurants as customers for her |
| vendors and figure out the most competitive pricing | | | | desserts. By the end of this year, she expects to hire |
| strategy. | | | | again--perhaps as many as four more employees. "I |
| So Byrne hired his first employee--Pamela Ballus, a | | | | don't have to be the smartest person in the world to |
| former colleague and finance whiz. To make the hire, | | | | expand this business," Wong says. "I just need to be |
| Byrne was forced to take a 25% pay cut, as well as | | | | smart enough to hire the right people to help me do it." |