What if one in three microbusinesses in Maine hired one person? At last count, in 2009, Maine had 109,679 microbusinesses with no employees, according to data compiled by University of Maine economist James McConnon. If one-third of them created one job each, 36,560 people could go back to work and Maine’s unemployment rate would drop significantly. What if the “job creators” turn out to be the small, Main Street businesses that make up more than 80 percent of all businesses in the United States? If just one in three Main Street businesses hired one employee, the United States would be at full employment, according to Association of Enterprise Opportunity (AEO), a national organization that represents microenterprises.
AEO’s the “Power of One in Three” challenge aims at solving one of our nation’s most pressing problems — the lack of jobs — by supporting Main Street businesses.
Entrepreneurs who start a business do create at least one job — the owner’s. However, to grow beyond the startup phase, most businesses will need to add people. But the decision to hire an employee, subcontract out parts of business operations or bring on a partner is among the more challenging entrepreneurs make. Hiring means more government paperwork, more responsibility, additional costs in the form of wages, payroll taxes, workers’ compensation insurance and, if the business can support it, employee benefits. There is the risk of hiring the wrong person, finding the time to train someone to do the job and deciding what the new hire actually will do.
With all that is entailed, it is no wonder some entrepreneurs hesitate to become bosses. Here is a look at two business owners who made the switch successfully.
“Your business is an extension of you; bringing someone else in can feel intimate,” said Jennifer Moore Temple, co-owner of Clean Bee Laundry in Camden, as she reflected on her own experience of becoming an employer. When she and her partner and husband realized they had reached the market limits with their Buzzie Bee Diaper service (“there are only so many babies in Maine”) founded in 2005, they decided to grow their business by buying an existing laundry service. Along with the full-service laundry came three employees.
“Our first lesson was that a certain amount of transparency about the business, sharing the company vision at least, is important. These employees didn’t know the business was even for sale,” she said.
Faced now with managing others, she thought about what had worked for her when she was an employee. She developed job descriptions and systems for reporting that have allowed her employees to know the limits and responsibilities of their jobs. Having other people involved in the business also meant she and her partner had to clarify and separate their roles.
“It helps the team as a whole; they know who to go to [to] solve problems or to fill in when it’s their day off,” she said.
Clara Gardiner, owner of Harbor Hounds Kennel, also has written job descriptions for her employees.
“I love my business,” she said. But once her business started to grow beyond 14-15 dogs a day, she needed help just to give herself a break from the long days and weekends. Job descriptions helped to manage the work flow — who does what, when — but also helped her identify the skills and qualities needed in an employee. It is not just “playing with puppies.” Gardiner noted it can be hard work and has certain risks: Dogs can bite.
She used a network of local veterinarians to help her find qualified candidates to fill her positions. After a year and a half in business, she has three part-time employees including a groomer and a maintenance person.
Training employees is the hard part for Temple, whose full-service laundry employees go through a monthlong training period. “A lot of the work of the business is unseen; there is detail involved. It is a bit like parenting — you lay a foundation and mistakes can still be made. Meanwhile, you have to maintain seamless service to customers, then go back and retrain.”
Maintaining a professional attitude is important.
“I try not to get too involved in people’s personal lives,” said Gardiner.
Both of these owners-turned-employers use an outside firm to manage their payroll.
“You find the pieces of the business you are passionate about, and delegate the rest to others,” said Temple. “I still handle the diaper customers and customer service aspects of the business.”
We’ll look at other challenges and alternatives to hiring and growing a business in later columns. For those interested in becoming a job creator, here are a few resources to help get you started:
The SBA offers 10 Steps to Hiring your First employee at http://www.sba.gov/content/10-steps-hiring-your-first-employee and Nolo, a legal aid website, offers 13 things you must do at http://www.nolo.com/legal-encyclopedia/hiring-first-employee-13-things-29463.html
Both sites suggest you start with getting your EIN or employer identification number. For that step, go to the IRS for free EIN — beware of other sites offering EIN for a fee — at http://www.irs.gov/businesses/small/article/0,,id=97860,00.html.
Another site we liked, the Frugal Entrepreneur, offers a Guide to Hiring at http://frugalentrepreneur.com/2011/09/frugal-small-business-start-up-tips-step-9-hiring-your-first-employee/
Eloise Vitelli is the program director for Women, Work, and Community, a statewide organization that has provided training and assistance to start-up entrepreneurs since 1984.