Your First Hire Should Solve a Business Problem

Before you bring someone into the business, decide which work needs to leave your hands and what it will cost to do that. You can spend an entire day working in your business and still feel as though nothing important has been finished. Customers need answers, suppliers are calling, invoices are waiting to be sent and somebody needs to check the stock. Then the day ends, and you take the unfinished work home. This is often when small business owners start thinking about hiring.

The difficulty is deciding who to bring in. You might feel you need an administrator, but perhaps you are losing customers because nobody follows up on quotations. You might want another pair of hands in the shop, when the real problem is that deliveries keep taking you away from customers. Getting that decision wrong costs money. You end up paying a salary without fixing the reason you needed help in the first place.

Find the work that keeps falling behind

Think about the past week. What did you intend to do but never got around to? Which tasks did you postpone because something more urgent came up? Perhaps you promised three customers quotations but sent only one. Maybe invoices went out late because you were dealing with deliveries. Or you spent hours checking stock because nobody keeps the records up to date. These details tell you more about the job you need to fill than a list of standard job titles.

If customers are waiting for quotations, someone may need to take charge of preparing and following up on them. If deliveries are keeping you away from the shop, a driver could help. If your records are always behind, an administrator may be worth considering. There is another possibility: the business may not need a new employee yet. A part-time bookkeeper, an outsourced service or a better way of recording orders could solve the problem for less money. Before you recruit, be honest about what is causing the backlog.

One salary, two choices

Imagine you run a small business supplying equipment to other companies. You handle enquiries, prepare quotations, send invoices and organise deliveries. You can afford one new employee, but two salaries would stretch the budget. You are considering an administrator or a salesperson. The figures below are illustrative, not estimates of current market salaries.

Now look at what is happening in the business. Customers have been receiving quotations but rarely hear from you again. Some buy elsewhere. If you have enough stock and staff to handle more orders, a salesperson might be the right choice. But if customers are complaining about late invoices and you cannot keep your records straight, an administrator may be more useful. Neither option is automatically better. The choice depends on the problem you are trying to fix.

There is also a difference between making more sales and making more money. If a salesperson brings in an extra R30,000 in monthly sales, the business still has to pay for the products sold and other costs. Compare the additional gross profit with the employee's full cost before deciding whether the hire is paying off. For an administrator, look at what has changed in the way the business runs. Are invoices going out sooner? Are fewer tasks being missed? Are you spending less time correcting mistakes?

Some jobs bring money in directly. Others help the business run without constant delays. Both can be worth paying for, but you need to know what you are getting.

The salary is not the whole bill

An employee earning R8,000 a month does not necessarily cost the business R8,000. You may need to buy a computer, phone, tools or work clothes. There may be training costs, software subscriptions and other employment-related expenses. You will also spend time showing the person how things work.

For illustration, suppose the employee costs R9,500 a month once other employment expenses are included. Add R6,000 for equipment and setup, and the first year comes to about R120,000. These figures are examples only. Your actual costs will depend on the role and the expenses involved. Look at your cash flow before committing. Can you cover the salary in a quiet month? Will there still be enough money to buy stock, pay suppliers and cover rent?

You should also know what you expect the employee to contribute. That might be additional gross profit, fewer mistakes, faster deliveries or time that you can spend on work the business currently neglects. You may not be able to put an exact rand value on every benefit, but you should have a sensible reason for taking on the expense.

Take an hour to check your workload

You do not need special software for this. A notebook or spreadsheet is enough.

First 15 minutes: Write down what you do.

List the tasks you handled during the past week. Include customer calls, quotations, invoices, stock checks, deliveries, supplier calls and staff supervision.

Next 15 minutes: Estimate how long each task takes.

Use reasonable estimates. If you spend five hours chasing payments and six hours arranging deliveries, write that down.

Next 15 minutes: Look at what goes wrong.

Which tasks are often late? Where do you make mistakes? What gets left until tomorrow? Note anything that has led to a lost order, a customer complaint or a delay in getting paid.

Final 15 minutes: Decide what you can hand over.

Mark the tasks another person could manage with proper instructions. Separate these from decisions that still need your experience or approval.

You should finish with a clearer idea of where your time goes and what kind of help would make a difference.

Five things to settle before putting out a job advert

Before you start looking for candidates, answer these questions:

1. What needs fixing? Identify the problem the new employee will deal with.

2. What will they do? List the tasks they will be responsible for, rather than saying they must help with everything.

3. What should change? Decide what you expect to improve, such as delivery times, customer follow-ups or sales.

4. Can you afford the full cost? Include the salary, equipment, training and other expenses.

5. Who will train them? Decide who will explain the job, answer questions and check the work.

If you cannot answer these questions, hold off on the advert. You are likely to have trouble finding the right person if you cannot explain what the job involves.

Keep the job description simple

A job description does not need to be several pages long. It needs to tell candidates what they will be doing and what you expect from them.

Job title: Administrator, salesperson, driver, technician or another suitable title.

Purpose of the job: Explain what the person will take responsibility for and why the business needs the role.

Main duties:

• List three to six regular tasks.

• State which customers, records, equipment or processes they will manage.

• Explain which decisions they can make and which require your approval.

Expected results: For example, invoices must be sent promptly, deliveries recorded, or customer enquiries followed up within an agreed timeframe.

Skills required: List the practical skills, qualifications and experience needed for the work.

Reporting to: State who will supervise the employee.

Working hours and pay: Include the location, working arrangements and salary or salary range where appropriate.

Be careful not to turn one job into several. If you need someone to handle bookkeeping, sales, deliveries and general administration, you may be expecting too much from one person. That can make the position difficult to fill and the work difficult to manage.

Check what has changed after a month

Once the employee starts, return to the problem that led you to hire them. If you hired a salesperson, look at the orders they have brought in and the gross profit those sales generated. If you hired an administrator, check whether invoices are up to date and fewer tasks are being missed. Also record how much time you have recovered. If you hired someone to handle deliveries but you are still doing most of them yourself, find out why. Three simple measures are enough to start:

• Hours of your time recovered each week.

• Tasks completed on time.

• The employee's cost compared with the value delivered.

Write down the position before the employee starts so you have something to compare against. Some results will take longer than a month, but you should be able to tell whether the original problem is improving.

Give the employee something they own

If you hire someone but continue handling all the same tasks, checking every move and answering every question yourself, you may not get much relief. Be clear about what the person is responsible for, what a completed task looks like and when they need to ask for your approval. Then give them room to do the work. The first hire does not have to be the most senior or experienced person you can afford. It needs to be someone who can take responsibility for work the business needs done and do it reliably.