While some solopreneurs are content to fly solo, others want to grow their business as much as possible. Yet growth is limited when you're on your own—eventually, you need to decide whether it's time to scale and bring in additional help.
Scaling doesn't mean you have to hire employees, at least not right away. Other ways to accommodate a growing business volume include hiring temporary employees, using contractors for projects and outsourcing entire aspects of the business to another firm.
“There are hundreds of ways to scale but the business founder or owner needs to be comfortable with whatever strategy they use because if they're not, it can be a disaster," says Donna Lubrano, a former solopreneur who currently teaches business at Northeastern University in Boston.
Before you move forward, ask yourself: “Am I ready?" Scaling is not for everyone, Lubrano points out.
“Scaling a business requires someone to go from being totally hands on with every single aspect, to being able to relinquish a lot of control in some areas," she says. “If you can't do that, then scaling is not for you—and maybe you just want to have a business partner instead."
How do you decide if growing the business with additional help is for you? If you're ready to scale, here are four questions to consider.
1. Should I outsource, contract or hire?
There's not a “one size fits all" answer. You could choose a combination of methods, or start with one and evolve to another. For example, Lubrano says if you have a seasonal business, you could start by hiring temporary help during peak times. Or, if you're creating a product and want to increase production, outsource the entire manufacturing process and focus on product development.
“You could easily scale without employees, especially if you don't want to take on a specific responsibility," she says.
When you're working with a limited budget, one option is to bring in a fractional executive. These are C-level, seasoned professionals you can engage part time for high-level positions, especially in areas where you're less experienced.
Don't be afraid to surround yourself with people who know things or are better at things that you aren't, whether that's a mentor, business coach or an employee.
—Ann Smith, president, A.wordsmith
“Using a fractional executive allows companies to get all the experience, knowledge and network without having to pay for the benefits, bonuses, insurance and healthcare of a traditional hire," says John Fox, CEO of GigX, which provides a directory of fractional executives. “Fractional executives typically require less training due to their high-level experience, and often possess 'big brand' expertise, which can assist with strategizing for scalability."
Ann Smith, president of A.wordsmith, founded her boutique communications and PR firm as a solopreneur 10 years ago out of her home. Today, the company has nine employees and an office in downtown Portland, Oregon. About two years into her business, Smith knew it was growing beyond her own capacity, so she experimented with contracting out different levels of work.
“I did that at first but then I realized I wanted people who were really committed to this business and who weren't just freelancing for different agencies," she says.
Her next step was to hire part-timers.
“I was able to find women who had nice, seasoned careers but had stepped away to raise families," she says. “They wanted to get back into it but didn't want to work full time and weren't looking for a big, fancy benefits package."
2. Am I ready to be a leader?
Lubrano, who ran a fitness business for about a decade before she started teaching in 2010, at one point hired an employee because of her family obligations and an increase in customers. She says one important question before you hire employees is whether you're ready to take on a leadership role.
“Are you prepared to do what it takes so that person can be an asset to you, and you can bring value to them? Because that's the key—then you know you're trainable and can learn from your employees and are able to fix mistakes," she says.
Being a leader also entails creating a business culture, as well as learning to communicate differently as you're no longer working in a vacuum. Smith notes that your priorities may not align with those of your team. For example, younger employees may be all about after-hours team-building socials while working moms don't want to add another obligation to their schedule.
“You have to think, who are your employees and what's going to make them excited, rather than looking at one idea as an 'end-all, be-all,'" she says.
3. Do I have the infrastructure in place?
Adding even one contractor or part-time employee changes everything from communication and workflow to customer interaction. If you're adding employees, you also have to think about their workspace and equipment like computers.
Then there are payroll and payroll taxes, collaboration and communication tools. Not to mention all those things that fall in the “human resources" bucket, from recruiting, hiring and training, to creating an employee handbook and yes, firing.
“When you have someone who's a W-2 employee, the rules change," Smith says, adding that she had to learn how to hire employees, among other things, and relied on business advisers and coaches to guide her along.
Lubrano advises having all the pieces in place long before you need to hire someone, otherwise you risk compromising the process. Some of the things you need before hiring include:
- Knowledge of how to hire and interview
- A job description
- An onboarding and training process
“Don't wait until you have critical mass and you need someone right away," Lubrano says. “Have an action plan—what you would pay, what role the employees will have and what gap they will fill."
And don't forget your retention strategy. As a small employer, you can't offer a competitive salary and benefits package, yet turnover can add up to thousands of dollars if you have to start the recruiting, hiring and training process all over. What do you have to offer to keep the employee?
4. What risk level can I tolerate?
Smith says business owners may think contractors are the best solution “because there's less hit on your bottom line." But, her advice is to not be afraid to invest into the business.
“You need to be willing to take on a higher level of risk," she says.
She acknowledges that having employees is a big responsibility that she doesn't take lightly, and she recommends for every business owner to conduct a risk assessment.
For some people, part of the risk goes back to the first question: the one about letting go. You need to be able to recognize your strengths and be willing to let others help with your areas of weakness. Smith says that sometimes people resist that "because they want to constantly prove they're really smart and on top of it."
“Don't be afraid to surround yourself with people who know things or are better at things that you aren't, whether that's a mentor, business coach or an employee," Smith says. “Recognize there's a specific area where you need help and you can join forces with another person and be even stronger."
Photo: Getty Images