Grow Your Business

Are You Wearing Too Many Hats at Your Small Business?

Are You Wearing Too Many Hats at Your Small Business?
 

Going it alone in your business works for many small business owners. But for others, it might feel like you are stretching yourself thin by doing everything yourself. Is it time to add another employee?

Mike Davidov, owner and managing principal of Davidoff & Associates CPAs in Alexandria, Virginia, has more than 20 years of accounting experience. He specializes in helping small business owners grow their bottom line, stay compliant with tax requirements and develop efficiency strategies. As a small business owner himself, Mike offers the following advice and tips to sole proprietors evaluating whether it’s the right time to expand their operations.

Q: What might signal to a business owner that they could benefit from adding employees?

Mike: I would say when they feel they cannot really do everything alone. For example, a business owner might see the ball drop on different projects. Clients may not be happy because the business couldn’t meet their expectations or provide outstanding customer service.

Q: What factors should a business owner consider if they are deciding to add employees?

Mike: I ask my clients five questions to help gauge whether or not they're ready to hire:

  1. What is your net income after deducting necessary expenses from revenue?
  2. Do you have duties and responsibilities that you don't want or don’t have time to handle on your own?
  3. Would you like to be in complete control over how those duties and responsibilities are performed?
  4. Do you have a constant pipeline of business to sustain the operations so employees can be there long-term?
  5. Is there an opportunity to challenge and promote employees so as to reduce turnover?

The ultimate decision will vary by industry and by the business owner’s personality. It’s not an exact science, and there is no magic formula. If an owner provides more “yes” than “no” answers, it might be worth pursuing hiring at least one employee. But if there are more “no” than “yes,” I would probably advise against it.

Q: What other solutions exist for small business owners who ultimately can't support adding any employees?

Mike: First of all, it's not the end of the world. One workaround is to have a dedicated team of contractors and consultants used on an as-needed basis. If there are peak times during the year, or specific projects or lines of business that might require more work, a business owner can strategically hire contractors or engage consultants to help cover everything. Another strategy is to bring in interns or temporary employees. Temporary employees found through a staffing agency can be expensive, but especially for a short period of time, it may be worth it.

Many business owners are extremely hands-on and very efficient. They manage their time well and can maintain different aspects of running a business without falling behind. It’s almost like they are a “superman” for their business. Yes, it can be a little frustrating, and it can be very time-consuming. But for many people, it’s still a good solution.

Whether or not you’re the only one…

…you don’t need to feel like you’re running your business alone. SunTrust offers solutions to help manage your finances so that you can spend more time optimizing your business. Visit our Small Business Best Practices Guide for more business tips.

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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