Employees, need advice on taking the next big step with my business...

[FatCat]

**Sorry in advance for the lengthy post**

Since starting my business in 2009 I've had steady, yearly growth of 15-20% per year, but grew nearly 50% last year adding a 2nd printer and picking up several big accounts. Of course this growth was wonderful, and many of you might be asking "What's the problem!?!?!?" Well, the increased workload practically has me living at my shop 6-7 days a week working 12 hour days during peak season. Also, as the work increased I found it difficult to keep up with the demands of all my customers and some jobs slipped through the cracks as I couldn't work hard or fast enough to keep up with it all. (I feel terrible for failing in that regard, but has helped me to realize I can only do so much by myself.)

I've had one helper I've been using mostly as an installation sub-contractor for the past 2 years. He's a college aged nephew who was just looking for some part time work. I've trained him and tried him out on different things and found he is good at grunt work & installation, but doesn't have the aptitude for design/layout/fabrication. Plus, I feel he doesn't have his heart 100% into this because it's not something he wants to do as a career.

I've thought long and hard about it, talked to several peers about it and I feel I'm right at the point where I need to start looking for someone that wants to be a part of my business and wants to be there every day at my side working together to grow the company. Ideally, this person would eventually be called upon to run the shop if I was sick for a day or needed a day off. Their main responsibilities would be fabrication and installation and maybe some printer operation and design if they show the aptitude. In short, they would eventually need to know and perform about 70% of what I know and am doing now to make them worthwhile to me as an employee.

QUESTIONS;

1. Is there any way to "know" when is the right time to hire an employee? I honestly feel I'm there or very close, but being a small 1 man shop it's a lot to risk and I worry about things not working out, the added costs of payroll, insurance, etc.

2. Do I hire a rookie and train him/her from the ground up the way I want, or do I look for an experienced person who already knows the business and can jump right in and get to work? I realize there will be a drastic difference in salary, but if I have to go through several rookies before finding the "right one" and then factor in the time for learning/training will it be more effective to just pay more up front and reap more from the get-go with an experienced employee?

3. If/when you added an employee to your shop, did you experience growth? If so, how much? (Ballpark percentage is fine here - just trying to get some answers for feedback.) Based on what I did last year and with no further growth, I would be taking a pretty good cut in my own pay to add an employee. So, my hope is that growth will occur to help offset the added costs.

4. When you added an employee to your business was there anything that caught you by surprise or hadn't planned for? (Please explain.)

I hate to sound like a worry-wart but I don't take this decision lightly. On one hand finding the right person would be great, and would hopefully open new doors for me and my business AND allow me to take a day off every once in a while. On the other goes the added costs, stress and worry of providing a living for that person and making sure we have enough work for BOTH of us to survive on.

So, looking for any thoughts or opinions on the whole "employee thing" from those who have been there or are going through it now.

Many thanks.

 

[Gino]

**Sorry in advance for the lengthy post**

Since starting my business in 2009 I've had steady, yearly growth of 15-20% per year, but grew nearly 50% last year adding a 2nd printer and picking up several big accounts. Of course this growth was wonderful, and many of you might be asking "What's the problem!?!?!?" Well, the increased workload practically has me living at my shop 6-7 days a week working 12 hour days during peak season. Also, as the work increased I found it difficult to keep up with the demands of all my customers and some jobs slipped through the cracks as I couldn't work hard or fast enough to keep up with it all. (I feel terrible for failing in that regard, but has helped me to realize I can only do so much by myself.)

I've had one helper I've been using mostly as an installation sub-contractor for the past 2 years. He's a college aged nephew who was just looking for some part time work. I've trained him and tried him out on different things and found he is good at grunt work & installation, but doesn't have the aptitude for design/layout/fabrication. Plus, I feel he doesn't have his heart 100% into this because it's not something he wants to do as a career.

I've thought long and hard about it, talked to several peers about it and I feel I'm right at the point where I need to start looking for someone that wants to be a part of my business and wants to be there every day at my side working together to grow the company. Ideally, this person would eventually be called upon to run the shop if I was sick for a day or needed a day off. Their main responsibilities would be fabrication and installation and maybe some printer operation and design if they show the aptitude. In short, they would eventually need to know and perform about 70% of what I know and am doing now to make them worthwhile to me as an employee.

QUESTIONS;

1. Is there any way to "know" when is the right time to hire an employee? I honestly feel I'm there or very close, but being a small 1 man shop it's a lot to risk and I worry about things not working out, the added costs of payroll, insurance, etc.

Usually, when everything is getting away from you as you explained. Sounds like the timing is right now.... and quick.

2. Do I hire a rookie and train him/her from the ground up the way I want, or do I look for an experienced person who already knows the business and can jump right in and get to work? I realize there will be a drastic difference in salary, but if I have to go through several rookies before finding the "right one" and then factor in the time for learning/training will it be more effective to just pay more up front and reap more from the get-go with an experienced employee?

I like getting someone who already knows as much as possible. If you're already suffering from not enough hours in the day, you don't need to add teaching to your resume.

3. If/when you added an employee to your shop, did you experience growth? If so, how much? (Ballpark percentage is fine here - just trying to get some answers for feedback.) Based on what I did last year and with no further growth, I would be taking a pretty good cut in my own pay to add an employee. So, my hope is that growth will occur to help offset the added costs.

Again, I like to hire on when I have about 30 hours or so a week... not getting done on a routine schedule. Therefore, you should notice a sudden increase in sales, as long as you can keep the backlog backing up.

4. When you added an employee to your business was there anything that caught you by surprise or hadn't planned for? (Please explain.)

Mostly waste. It's not their business, so when you wash your hands, you might dry them and put the towel over the sink and use it again for something else, like wiping something off the floor or off your shirt. An employee will use two or three paper towels to your one and throw them out and then get two more to wipe the mirror clean. You'll have more trash going out weekly then you thought possible in a month.

I hate to sound like a worry-wart but I don't take this decision lightly. On one hand finding the right person would be great, and would hopefully open new doors for me and my business AND allow me to take a day off every once in a while. On the other goes the added costs, stress and worry of providing a living for that person and making sure we have enough work for BOTH of us to survive on.

I've always worried about having the hours to keep our people going and sometimes when it gets tight, we just bite the bullet and keep everyone going. However, some of our people are part-timers and some are full time.

So, looking for any thoughts or opinions on the whole "employee thing" from those who have been there or are going through it now.

Many thanks.

On the whole, it's a great feeling having employees. Heck without them, I couldn't be here like I am.
I can leave early if I want. I can take a vacation without closing down the business. I can go see clients if need be without losing a minute at the shop. If something comes up last minute, I can do it and still know the shop is operating. However, I think the best thing is simple and just obvious...... you now have one more set of hands producing or however many pairs of hands you hire. As long as you can keep the work coming, it's great.

Years ago, BC [before computers], we had a full shop of sign painters and some other people getting everything done from sunup til sundown and we had a backlog of at least 3 months worth of work. Back then, that was a lot. Once we got more and more computers, we didn't need all the help and our backlog went to 3 weeks. Then it became apparent, we all had to sell more. So, my wife took a more active role and we joined organizations and started networking back in the late 80's early 90's and it's still paying off. With all the equipment and machinery, it's easy to knock out work...... ya just gotta find the right accounts and keep 'em coming back for more.




Good Luck.... !!

 

[SD&F]

Gino....good replay and I agree. If the work is there, go for it.

 

[klemgraphics]

I'm in the same situation...I'm slammed already and this is the slow time of year(been like this for 2 years). I'm eagerly awaiting the replies and any advise.
I'm thinking my options are to hire someone good or start firing the least profitable customers which I really don't want to do. Otherwise I will start losing the good customers.

 

[Letterbox Mike]

I agree with Gino 100%, his answers are pretty spot on.

Hire someone before it's too late. Believe it or not, you're going to kill your business faster by not getting the help you need than you could doing anything else. You've been at the point you've needed to hire for a while I know, it sounds like it's gone from being something that would be nice to being something that is critical.

I'll add to what Gino said by saying when you hire this person, you need to step up your workflow considerably. When it's just you it's easy (sort of) to run the place being half-organized, by the seat of your pants, etc.. When someone else's job relies on you doing your job, you had better make sure that shop is set up to run like a well oiled machine. It doesn't matter if you have 1 or 1000 employees, if there is no systematic approach to doing business (this means EVERYTHING, not just the obvious stuff) you're just throwing money down the drain. I can't remember what system (if any) you're using now, I don't think we've ever discussed that, but I would implement as many systems and procedures and some sort of workflow management system NOW so you're ready for the first hire.

You know my door is always open, if you ever want to come down here for a day or on a weekend I'm more than happy to spend as much time with you as you need to help you prepare for this big more. I've hired and fired more employees that I care to admit at my young age, I've learned a lot of hard lessons, if there's an opportunity to pass that along to you I'm here. Seriously, give me a shout.

 

[redbarn]

Growing pains are a good thing, congrats!!! I would look for an experienced employee, you will have to pay them more but I feel it would be worth it. Hiring someone just looking for a job is not conducive to our industry. It is not possible to do any facet of this job on autopilot. An experienced employee can teach you some new things as well, which is invaluable. GOOD LUCK

 

[iSign]

not time for a long reply (because I'm back to a one man show myself) but I will say that I think you would benefit from reading "the E-Myth revisited" by Michael Gerber.

I also agree with Gino, Insignia and Pat...

 

[Craig Sjoquist]

Myself would look at the books & ask ?

Can I work 40 hrs vacation & with few relief days in a years time.still make a profit & good salary. ?

Is the business now salable. ?

How much salary can you afford cash each day you need extra help NOW ?

 

[Gino]

Many years ago, I would've agreed that training someone and grooming them to your needs was the way to go. I know, because I did it.... and quite often, but there seemed to be a common denominator with all of them.

While they would agree to work for smaller wages than someone of greater know-how and ability, they still needed........ things.

I can't tell you how many people I've trained to letter and do things in the shop, but what ultimately happens is.... once they start to really catch on and start making money for you, because before this, they were generally wasting money with mistakes , do-overs and your own time with them.... they would suddenly find another shop which was willing to pay them more than I could afford to and they'd leave. So, in the end, I was training my competition.

I had a guy one time.... a very talented guy..... come in late one morning and in front of a customer tell me I couldn't afford him any longer. Not missing a beat, I laughed and said, no problem Lee, you're getting a 5 dollar raise. Now get going and get to work. I finished my conversation with the lady and went over to Lee and asked him what that nonsense was all about. He said, well, I was looking through your files last night and saw quite a few customers jobs where I got paid such and such, but you made this amount. So ?? Well, without me, you can't make a dime. He was fired on the spot. I told him he had 2 minutes to get out.

This same kind of scenario happened several times, where the employee figured we couldn't go on without them. Luckily, I've had two or three people working at a time, so it never really bothered us for more than a day or two, but I would have to pull some long all-nighters to make sure everything was taken care of.

Nope, taking a novice doesn't seem to work, especially with the mindset of the people today. Give me someone who can fit in almost immediately and I'll show you a happy owner. ​

 

[Letterbox Mike]

not time for a long reply (because I'm back to a one man show myself) but I will say that I think you would benefit from reading "the E-Myth revisited" by Michael Gerber.

I also agree with Gino, Insignia and Pat...

Long time no see Doug!!

The E-Myth Revisited is a great book, perfect for Sean's situation. When I read it the first time I had sort of an "oh my god this is so obvious it's dumb" moment, but it brings to light a lot of things that are blatantly staring you in the face but you're unable to see because you're so overwhelmed working IN your business. Sort of the whole "can't see the forest for the trees" thing. What it boils down to is you'll never be able to grow your business if you're stuck doing the mundane day-to-day things all day every day. It forces you to think about why you're really hiring someone. It's not to help you do the work, it's to free you up so you can do more important things related to running a business.

 

[FatCat]

Gino, many thanks for those great answers. I appreciate you taking the time to be so thorough. Would certainly like one day to be in the shoes that you and Mike at Insignia are, but it's taking that first step that is proving to be the most difficult for me.

Mike, I know you know as I've been talking for over a year now about making this move. It's just finally come to the point where it has to happen. Don't worry, I'll definitely be taking you up on your offer buddy and don't be surprised if you get a phone call.

I can definitely see scheduling and job tickets needing to be addressed. However, I am familiar with those from my previous work experience in the offset print world. And yes, it seems like it would make the most sense to hire someone with experience but wondering how easy it will be to find a good experienced person in my area where most sign shops seem to be busy.

Many thanks to all, and I do need to do some more thinking as to what I'm willing to sacrifice if necessary to make this happen. Hopefully others will add to this thread because i plan to come back and post updates as things progress.

Thank you!

 

[HulkSmash]

Congrats on the growth. On a slow day we're 4-5 strong. On a busy day we have all 7 of us here. It's good to maybe start someone off as part time, and then as you feel comfortable bring them on full time. When looking for someone long term we tend to do the training, and mold them the way we want....for wraps i try to find someone with experience.

I'm writing quote, invoices, and visiting customers most of the day, and rarely have time to touch most jobs...

 

[Letterbox Mike]

Mike, I know you know as I've been talking for over a year now about making this move. It's just finally come to the point where it has to happen. Don't worry, I'll definitely be taking you up on your offer buddy and don't be surprised if you get a phone call.

I'm starting a new business... I don't have a name for it yet, but I will be offering consultation services for the low low price of a jar of pickles.

And seriously, call any time. If I can't talk during the day I'll try to call you back in the evening. I'm stuck helping in production right now because we're so freaking busy, but I'm here to help however I can.

And one other thing I cannot suggest enough is to seriously look into Signvox. I'm not trying to pimp them too much, but I'm telling you you can't live without it. Seriously. Especially if you're adding staff, this is the best time to do it. I know we're bigger than you, and I hear a lot of people saying they're too small for a program like that, but I swear to you it will make your life so much easier it's hard to even comprehend. Actually, I think there's almost more value to it if you're smaller, it relieves so much of your workload and makes you operate so much more efficiently that it frees you up to almost be another employee yourself.

 

[Bly]

Gino has given some great advice.

Great to hear you're doing so well Fatcat.

 

[John Butto]

FatCat, I am writing to Obama right now telling him about a small businessman wanting to expand. He will use you as his posterboy and have you for dinner at the White House, and he will give you some big federal money. Pay yourself a big salary, buy a new car and a house, sell your business to some foreign company after a year. Then you will be a real FatCat. The solar and Chrysler companies did it and also Al Gore.
You seem like a nice & honest person, so whatever you decide it will work out for you.

 

[MikeH]

QUESTIONS;

1. Is there any way to "know" when is the right time to hire an employee? I honestly feel I'm there or very close, but being a small 1 man shop it's a lot to risk and I worry about things not working out, the added costs of payroll, insurance, etc.

If you are asking the question you may be months past the time you should have hired someone. There is risk, you assumed that when you opened your door.

2. Do I hire a rookie and train him/her from the ground up the way I want, or do I look for an experienced person who already knows the business and can jump right in and get to work? I realize there will be a drastic difference in salary, but if I have to go through several rookies before finding the "right one" and then factor in the time for learning/training will it be more effective to just pay more up front and reap more from the get-go with an experienced employee?

Hiring a rookie will increase your hours in the short term, add in training time. I think you need to ask yourself some questions and run the answers past someone who knows you well to get a reality check. You are successful, so ask yourself why? What am I good at? And list it best to not so good. Most people look for clones of themselves and end up doubling their weaknesses. Your best hire may be your polar opposite.

3. If/when you added an employee to your shop, did you experience growth? If so, how much? (Ballpark percentage is fine here - just trying to get some answers for feedback.) Based on what I did last year and with no further growth, I would be taking a pretty good cut in my own pay to add an employee. So, my hope is that growth will occur to help offset the added costs.

I think I asked the same question in a different way. When we experienced growth did we add employee(s). Yes when we had to and it sounds like that time has come. When you stop running the business and it starts running you then its time.

4. When you added an employee to your business was there anything that caught you by surprise or hadn't planned for? (Please explain.)

Every single time! Going into each would take a book. It boils down to me. I hired the wrong person and did not correct it fast. Or I put a round peg in a square hole. I have learned to be adaptive. A new employee may be able to do the job well enough but really shine at something un-intended creating an opportunity for both of you. So keep an open mind.

I hate to sound like a worry-wart but I don't take this decision lightly. On one hand finding the right person would be great, and would hopefully open new doors for me and my business AND allow me to take a day off every once in a while. On the other goes the added costs, stress and worry of providing a living for that person and making sure we have enough work for BOTH of us to survive on.

 

[GB2]

One other thing to keep in mind, which is actually what you are starting out doing right now, is that when the day comes to hire an employee you must have a complete plan and be prepared in every way to deal with employees. Inevitably you will learn some things as you go but being as prepared as possible ahead of time is invaluable. You should know all the laws concerning employees, have an employee handbook of some sort that describes your company policies, you should have a non-compete clause, a non-disclosure clause, computer use policy, personal cell phone policy, vacation schedule, holiday schedule, sick leave policy, etc. You must remember to document everything when it comes to employees. They should have a probationary period in writing when they are hired and if you don't think they are the right fit then you should be prepared to terminate them immediately.

Having employees is definitely a huge change in your working environment. Having the right employee, a good team player, will definitely improve your business and make you more profitable. Having the wrong employee will give you sleepless nights and ulcers. Eventually, you will reach a plateau where you cannot grow any further working by yourself and must make the decision to be content to stay at that level or expand your horizon and move up to employer.

 

[iSign]

look into employee leasing

 

[biggmann]

What we did once and it worked out really well was hire a student working a co-op term. They arent experienced but because they are taking graphic design arent strangers to PS and Illy. We canevaluate them, they dont get paid and excessive amount an if they seem to be working out we can offer them a job for the summer and in this case when they graduate. Again we hired this person, started him on the lower end of our pay scale and he rose to the job and is one of our most valuable assets now and we trained him how we wanted our shop run none of this "this is how we do it at shop x"

This has really worked for us.

 

[Doyle]

Great thread, and such great advice from people who have been there and went through the same situation....

My situation sounded EXACTLY like yours about 20 months ago, when I finally decided to hire my first employee (with all of the extra paperwork and costs that come with it). Since hiring him, the following has taken place:

- Our sales volume has increased by nearly 70%
- Our profits have increased substantially
- I feel great about the fact that I can meet with customers and perform other sales related tasks without halting production. I would like to emphasize on this one, it is so important that the cogs never stop turning at your shop just because you are absent.
- In an effort to adjust to the staggering growth we have experienced, I have hired a second employee. Part-time for now (though he has worked full-time hours for the past 4 weeks) but a second employee nonetheless.
- We have officially outgrown our small shop, and we are moving into a much larger space a couple of blocks down the road. It probably sounds like BS but I am honestly going tomorrow afternoon to sign the lease and take possession of the new space.

I am in no way insinuating that all of the above would happen for you if you did the same thing, your situation is unique so you should probably talk to your accountant and attorney for more information as well... don't forget to consider that a $10/hr employee costs you roughly $12/hr after unemployment/social security etc. and maybe more depending on your situation or additional accounting costs.

also, it should be noted that our shop is still very backlogged even with 2 employees (not including myself) and I still find it hard to keep up with all of the jobs/customers. I have another problem to address which is organization and delegation of projects and tasks at our shop (job list remains an unorganized mess). Once I get a better system in place I place to have at least one or two more people on my team before I feel like I can proceed to the next level. The idea gets much clearer when you realize the potential your business has and how your business needs to become a machine. You have to let go of the idea that you are the only one who can produce high-quality results in a timely fashion and let someone else do the work that you train them to do (yes I hired someone without prior experience, slow start but has progressed quite well).

Interested to hear how things are going for you since you posted this 6 months ago?

 

[jrsc]

1. Is there any way to "know" when is the right time to hire an employee? I honestly feel I'm there or very close, but being a small 1 man shop it's a lot to risk and I worry about things not working out, the added costs of payroll, insurance, etc.

usually when you want to keep expanding your business and don't have time to do it on your own. sounds like the right time. just don't expect hiring someone to help work any less for several months. If you're unsure about the person have them do a couple week trial.


2. Do I hire a rookie and train him/her from the ground up the way I want, or do I look for an experienced person who already knows the business and can jump right in and get to work? I realize there will be a drastic difference in salary, but if I have to go through several rookies before finding the "right one" and then factor in the time for learning/training will it be more effective to just pay more up front and reap more from the get-go with an experienced employee?

I think the most important things you can find in an employee is someone that is reliable, someone who actually cares about the work and making customers happy, and someone who is a quick learner that remembers things the first time you show them. I would take those qualities over experience any day. Even an experienced employee needs training on your specific equipment and software and the way you do things.

3. If/when you added an employee to your shop, did you experience growth? If so, how much? (Ballpark percentage is fine here - just trying to get some answers for feedback.) Based on what I did last year and with no further growth, I would be taking a pretty good cut in my own pay to add an employee. So, my hope is that growth will occur to help offset the added costs.

you should experience growth especially if you are already growing. its hard to say how much. the biggest reason for the growth is you will have more time to focus on the business instead of just production.

4. When you added an employee to your business was there anything that caught you by surprise or hadn't planned for? (Please explain.)

at least at the start plan on spending a lot of time managing the employee. at least until they learn they will need to be told every little thing to do. If you have them doing something and they finish while you are waiting on a customer they are just going to sit there waiting for you to give them additional instructions. You will spend a lot of time for the first few months making sure they have something to do. When I hired my first employee like this I found it better to have him work in the afternoon so I can spend the morning prepping things for him to do. Also plan on extra waste while they are learning.


It's hard to tell up front if you are getting a good employee or a bad employee. Some of its just luck. I've had employees where I think I spend more time managing them then I save by having them and I've had employees that work out great. Just a few months ago I hired someone just to help out with basic time consuming work that doesn't take a lot of skill for a few hours a week. He had just a little experience cutting and applying vinyl. I got lucky and he has all 3 of the qualities I taked about for question 2 (reliable, cares about the work and his job, quick learner). Now within 4 months he is full time and basically running production and I have a lot more time to run other parts of the business.

 

[FatCat]

Interested to hear how things are going for you since you posted this 6 months ago?

Glad you brought this up and I am happy to reply...

Well, it's been quite a challenge and change for me. It seemed to take forever, but my guy is finally able to produce about 60-75% of the most common items we do here unattended. (Banners, coroplast signs, panel signs, car/truck lettering and he is slowly learning the wrapping side of things.) Last Saturday we wrapped a 24' box truck which previously took us a day and a half the last time we did it. Now that he knows more, we knocked the whole thing out in a day. My guy is younger (23) and I think he initially he approached this position as "just a paycheck". However, I think he's been bitten by the sign bug and is really stepping up his game to learn more and do more AND he likes what he is doing. I've even got him playing around in Illustrator and doing some tutorials on Youtube as time allows. Eventually it would be nice to see him do some of the simpler layouts for common banners and such, and perhaps the next step is training him to run the printers and cutter thus freeing me up even further.

It hasn't been all sunshine and roses - there was and still is more waste and mistakes with some things than I would make if doing it myself. The first 2-3 months were painful and often aggravating. However, I figure it is a slow, learning process and I have to be patient while he gets himself where he needs to be. Honestly, time in the saddle is the greatest teacher and the more he does the better he becomes. It will be interesting to see where he is at the end of this year, and I will be glad to post an update.

As has been said, one of the biggest adjustments I've had to make is to learn to let go and trust him to do what needs done. Also, the fact that I am responsible for keeping work "in the pipe" for him has been a real challenge because before I was just going by the seat of my pants as I had time, etc. Now I have to have a game plan the day before so that he isn't wasting time when he gets here.

All in all I think it is a good thing, and I just have to give it time and (hopefully) I'll be able to look back and say this was the right thing to do.