To take on a senior employee in your own biz – or not.

There is a better way of building your business than taking on a senior employee. Unfortunately, this better way is risky and certainly is not possible for all types of micro-business. My preferred options/alternatives to taking on a senior employee are:

Option 1. using independent contractors/freelancers/other micro-businesses
Option 2. taking on partners or if you’re a limited company or social enterprise, other directors.

OK so I know that my two preferred options fly in the face of government advice, guru advice and business school advice which urges you to grow your business by taking on employees, particularly qualified business managers and leaders, but to me it is all a question of risk. My two options are risky but I believe, if negotiated and managed carefully, are not as risky as taking on a senior employee.

As my businesses have always been B2B service businesses my main worry and focus has always been winning and keeping customers. In over 26 years of starting and running my own businesses I’ve got a better track record of winning and keeping customers using my two alternative options than I have with employees, as executives and managers, however well trained. Most are fine but it’s the ones that are not fine that have proved deadly to our customers, our income, our profitability and most of all our own morale.

The main advantage of option 1 – independent contractors is that you retain total control of your business, it is flexible, it is a service agreement which is easier to manage in time and money than an employment contract with the associated regulations and it is a tap of skilled resource that you can turn on and off dependant on your workload and you don’t have all the associated on costs of employees including purchasing equipment.

Because most contractors/micro businesses want to continue being contracted in the future I find they become like partners of our business and we grow our businesses together. For example I have worked with the same contract trainers and the same designers and developers of learning media for over 20 years. We all pay each other on time too – as soon as we possibly can.

The main disadvantage of this option is that it can play havoc with your margin. However if you go for a very high quality and unique service you may be able to ensure the price you charge covers using contractors and remains competitive.

The main advantage of option 2 – taking on partners/directors – is that it is bootstrapping par excellence. Let me explain; I recently entered a business ‘to what do you owe the secret of your success?’ competition. My answer was ‘my business partner of 26 years, Clare Francis’.

We both invested time and money in our business, we’ll work whatever hours, whenever, in order to succeed. When times were hard we didn’t take money out of the business. We never needed status perks like employees ask for.

We are equally passionate about our customers and our offer to these customers, so much so than many are now friends too. We have complementary but different skills and most of all we trust each other – so implicitly that we don’t have to waste time overseeing each other.

I just love successful business partnerships and believe they are responsible for more successful start ups growing into substantial micro businesses than any other single factor.

My business partner Clare and her husband, Charles, also managed a very successful family business. Indeed, many of my successful micro business owner friends, who say they are going it alone aren’t really. They often, have a spouse or partner, beavering away in the background supporting the business and often holding down a job in the early stages of the start up in order to bring in family income.

Partnerships are my preferred option but it is as tough and careful a decision as deciding to live with someone.

Trust and passion is everything, in my opinion, to success in your own enterprise. This total trust and passion is there with my co-founder of the Enterprise Rockers, Tina Boden, and all the wonderful band leaders of our movement.

We trust each other so much and share the same passion that we’re all putting our own biz money and time, for no return yet, into making it all work.

So, before you do as the gurus recommend and take on a senior employee, do consider whether you’d be better using independent contractors or taking on a partner.

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