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Thursday, April 7, 2011

When You Appoint your first worker

When you run your business only in the evenings you don’t have a proper office and you’re doing most of the stuff from your own home. Great. So now you have to think where you are going to put your first employee – you might not want him to invade your private life by coming to your house to work each day. If you are not a telecommuting fan and have your first employee working from his own home, you should already be thinking to rent an office.
an office can be a real burden for the part time entrepreneur, mostly because running the business as a second job might not get enough cash flow and profits to cover the new office expenses. But because you are an entrepreneur and like to evaluate challenges and find solutions, you might come up with an idea. now that the office space is taken care of, you will hit the next challenge. you have space, you have the tools. Now you need the “humans”. First thing that comes to your mind is that you can’t afford to pay them. Also you can be sure that they will be far less efficient in getting things done than you are: first they are not owners and they care a lot less about the business, and second you know the business best and you can’t expect anyone else to be better at it.
Actually the most important evaluation is to calculate if by paying a person you will be able to generate enough extra income to cover the costs and make a little more profit from it. You have the following results:Cost of employee bigger than extra income : not a good way to go. Cost of employee equal extra income : not making a profit but growing the businese. Cost of employee smaller than extra income : great
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