Business owners who are starting a business from scratch of the first time, are often so focused on growing their business that they do not take time to consider what happens when they have achieved that growth says Edmonton bookkeeping. For example, they want to scale up their business, but they do not have any idea of what to look for in the business that allows them to know when the timing is right to hire their first staff member. Therefore, they may be unprepared for when that might be, causing them to hire someone reactively instead of proactively.
One of the biggest questions that entrepreneurs have when they are starting their business for the first time, is how they know it is time to hire an employee. Edmonton bookkeeping says that this is an extremely important question, and whether they need to hire someone because they cannot get all of the work done they need someone, or because they are unable to work on the strategic objectives of their business because they are too busy providing the service to their clients, there are many indicators that entrepreneurs can use to determine if it is time to hire someone. However, in order to ensure that they can afford to hire someone is a completely different question. A good rule of thumb is for an entrepreneur to ensure that they have a minimum of three pay periods for that employee saved up in their bank in order to ensure they have enough cash flow in their business to continue to pay that employee. Perhaps, an entrepreneur sees a sudden drop in business for a month, that cushion will ensure that they have the money saved up to allow that employee to continue working, while the entrepreneur gets back to growing the business.
The next thing that entrepreneurs should think about is how often they are going to be running payroll. Edmonton bookkeeping says that this is important because the cash flow is ultimately going to dictate how frequently an entrepreneur is going to be able to pay their staff. And ultimately, cash flow is dictated by how often an entrepreneur is billing their clients. If an entrepreneur thinks ahead of time to figure out the right payroll frequency for their business, they can work backward and ensure that they are implementing a billing cycle in their business that is going to allow consistently and a constant flow of money coming into their business to allow them to be able to pay their staff biweekly, or even weekly if they desire.
By thinking proactively in their business about when the right time to hire someone is, and how they are going to pay them can help an entrepreneur stop worrying about when they need to hire someone and focus on the growth of their business. Edmonton bookkeeping says that when the timing is right, if an entrepreneur has thought about it proactively, they will know when the timing is right and that they have saved up the money in order to bring that person on board. By setting systems in place, can eliminate the worry and the anxiety that is associated with that they can allow the entrepreneur to focus on the most important task which is growing their business.
Edmonton Bookkeeping | When Should A Business Owner Hire Their First Staff
When entrepreneurs start their business for the first time, they start as the only employee of the business, and they often start out with a cash crunch says Edmonton bookkeeping. However, when they are ready to scale up their business, they need to ensure that they have systems already in place to allow that to happen. If they do not have a system in place, they may be ready to scale up their business, but have to stop in order to create those processes which could actually cause their business growth to slow or stop.
One of the first things that an entrepreneur should do is ensure that they have a great onboarding policy. This onboarding policy means creating a template or a checklist of all of the things that an entrepreneur needs to get from their employee as they are hired. Typically this means getting a social insurance number, their date of birth and address as well as their banking information so that their Edmonton bookkeeping company can enter them into their accounting software and issue payroll. However, that might not be the only thing on a checklist to bring. A company might require the signing of an employment contract, signing a nondisclosure agreement. an onboarding package can include a checklist of all of the things that a business owner needs to have in hand when the employee starts including a copy of everything that an employee needs to read and sign.
Edmonton bookkeeping says that an efficient onboarding package might also include a variety of other things including drivers abstract, a criminal record check, tickets or licenses required to do the job that they have been hired for, and even things like a drug screening. By creating a checklist that an entrepreneur can easily send off to new hires, can ensure that when an entrepreneur is ready to hire an employee, that they have the systems in place to onboard them quickly and accurately. This can also enable an entrepreneur to hand the task off to a different employee, or even to Edmonton bookkeeping for them to enter in, while ensuring that they have all of the important information to do the job properly.
It is very important that entrepreneurs ensure that they have an efficient onboarding policy because as the United States Bureau of Labor statistics show, while the average employee typically stayed with an employer for an average of four point six years, millennialís as they are entering the workplace are only staying with employers for two point three years. This means, that there is a higher turnover rate all businesses, and being prepared that higher turnover rate with an efficient onboarding strategy makes good sense.