Is it Time to Hire the First Employee for Your Trades Business?

Many tradies will say that turning your skills, knowledge and experience of your chosen trade into your own business is the best move you could make, so congratulations! Having said that, a successful business will keep growing over time and will reach a point where you are not willing or (more importantly) not able to keep on top of handling everything on your own, from the jobs themselves to the business admin.

Hiring your first employee can feel like a massive leap and it’s natural to be nervous about making the transition from being a tradie working for yourself to having responsibility for someone else as their employer. Many trades business owners don’t know where to start but a good business advisory service or accountant for tradies can help guide you through the questions you need to ask as you consider taking on an employee to help with the workload.

How do you know when you need an employee?

There are two key signs to look out for:

1. Are you losing business because you can’t keep up with demand?
2. Are you being pulled away from aspects of the business you want or need to focus on because you’re too busy struggling to juggle every task?

Many small business owners have become used to a high workload and long hours, so it’s easy to just carry on and assume this is the price you pay for being your own boss. That isn’t always true, though, and being a business owner shouldn’t mean burning yourself out and never having time for family and friends. From a strategic point of view, hiring a first employee is often essential in allowing many small businesses to continue growing and succeeding. That’s why it’s vital that you take a step back from the everyday ‘to-do’ list and think about those questions objectively and honestly.

How much will an employee cost me?

Understandably, the cost of paying an employee is a major barrier for many business owners. It’s a sensible concern and one to be taken seriously, but that being said the full picture is much bigger than this. The cost of hiring an employee goes beyond their regular salary, but on the other hand the benefits and rewards they bring you and your business might more than make up for the cost.

Start by writing out a job description. Firstly, this will help you clarify in your own mind where you need more help (whether it’s in the trade or as office support), what the scope of the job is and what you’d expect from an employee. This will also help you estimate all the costs involved from the physical (will you need more equipment or ungraded facilities?) and less tangible costs (insurance, additional expenses for payroll and taxes). This job description should include all the legal aspects associated with the role including remuneration, hours, leave entitlements, probationary periods and so on. Not only will this help you to make more informed decisions about who you’re looking for, what you expect from them and what you’re prepared to offer, it is also vital to have all this in place before you post a job ad, hold any interviews or appoint a new member of staff.

How much will an employee benefit me?

Once you’ve gone through the process of estimating the cost of hiring an employee, it’s just as important to think about the rewards they could offer. Or, to turn the question on its head, ask ‘How much will NOT hiring an employee cost me?’ Having an employee to share the work can generate efficiencies and put you in a position to actively grow your business in a number of ways:

Increasing productivity – how much valuable time could you save with an extra person working on a job with you, or taking away the burden of admin tasks?

Increasing capacity – related to that, could you then take on more customers, complete more jobs and ultimately generate more income than you are able to working alone?

Increasing reputation – there is also a less concrete benefit in customers’ perceived value of your services. Although you are only doing the same work in half the time, many people will be more impressed by two tradies arriving on site, or by a polite, professional person dealing with them from the office while you’re out on the job.

Lightening your own load – once all the cost versus benefit analysis is done, this is maybe the most important factor. How much is it worth to you personally to have some of the weight lifted from your shoulders and to know that you can manage and delegate some of the work to a trusted employee rather than having to carry everything on your own?

We have always had a soft spot for tradies and have worked with many trades businesses as a result. If you need assistance to make your trades business succeed, we are more than happy to help.