Congratulations! Your business is thriving, money is coming through the door and you are doing what you love. Well, let’s be honest. Most of the time, you are doing what you love. With business growth, comes growing pains and if you are still on Team Solo, it may be time for you to hire some help.
As an event planner, you probably love having control over every detail of your business. But, if you want to continue increasing your revenues, keep your clients happy and have time for quality self-care, you will need to grow your team.
If the thought of this makes you feel uncomfortable, it’s ok. You may be thinking, “Sure, I’m making more money than before, but can I actually afford to hire someone?” or “I’m not sure I’m qualified to do payroll. Do I need to hire someone to do my payroll, too?” But before we dive into the nuts and bolts of the payroll compliance of hiring someone, let’s figure out if you are ready to bring on a team member.
If you are on Team Solo and thinking it may be time to outsource some work, ask yourself these three key questions:
1. Has your business earned a profit each month for the past six months?
Use your bookkeeping program and run your Profit & Loss Statement (also known as your Income Statement) to check. One of my favorite programs is Xero.
2. Are there tasks that are zapping your energy and taking you away from selling or delivering your service?
Check out this list of tasks you can delegate. Does reading this list light you up inside?
3. Review your revenue goals.
If your business reaches that goal, would you be stressed trying to manage the workload on your own?
If you answered yes to two or more of those questions, then it may be time for you to hire help.
Once you are ready to hire, you need to consider a couple of options.
Because this is probably your first hire, I suggest being a bit conservative with your hiring choice. Mainly, please consider working with an independent contractor as opposed to hiring a full or part-time employee.
What is the difference between an independent contractor (IC) and employee? With an employee, you are responsible for additional tax payments and regulations. For example, you may be required to offer health insurance. When you work with an independent contractor, while there are regulations around what classifies as an independent contractor, there is less paperwork, fees and compliance regulations.
Whether you decide to work with an IC or employee, be sure to use a payroll program. Within the United States, if you pay a worker $600 or more per year, you are required to report their earnings to the IRS. If he or she is an IC, you will need to issue a 1099-form to the worker in order for them to report their earnings. And while you can generate the 1099-form without a formalized payroll system, using one makes the process much easier and provides documentation in the event that it is needed for reference in the future.
Thankfully with technology, payroll systems have become much easier to use. Xero has a built in payroll system, or you can check out Gusto formerly known as ZenPayroll. Gusto makes payroll super easy for the small business owner, even if you do not have an accounting background. And it integrates with Xero which is known for making accounting beautiful. Cheers to that!
Take action now: If you are thinking about hiring help, the first step is to check and make sure that your business can handle it financially by running your profit and loss statement. If you have not been keeping up with your books (it’s ok!), sign up for a program today and start tracking your numbers.
Need help figuring out your books so you can make sound financial decisions? Check out my new course, Money & Mimosas: Bookkeeping Basics for Creative Entrepreneurs.
Danetha is offering Aisle Planner readers $100 off her latest course Money & Mimosas: Bookkeeping Basics for Creative Entrepreneurs! Just use promo code Aisle Planner at checkout. Offer expires November 20, 2015.