As your home business begins to grow, the added work and responsibility may cause you to seek extra help. Once you have made the decision to no longer go on your own, you will have to decide whether to hire workers or outsource certain tasks. Knowing which option is right for you and your business will really depend on your specific circumstances.
Your fist instinct may have been to hire. So let’s take a look at some of the pluses and negatives.
Why to hire
- It’s personal. Bringing a hired worker into your home business means that you will have a personal relationship with this person. The worker may also be more enthusiastic about his or her job then an independent contractor.
- It’s an investment. You can also take comfort in knowing that he or she may be able to handle things not specifically connected to job, such as manning the office in case you suddenly get pulled away. A hired worker can multi task as part of the job description, or be trained to take on more responsibility in the future.
- It’s reassuring. Finally, by bringing hired workers into your home business, you will have more direct control and contact over your business operations.
Why not to hire
- You can’t afford it. One of the biggest reasons not to hire is the costs associated with it. If you are considering only part-time or temporary help, then these costs are not your concern. But if you are looking for full-time employees, then you will be responsible for several employer-paid taxes, in addition to any benefits, such as health insurance, paid time off, or sick leave.
- It’s a hassle. You have to go through a thorough hiring and recruiting process (See my article, “Home Business 101: Hiring Employees“)
- It may be against the law. If you live in a city with strict zoning laws, then it may not be so easy to hire on-site help. In some residential zones, all types of commerce are prohibited; others allow small non-polluting businesses that do not effect the neighbors (for example, through an increase of noise, or a decrease in parking spaces). Check with your local government to see how strict the zoning laws are in your area.
- It’s too crowded. Hiring workers means you must have adequate physical space to put them. If space is limited, then hiring may not be your best option.
Now let’s take a look at outsourcing.
- It’s cheap. When you hire an independent contractor, you avoid the added cost of taxes and benefits. This is particularly important if your cash flow is tight.
- No hassle. Unlike the lengthy recruiting and screening process needed to hire a worker for your home business, hiring an independent contractor is relatively easy. There are several options- online and off, where business owners can find the right independent contractor for the job. Moreover, there are many aspects of your business that can be outsourced, from bookkeeping to web design, even specific, short-term projects.
- No worries. With an independent contractor, there is no need to worry about zoning laws or the size of your home office.
The two major downsides of outsourcing are that you give up some control over these aspects of your business, and you miss out on investing in a workforce that could help you grow in the future.
In short, for home-based businesses with limited resources, outsourcing could be a better option. But if your business is growing rapidly, and you are looking for a something more personal, then hiring may be the right choice.