Starting a business: One man show, or have employees?
When I first started EMA, a friend of mine had a similar business. Since the business was heavily field service oriented, his advice was, “don’t hire anyone.” The thought was that employees added cost, complication and headaches. This gentleman was making a very good living as a one man show, seemed to enjoy it, and there was validity to his viewpoint.
I gave that some consideration. It was true, especially back then, that I had the skills to simply work on my own, and since overhead would essentially just be me, it wouldn’t take that many customers to provide a very nice income. I had managed employees before, and was acutely aware of the problems that could accompany them.
I think that’s something that every entrepreneur should think about and consider. On the one hand, being a one man show, has its drawbacks. If you have any success at building a customer base, taking time off from the business can be difficult, the number of customers you can have is probably limited, and you can’t grow beyond what you can do yourself.
There’s also the problem of getting older. What’s attractive to you at 30 might not be acceptable to you at 50. And trust me, getting older, is the only alternative to dying. So put it into your plans.
The upside, is that it’s simple. I have a good friend that writes programs for industrial machines. He told me when he founded his business, he had two goals: to make more money, and to simplify his life.
He works from his home, and his business has been very successful. In fact, he was having to turn down business simply because he didn’t have the time to do it.
I suggested to him that he consider hiring another programmer, and reminded him that he was leaving money on the table by not accepting the other jobs. He reminded me that while that might help the first goal, it was out of line with the second.
I think, at least from a clarity of purpose standpoint, he has it right. That’s not how I would do it, but for his purposes, it’s the proper course of action.
This particular friend is comfortable working completely alone; but you might not be. Again, it’s just something you should think about. What’s right for one person is not necessarily right for another.
Once you do decide to hire another person, it changes everything.
I didn’t handle it all that well at first. I thought I knew how to manage people because I’d been reasonably successful at it before. But that seemed to change when the pressures of my own business hit.
I’d be gone all week calling on clients, leaving a couple of technicians and a clerk there to get repairs done. On several occasions I’d return to find the technicians stuck on the same problem they had when I left. I was well aware that meant no billings out the door while overhead continued to pile up; and, I was operating very close to the edge financially. To make matters worse, on several occasions the clerk had made mistakes in our administration system that required hours of my time to correct.
The stress of that, plus my own inexperience caused me to fly off the handle with the employees, rather than attempt to resolve the problems. In a couple of the cases, I should have terminated an incompetent employee much earlier, and in others, I should have spent more time coaching and helping them to be successful.
Yelling at people is not leadership; it’s bullying. It’s also unprofessional and unacceptable and I’m not proud at all of it. Pragmatically, it makes things worse not better.
Here’s what I’ve discovered.. the hiring process is important.. in fact, if you plan to have employees, nothing you do is more important.
Jim Collins, in his landmark book, Good to Great uses the analogy of a bus. He says that who is on the bus determines where the bus is going, not necessarily where you wish it were going. Spend time determining who should be on your bus.
Since we were a technical business primarily, I spent a lot of time attempting to test for technical prowess. That was my primary hiring criteria, and I would ignore almost anything else if they proved to me they could handle the job technically.
Even if I were hiring clerical types, I applied the same criteria. For instance, if the person had prior experience and could demonstrate competence with our accounting program, I’d hire them despite any other factors. Those were costly mistakes.
What I learned, the hard way, is that character, intelligence and attitude are the most important criteria. I remember during a presentation by Ross Perot years ago, long before he got into politics, he was asked how one could go about training employees to be more friendly to customers. Perot, in his classic style, shot back, “why don’t you just try hiring friendly people to start with?”
He was exactly right.
Collins has another piece of advice regarding employees: had you known when your hired this employee, what you know about them now, would you have hired them? If the answer is “no,” then you made a hiring mistake.
But, here’s a caveat; you have no right to terminate anyone to whom you haven’t been giving feedback about their failings. Everyone deserves a chance to correct their performance once made aware of the shortcomings.
In a strange and convoluted way, many of us do not want to be unkind to an employee. Hence we will not say anything negative about their work. Instead, we wait until we are so frustrated by the lack of performance, that we just terminate them with little warning. It goes without saying, that is hardly kind, and in fact, is incredibly unfair.
Terminations should never be a surprise. If it ever is, then you aren’t doing your job.
So, employees or not? For me, the answer is a resounding “yes!” I have been blessed with a terrific team of people at EMA, that have enhanced my life in many ways. Plus, we would never have enjoyed the success we’ve been privileged to have if the company had been dependent on just me.
Starting a business is a great American dream for many people, and it may be for you. My advice always.. go into it with your eyes wide open. And, that includes whether or not to have employees.
Eddie Mayfield