This morning, I was reading an article on Business.com about the difference between an accountant and a bookkeeper and why most businesses need both. It got me thinking about a broader mistake that too many businesspeople make – trying to avoid expenses by not hiring the right people. From my own personal experience – and from seeing the results when my clients went cheap initially – I have learned this is a huge mistake.
For entrepreneurs who are just getting started, startups before their first round of funding, and small businesses, spending money on hiring the right employees and outside vendors can hurt. But in the long run, spending some money up front will reduce what you have to spend later and will help you avoid headaches down the road.
Hiring The Right Employees
I’ve seen many businesses that saved money by going “cheap” with their employee hires. The problem is that these hires often end up not having the right skill sets (or not being good enough at certain skills). As a result, these businesses often end up having to fire these initial hires, find a new employee with the right skill sets, and then have the new employee redo all the prior work. This all means additional costs for the business.
Now, I’m not suggesting that you need to hire the most expensive employee for every job. What I am saying is that you need to think about the decisions you are making in hiring employees. Does the cheaper candidate have the right skill set? Are you sure? Is there a nagging feeling in your gut that you should hire the more experienced (and more expensive) candidate? I’ve learned that when you ignore your gut feeling, you are often walking into trouble.
Anytime you decide to hire a new employee, you should candidly ask yourself what skills that employee needs to have and be honest about how much it is going to cost you to find someone with those skills. And if you think you found someone who can do the job way cheaper than anyone else, I’d suggest remembering the old adage: if it seems to good to be true, it probably is. It might be a good idea in this situation to get more information on your candidates through apps similar to ClearStar to back up your gut.
Hiring A Lawyer
One place where I see businesses go cheap on a regular basis is foregoing basic legal advice on issues that are critical to their business. Business lawyers can help with all kinds of important legal issues, including helping you decide on a corporate structure, drafting management agreements, drafting shareholder/partnership agreements, drafting employment contracts for important employees, drafting confidentiality and non-disclosure agreements, and many more. Lest you think I’m just trying to convince you to hire me, I don’t focus on any of the issues listed above. I can help you create a plan for your intellectual property, but I would encourage every entrepreneur to speak with a general business lawyer as the first order of business, and you can click right here to find one in Kansas, or you can do a deep search online for the best lawyer in your local area.
Aside from helping you draft the relevant agreements, a lawyer can help you to understand exactly what legal issues you need to address. This will differ from company to company, and no amount of online research will get you the answers you can get from a business lawyer in a relatively quick consultation.
As someone who has seen the results of companies going cheap at the outset, I can tell you that hiring a business lawyer at the outset to get things set up properly may be one of the most important investments you can make in your business.
Whether you are considering hiring a new employee, a new vendor, or an outside consultant, I would suggest that you think twice before “going cheap.” You are investing your blood, sweat, and tears in your business. Investing a little bit of cash to make sure you hire the right person will minimize the blood and tears you have to spill going forward.