Hiring to expand my business

AngieatHeritage · ‎February 27, 2018

I'm not sure where to get this advice, but I thought I'd start here. I have hesitated to hire someone to help in my small cloud-based bookkeeping business. It is essential for growth and my own sanity, but I am really stuck knowing what to pay someone who then also sees what my clients pay me. It's just a unique arrangment. If they are helping by entering transactions and reconciling accoutns, they will have intimate knowledge what that client is paying me for him/her to do the work.

EmilyCowan · ‎February 28, 2018

Hi @AngieatHeritage - welcome to QB Community! This is absolutely the right place for these types of questions, and I'm so glad you asked this particular one here :smileyhappy:

First of all, congratulations on expanding your business! Are you envisioning bringing someone on in a partnership role or simply hiring an assistant? If the latter, you might start by trying to figure out what the going rate is for a bookkeeping assistant in your area. If you're prepared to pay a fair and competitive salary then it seems to me it shouldn't matter how much the business is bringing in overall.

Anyone else want to jump in here? @SteveChase, @Adam_Fenner?

It must be pretty daunting to consider hiring someone else to work for the business you've built entirely on your own. You've reached a point where hiring help is "essential for growth and sanity" for sure, but giving up a measure of control - that can be a bit crazy-making, too! For some thoughts from other business owners on making this leap, you might check out this article on "hints before you hire."

Hope this helps!

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Charles1 · ‎February 28, 2018

Hi @AngieatHeritage. I am new here as well. Congratulations on getting your business to that point. I am just starting out on my own and look forward to reaching that level one day as well. My thoughts on your issue are:

1.) In addition to whatever wage you pay your new employee, there are more expenses involved than just the wages; workman's comp, payroll taxes, benefits (if offered), possible increase in your liability insurance, in addition to all your existing operating expenses. In other words, not all of the difference between what you pay your new employee and what you bill the client is 100% profit to you.

2.) You are the one that got the client(s) in the first place. Your name, your hard work does have a value to it.

3.) Along with my second thought, YOU are the one that is ultimatly responsible for that client(s). If the new employee makes an error, you, and your company, are the one that will ultimatly be held resposible. Risks also have a value.

Your new employee should understand all of this, but if the question should arise in the future, I would explain this to them. I would also suggest discussing with your lawyer on the merits of any employees signing signing both a non-disclosure agreement and a non-competitive agreement.

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john-pero · ‎February 28, 2018

Congrats on being able to expand such that you are too busy for all the work you have. Don't be afraid to let your new employee "in" to the business. I have seen many questions regarding user restrictions that jsut don't make sense once you think them through. A business wants a payroll clerk to not be able to see what everyone makes. Without that ability the tasks of creating paychecks can't happen.

Or take a simple store with a cash register and the employee is expected to balance the drawer at shift end without knowing how much came in? They are asked to count it! Of course they will know how much it is.

Did you know one of the lowest paid professionals entrusted with our mopney are bank tellers? We trust that they immediately forget the account balance they just viewed.

So, you don't hand a new employee the keys to the kingdom and go on 6 month trip to Tahiti. But you do proper vetting in the hiring process, train them in your procedures, and check on them regularly.

Feedback from your clients will tell the story.

View solution in original post

EmilyCowan · ‎February 28, 2018

Hi @AngieatHeritage - welcome to QB Community! This is absolutely the right place for these types of questions, and I'm so glad you asked this particular one here :smileyhappy:

First of all, congratulations on expanding your business! Are you envisioning bringing someone on in a partnership role or simply hiring an assistant? If the latter, you might start by trying to figure out what the going rate is for a bookkeeping assistant in your area. If you're prepared to pay a fair and competitive salary then it seems to me it shouldn't matter how much the business is bringing in overall.

Anyone else want to jump in here? @SteveChase, @Adam_Fenner?

It must be pretty daunting to consider hiring someone else to work for the business you've built entirely on your own. You've reached a point where hiring help is "essential for growth and sanity" for sure, but giving up a measure of control - that can be a bit crazy-making, too! For some thoughts from other business owners on making this leap, you might check out this article on "hints before you hire."

Hope this helps!

Charles1 · ‎February 28, 2018

Hi @AngieatHeritage. I am new here as well. Congratulations on getting your business to that point. I am just starting out on my own and look forward to reaching that level one day as well. My thoughts on your issue are:

1.) In addition to whatever wage you pay your new employee, there are more expenses involved than just the wages; workman's comp, payroll taxes, benefits (if offered), possible increase in your liability insurance, in addition to all your existing operating expenses. In other words, not all of the difference between what you pay your new employee and what you bill the client is 100% profit to you.

2.) You are the one that got the client(s) in the first place. Your name, your hard work does have a value to it.

3.) Along with my second thought, YOU are the one that is ultimatly responsible for that client(s). If the new employee makes an error, you, and your company, are the one that will ultimatly be held resposible. Risks also have a value.

Your new employee should understand all of this, but if the question should arise in the future, I would explain this to them. I would also suggest discussing with your lawyer on the merits of any employees signing signing both a non-disclosure agreement and a non-competitive agreement.

AngieatHeritage · ‎February 28, 2018

Thanks so much! I am merely wanting to bring on someone as an assistant bookkeeper to help with my low-maintenance clients and allow me to grow. This will most likely be an acquaintance or friend (at this point) because I just need something a couple hours a week--and it may just be some contract work. I"m just having a hard time paying someone hourly to handle a client where they are actually recording the client's payment to me. It is quite a bit of margin. I feel like this is an unusual arrangement compared to most contract/employee relationships. I also can't offer anyone 20-40/week at this point. I'm actually toying with value-pricing their help to me as I'm value-pricing with my clients.

Charles1 · ‎February 28, 2018

I can understand that, but you must still remember, and take into consideration the experience level of the one you bring on, the added risk, if you will need to spot check their work, the value of your name and reputation. Also, do not under-estimate the value the experience will give them, even at just a few hours per week.

AngieatHeritage · ‎February 28, 2018

Super! I think I just needed a little pep talk and perspective! I actually posted that second time around the same time you posted so I didn’t see it first. I hope I didn’t seem to disregard your advice.

I plan on using Hubdoc to communicate statements and receipts. However, hubdoc doesn’t support most banks I need. Does anyone know of another platform that is similar to Hubdoc that fetches statements?

SteveChase · ‎February 28, 2018

That is the beauty of bookkeeping. You get to see everything. Just because they see what is coming in at full value, often younger proffesionals don't see the full picture the burden the business owner has on paying taxes, and business expenses, and maybe trying to pay off a business loan. I would change the position to wanting to really help someone else develop skills in the bookkeeping world and transparancy is the key. Also being able to have a profitable business is a great sign you are providing value to the customer.

john-pero · ‎February 28, 2018

Congrats on being able to expand such that you are too busy for all the work you have. Don't be afraid to let your new employee "in" to the business. I have seen many questions regarding user restrictions that jsut don't make sense once you think them through. A business wants a payroll clerk to not be able to see what everyone makes. Without that ability the tasks of creating paychecks can't happen.

Or take a simple store with a cash register and the employee is expected to balance the drawer at shift end without knowing how much came in? They are asked to count it! Of course they will know how much it is.

Did you know one of the lowest paid professionals entrusted with our mopney are bank tellers? We trust that they immediately forget the account balance they just viewed.

So, you don't hand a new employee the keys to the kingdom and go on 6 month trip to Tahiti. But you do proper vetting in the hiring process, train them in your procedures, and check on them regularly.

Feedback from your clients will tell the story.

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Hiring to expand my business