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Growing your business – employing staff and outsourcing (case studies)

30 Jan

Sneak preview of the image from my new bookOnce it’s time to grow your business, you will need to make a decision on whether to employ staff. Duncan Brown has given us the expert’s view on this topic, and now we’re going to hear from two people who have approached this in two very different – but equally successful – ways.

Nathalie Rush runs Six Star Group, which is an insulation business. She has been employing people right from the start, and has used a variety of different methods to find them, and gained a lot from employing people directly, although she does still use sub-contractors when needed.

Nathalie reports that in her line of business, job websites are cheaper to use than local newspapers, but she doesn’t think that tradespeople use the websites so much. Word of mouth has been quite successful. It’s important when advertising for staff to use the channels that the kind of people you’re looking for are likely to use, otherwise you’ll waste money on costly adverts when a word in the ear of the local university’s careers centre or just putting the word out that you’re looking for people might be just as effective.

Nathalie has found that one hands-on approach works really well for her:

Paying someone to work with you for a week’s experience can often be a good way of finding out their qualities. You’ll quickly know if you’ve got a rising star or not.

She has also developed a working relationship with a training centre in her industry, which she says is “proving to be a great way of finding hard-working, professional people”.

What is the advantage of having full-time employed staff for her business? “It means we can serve customers when we want and we don’t need to rely on sub-contractors”, although, as I mentioned, sub-contractors are brought in for the larger jobs. And she’s enthusiastic about the process, too. ”

It’s a joy to give someone a job. I get the biggest kick out of it and spend a lot of time training and motivating my team. After all, we are a business that sells a service and what good is that if the people can’t deliver what the company promises!

On the topic of sub-contractors, you do have to be careful when sub-contracting, especially if you’re in the construction industry. Nathalie explains: “Because of the line of business we’re in, I have to register every sub-contractor through the Construction Industry Scheme. This ensures everyone is taxed and it’s reported monthly to HMRC”.

And while she outsources the work on occasion, she is also careful not to take on too many admin tasks in-house that can be done by an external supplier: “Employing people comes in all shapes and sizes and it’s certainly handy to be able to outsource any paperwork you can that comes with running a business”.

What’s Nathalie learned from the process? As Duncan explained in his expert’s view, it is vitally important to outline all rights, roles and responsibilities up front. Nathalie says:

I’ve employed people in the past and it took me a while to work out exactly what the responsibilities of different roles should be. It’s clearer if you can explain the role, working times, use of mobile phones, holidays, etc. from the offset and not change things like this as it can be de-motivating.

John Ellery of John Ellery Consulting, a firm specialising in grant fundraising and grant making, has taken a different approach.

Six months on from setting up his business, he found that he was struggling to keep up with the work coming in from his clients and his growing to-do list, and it was clear that he needed some support. However, he was concerned about the sustainability of employing someone when his business was so new and he wasn’t yet able to predict the peaks and troughs:

Whilst the obvious option was to investigate employing someone my cash-flow situation would be very tight and whilst I had too much work at the moment who knew if this would still be the case in say three months time – last thing I would want as a new business is have an employee sitting around with no work to do.

His solution was to start using people who were happy to work on a freelance basis. To date, the work he has outsourced in this way has included admin support, consultants, marketing/sales and web design. Each time that he has started working with a freelancer, he has initially outsourced a single piece of work with no promises of on-going or future jobs. As he reports, “This has been extremely effective with the vast majority of freelancers I have used already very much used to this arrangement and were able to pick up my business, ethos and approach extremely quickly”, and he has continued to use this method of supporting his business and thus allowing it to expand.

How has he found freelancers? Mainly online, through Google searches and websites such as People Per Hour or Elance and even FiveSquid and Fiverr [the last two offer usually limited projects for £5 or $5; while this can lead to price undercutting, many reputable freelancers use them and ramp up the price to an acceptable and sustainable level for freelancer and client once a more complex project is in the offing].

The advantages are clear: being able to pick and choose, using people who are accustomed to this way of working and can mesh with the company’s objectives and style, and not having the overheads, legal issues and paperwork associated with employing staff. Are there any disadvantages? John says, “At times I have found that freelancers are not keen to show their work in progress and prefer to contact you when a job is completed. Whilst usually this hasn’t been an issue the occasional freelancer has produced a piece of work that was unsatisfactory and could have been easily addressed if the work was being done by an employee at the desk next to me”.

And does he recommend this method of using other people to expand your business?

Absolutely, however the secret is to find those tasks that can be outsourced. These may be tasks that you usually complete yourself, but by outsourcing these they will free up your hands.

So, two different ways of going about expanding your business through using the support of other people, whether using directly employed staff and officially registered sub-contractors or outsourcing to a series of freelancers. Both companies have profited from these methods, and it just goes to show that there is often more than one way to achieve your business aims.

Thank you to Nathalie and John for their input into this article.

Nathalie Rush Six Star Group – Twitter

John Ellery John Ellery ConsultingTwitterFacebook

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This post is part of my series on growing your business. Read more here and read about my own business journey in my book, Going It Alone At 40.

 
3 Comments

Posted by on January 30, 2014 in Business, Guest posts, Organisation

 

Tags: ,

3 responses to “Growing your business – employing staff and outsourcing (case studies)

  1. Sean

    April 22, 2014 at 4:05 pm

    As a freelancer personally love working at home, which allows me to balance work and play without the need to dress up and walk to an office, some people may prefer otherwise but it’s a matter of preference. If you are looking for skilled individuals to work on a wide range of tasks for a startup or an established business I’ve had good luck finding freelance jobs at https://hubstaff.com/staffing.

    Like

     
    • Liz at Libro

      April 22, 2014 at 4:20 pm

      Thanks for your recommendation there, Sean. I personally also don’t want to go down the office and employing people route, but it is something that many people do choose to do.

      Like

       

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