Save money with specialists and supercharge your business instead.
Written by Shawn Waugh
Growing your SMB can be equal parts exciting and frightening. Exciting, because it means you’re doing something right and the increased business justifies bringing on another employee. Frightening, because it means increased overhead and additional managerial work – especially if this is your first time expanding.
But when the workload begins to outpace your team, that doesn’t necessarily mean you need to hire a new employee. You could hire several specialists to your team for the same overall cost. Here’s why that can be a more efficient move for you.
The cost of a new employee
Hiring a new employee, especially if this is your business’s first time doing so, is an expensive decision. A full-time employee making minimum wage in most states will cost over $30k alone in payroll. Of course, your business will have to pay its contributions to state and federal taxes and the usual programs. On top of that, your first employee might cause you to get worker’s compensation insurance (if you don’t already have it). If you’re already insured, you know every dollar paid to an employee comes with an additional cost on your policy. If you choose (or are required) to offer health insurance benefits, add an extra few thousand dollars each year per employee to your operating cost.
This Quickbooks calculator is an excellent tool for estimating the yearly payroll cost of onboarding a new employee. But there are other ancillary costs, too, that come with a new hire, from hiring a recruiter, head hunter, or agency to acquire them to the equipment and software you’ll have to provide for them to do their work. On top of that, it may be challenging to determine what role that person will fulfill: do you have enough business that one person can be dedicated to a particular position? If this is your first time hiring, are you looking for a mini-you, a jack of all trades who can do a little bit of everything? Either way, you’ll now need to be sure you’re pulling in enough business to cover your new overhead.
The Cost of Specialist Teams
There’s a different way to grow, especially if you’ve read the 7 Steps to Prepare Your Business to Scale on Day 1. Look at your team from a project-based perspective rather than a role-based perspective. Do you need a 2nd-in-command who can help do a little bit of everything your business needs and take a load off your work, or would you be better-suited outsourcing one entire task, like bookkeeping, to a specialist? Not only would a CPA know the ins and outs of the tax code to maximize an SMB’s returns, but it would take a specific type of work out of a founder’s hands – especially a founder who’s been ignoring their primary work to be able to handle the other ins-and-outs of running a business. Bookkeeping can cost $70-120 per hour but frees up significantly more time for you and the rest of your team to create work or acquire new clients.
A project-based perspective isn’t just advantageous to solo founders, however. Even small- and medium-sized businesses can use this approach to their advantage: for example, by outsourcing projects to overseas dev shops or hiring an SEO specialist for an ad campaign.
Liquid and Your Specialist Team
Liquid was founded to help SMBs manage their flexible team of specialists. From spend management tools to automatic invoice matching, Liquid makes it easy to monitor your projects so they come in on time and on budget. Ready to punch above your weight and take on more clients?