I remember when I first started freelancing. I was so worried – How will I get enough clients? Am I going to make enough money?
I ALSO remember that shortly after that panic phase, I was in over my head. After accepting all the clients I could get, I was working until past midnight every night of the week, forgetting to eat lunch, and mixing up my clients’ names. In short, I needed help.
If you are running your own business, whether it’s a freelance design company out of your home office, a party planning service, or a brick and mortar bakery, there will come a day when you just need help.
But as most small-business owners will tell you, the thing they love about work and the thing they dread about work is the employees. You will LOVE your employees. They make your life so much easier, they’re great company, and you really appreciate all they do for your business. But you’ll also get stressed out by your employees. First they need two weeks off, now they need a raise, and who knows what comes next. Let’s not even talk about payroll tax.
But don’t worry. Maybe you can’t plan for your employee’s niece’s birthday party that falls right on your busiest day of the year, but you CAN avoid some pitfalls. Start out on the right foot with your new employee by following these 6 steps.
1. Establish exactly what you need from them
You need to be very clear about what the project or position you will be and what exactly you expect of the freelancer. Guidelines need to be established!
2. Know the law
If you are not sure how to classify the person as an independent contractor or freelancer then use this: A Test for Determining Contractor Status. With most freelancers you do not have to withhold taxes from their wages, but if you hire someone full-time, you’ll have to consult with the tax man.
3. Write a contract!
Before you do anything, be sure to get a contract for the employee to sign. Instead of making your own (probably shoddy) contract, hire a lawyer and read our Legal Dos and Don’ts Guide. You HAVE to put this kind of thing in writing.
And remember to talk about paychecks. According to AllBusiness.com, a “good guideline is to pay no more than 20 to 30 percent of the total project price upfront, with the rest of the payments awarded based on the completion of three or four key project milestones.”
4. Give a lot of feedback
Give your employee guidance. You may be envisioning what you want differently than they are executing it. You need to be clear and have a lot of back and forth from the beginning. Otherwise you are both going to lose time and money if you let the work go on without saying anything.
5. Ask for references
Just because this may not be a typical company with a formal application and interview process doesn’t mean you can’t do a background check on the person you are hiring. Ask for references and call some of their past clients to see if it went well.
6. Have they done it before?
The biggest thing you need to know is if this person has completed a project similar to the one you are asking for.