We are excited to announce we will be moving to the Lakeview Center building on Eastchase Lane. Details to follow, as we get closer to our move date.
Growing your team—the right way
Sole proprietorships (sole props) are the simplest of all business entities to set up, but operating a sole prop doesn't mean you have to do everything on your own.
Some sole props remain "solopreneurs," but if you have your eye on scaling to expand, you'll need the help of others at some point. As you transition from a one-person show to a business with employees, consider these steps for success:
Before hiring employees, obtain an employer identification number (EIN).
The EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States.
Set up records for withholding taxes.
When you think about how to hire your first employee, take taxes into account. Before you start searching for the right employee, you'll need to fill out paperwork to pay three different types of withholding taxes: federal income, Social Security and Medicare.
Be flexible—there's no timeline or guide for you to start hiring.
As you manage daily business operations, think about what could be best managed by someone else. Define the role(s) you're hiring for. Do you want to bring on one person, like an executive assistant or project manager, or do you need both? Once you've narrowed it down and defined the roles, post your help wanted ad. Conduct interviews and background checks, and make sure the candidates are eligible to work in the United States.
Be prepared for HR responsibilities.
With new team members come new human resources needs such as onboarding, training, personnel records, payroll, benefits and more. IRS guidelines require employers to obtain copies of an employee's Social Security card and another form of identification. The employer also is responsible for having the new hire complete a W-4 form, which indicates the amount to be withheld from each paycheck for taxes. Employers must be sure they're withholding the proper amounts from an employee's paycheck and filing the appropriate tax forms on a timely basis.
After you hire employees, report your new hires to your state employment agency.
Next, you'll want to obtain workers' compensation insurance to protect yourself, your business and your employees. Most states require employers to obtain an insurance policy for workers who are injured or become ill due to a workplace exposure. Be sure to review your state's requirements and find a policy that suits your business.
Take care of payroll tax payments and reporting.
Once your first employee is hired, you'll need to set up a system to pay them and take care of payroll taxes. You can do payroll yourself, through an accountant or through a payroll service.
As you consider hiring employees, also consider hiring or outsourcing to a payroll, HR and tax compliance firm. These specialized firms understand that a small business owner has no such thing as a nine-to-five workday, and that your business, personal life and financial well-being are all intricately linked. Some payroll services also offer integration with your insurance provider and take care of new-hire reporting, which helps remove those headaches.
Remember, as you transition from a one-person sole proprietorship to a business with employees, your business model will change. You're no longer in charge of only you and your business; you'll have employees and added responsibility. Make sure you do your due diligence before you hire any additional employees, onboard them thoroughly and make smart use of their skills to help you achieve the next level of business success.Back to issue