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Q: As a small company experiencing growth, it has been really exciting and challenging. How do we gauge the decision to hire production work and what is the trade-off between doing it yourself and having to commit the hours and money to an employee?

Nell Lindquist and Maggie Allen, co-founders
Hi Little One

A: Entrepreneurs frequently work themselves to the point of collapse before hiring. In the process, quality and reliability frequently suffers, as does the business' ability to meet customers' expectations. If your business is going to grow, it has to be able to financially support employees while allowing you to seek balance. So, you have to build in the pricing margins you need to support employees.

Let's be honest — no employee is going to work as hard, or care as much about the company, as you do. They will not be as productive, nor will they worry about expenses like you do. The training and management of an employee, hopefully multiple employees, will absorb a significant amount of your time. Employees require training, evaluation, payroll systems, HR systems, etc., but you can't grow without hiring and it's hard to survive as a one- or two-person owner-operated company. So you have to hire. But when?

Deciding when to hire requires balancing the need to meet customers' expectations, filling the demand for your product and managing your cash flows. So the key is assessing when demand for the product will consistently outstrip your ability to meet customer expectations and demand. You need to estimate the time it will take to fill the job, and how long it will take to train the employees. Put these together and work back from the date you will be unable to meet customers' expectations, and that gets you to an estimate of when you need to hire.

Becoming an employer is not easy, and not much fun, particularly initially. So prepare for it. Get the infrastructure in place (payroll systems, review and evaluation processes, job descriptions, etc.). Put a training plan together. Think carefully about the experience, skills and personality traits you need. Hire the right person, not the nearest person. I recommend against hiring friends or even close friends of friends. Employees need to be employees first.

David Deeds is a professor of entrepreneurship at the University of St. Thomas Opus College of Business.