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Barbara Weltman

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Scaling Your Business: Expanding Your Staff

February 25, 2025 / By Barbara Weltman

Scaling Your Business by Expanding StaffSolopreneurs may be able to scale their business without having any employees. Depending on the type of business, they can outsource work to freelancers and independent contractors and use technology and e-commerce platforms to manage marketing, sales, and customer activities. But taking on employees, and at some point hiring additional ones, can help you scale your business significantly and at a faster rate. Doing this isn’t a simple matter, but going in with your eyes wide open can give you ideas on how to handle staffing and avoid problems.

What hiring can do for your business.

Why should you hire anyone? A one-person operation likely can only grow so much, and probably doing this at a slower pace. You may not be able to handle more growth entirely on your own and need other people to help you. Employees can:

  • Improve your chances for survival. According to the SBA and BLS, employer businesses have higher survival rates (BLS): 50% last 10 years or longer, compared with 30% for non-employee businesses. And two-thirds of employer businesses last at least 2 years.
  • Increase your revenue. According to a Fed report, nearly half of employer businesses are profitable, versus only 38% of non-employee businesses.
  • Improve the customer experience. They can deal with customer orders, returns, and complaints. They can augment chatbots and other automated ways to process orders. They can also help promote your business. As Richard Branson, entrepreneur extraordinaire, said “Your staff are the ones who will help you grow your customer base and keep your clients loyal.”
  • Increase innovation. The old adage “two heads are better than one” can translate into new ideas for growth.
  • Offer backup. Working on your own may leave you little opportunity for time off. Having employees to handle business operations when you are away can ensure the business runs smoothly, even in your absence. Taking time off can recharge your batteries and enable you to improve your business.

Cost of hiring

Before you hire anyone, be sure you understand the true cost of this action. The cost for an employee includes such things as:

  • Recruiting. You may be able to use free job lists (e.g., LinkedIn), but there’s still a cost here—your time to review applications and interview prospects.
  • Onboarding/training. The cost depends on what you’re hiring an employee to do.
  • Employer payroll taxes—federal, state, and sometimes local. The IRS has information on employment taxes.
  • Regulatory compliance. Recordkeeping to ensure compliance with the Fair Labor Standards Act (FLSA) and other laws is essential.
  • Employee benefits. Paid time off (vacations, sick, and personal days), retirement plans, and group life insurance are some benefits to think about.
  • Insurance. This includes workers compensation and can also mean health insurance.

Deciding what to pay an employee and what benefits to provide obviously depends on the job duties, your location, what competitors are offering, and other factors. Keep in mind a rule of thumb that the ongoing cost of an employee is about 1.25 to 1.4 times the salary. So, if you’re paying someone $45,000, your budget needs to accommodate $56,250 to $63,000.

Best strategies for maintaining staff

In today’s world, it can be challenging for employers to meet regulatory obligations as well as to retain motivated workers. Initially, owners may try to do things on their own, and later have someone in-house—an office manager or bookkeeper—oversee employee-related tasks. But growth may require more, and small businesses likely don’t have accounting or HR departments to help. What to do?

  • Outsource payroll responsibilities. This can be through a CPA or a payroll company such as ADP and Paychex.
  • Outsource HR responsibilities. In addition to payroll, there are a slew of benefits you must or choose to offer. Keeping track of how they apply to employees (e.g., eligibility, tax withholding, notices, reporting) can be overwhelming. Experts in the HR field, such as professional employer organizations (PEOs), which usually operate as co-employers—you hire and fire; they manage the paperwork for payroll and benefits—may be a good solution.

Final thought

Whether you’re hiring your first employee or looking to expand your staff, there’s a lot to consider. Make a plan so you can proceed effectively and accomplish your goals. For example, make sure your projected business growth will be steady enough to pay for added staff. Run the numbers.

And consider what Helen Keller said: “Alone we can do so little; together we can do so much.”

Tags expanding your business growing your staff hiring staff management

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