When It's Time to Take On Help

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The Wall Street Journal
January 16, 2011

After six months of running a marketing-services business on her own, Julie Ladd reached a breaking point.

"I was working 70-plus hours a week and wasn't able to get the turnaround time that my clients needed," says the first-time entrepreneur, who started CopyShark.net from her Cincinnati home in late 2009 following a layoff from a financial-services firm. "I also had to solicit new business and handle the administrative needs of my existing business."

To take some of the load off, Ms. Ladd began hiring workers on a project basis through oDesk.com, a freelancer marketplace that offers tools for managing remote talent. (Similar websites include Elance.com and Guru.com.)

"You need to place a value on your time," she says.

While most businesses start out as solo enterprises, few can afford to stay that way. At some point, experts say, taking on help -- whether it's temporary telecommuters or on-site full-timers -- is typically vital to a young company's survival.

"If you're focused on the minutia of answering phones or doing paperwork, or if you're losing business to your competitors, that's a good indication you've got to hire" help, says Melody Vaught, who teaches entrepreneurship and career planning at Santiago Canyon College in Orange, Calif.

New business owners need to devote the bulk of their time to profit-generating tasks, such as business development and customer satisfaction, she adds.

Of course, hiring even just one person can be costly -- and not just in terms of pay, taxes or other monetary expenses. The move typically also requires investing time in identifying competent and trustworthy recruits, as well as training and supervising them, says Howard Lewinter, a small-business consultant in Delray Beach, Fla.

"If they are productive, they are a benefit to your company," he says. "But if you have to teach things over and over again, they're going to be a drag on your business."

Todd M. Schoenberger tapped a former colleague from a financial-services firm, which had laid off both of them in 2009, to be the first employee for his start-up, LandColt Trading, an investor-advisory service in Wilmington, Del.

"I worked well with him in the past," Mr. Schoenberger says of the recruit, who he brought on to handle a range of critical technology-related duties that he isn't skilled in doing himself. "I had 100% absolute confidence in hiring this person."

Mr. Schoenberger saw another benefit to choosing his former co-worker: the opportunity to give a job to someone who was unemployed and willing to be paid a percentage of monthly sales rather than a steady salary. The arrangement "was a way to [provide an] incentive to this individual to work not just harder but also faster," he says.

Maria LaMorte-Wright took a different approach. She found her first employee for the CMIT Solutions franchise she bought in 2009 -- a contract worker she could call upon only when necessary -- by asking a fellow franchisee in her area for a referral. "I was able to immediately take advantage and start servicing clients," she says. "I didn't need to do any training."

Ms. LaMorte-Wright invested in the technology-services franchise, which she runs out of her Scotch Plains, N.J., home, after getting laid off from a company in the same industry. She says she needed to hire a technician to assist clients from the get-go because her background is in management.

Now that her business is growing, Ms. LaMorte-Wright and another CMIT franchisee are looking to hire and share a full-time employee who will be dedicated to servicing just their clients. To save on recruiting costs, they've posted ads on free job boards like Craigslist.com and have been spreading the word to local trade groups, says Ms. LaMorte-Wright.

To avoid getting bogged down by r[eacute]sum[eacute] submissions, entrepreneurs may need to take special measures. Jake Bronstein says he learned this lesson while seeking out his first hire for Maxfield & Oberton Holdings, a retail company he launched in mid-2009 that exclusively sells magnetic toys called Buckyballs.

Mr. Bronstein, who worked as a consultant to a bottled-water company until it went out of business, says he wanted someone to keep track of money flowing in and out of his start-up while he concentrated on sales and marketing. But after posting an ad online for a bookkeeper, he received an avalanche of applications in a matter of hours.

"It was overwhelming," he says. "Ninety percent were cut-and-paste cookie-cutter letters from people who didn't even read my listing."

These days, Mr. Bronstein uses a slightly different method for attracting quality candidates. He still advertises job openings online, but he includes a footnote in his ads asking applicants to demonstrate their attention to detail by emailing him résumés with the words "green M&Ms" in the subject line.

He says he got the idea from reading an autobiography by rock musician David Lee Roth. And it helps him hone in on a smaller volume of applications. Now, for every 300 or so applications he receives, only about 75 have the correct subject line. The New York-based entrepreneur currently has six employees.

--Email: sarah.needleman@wsj.com

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This page contains a single entry by CFED published on January 18, 2011 4:51 PM.

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