There are many perks that come with owning a business, including independence, flexibility and an unlimited salary potential. However, startup business owners must remember that with those perks come inevitable letdowns and mistakes. There is a yang for every yin, and while entrepreneurship can be extremely rewarding, such rewards don't come without ongoing sacrifice and tribulation.
Every entrepreneur has an optimistic side and wants to see the best in people, but the seasoned businessperson is on the lookout for flaws. This is because a company is only as good as the people working for it. And unfortunately, managing workers can be one of the most difficult aspects of entrepreneurship.
I had to learn the hard way how poor hiring decisions can have a negative impact on your bottom line. I made the mistake of hiring a sales person who completely lacked sales skills, exhausted all of my company's resources and ended up resenting me for their inability to earn a greater salary because it was tied to performance goals that were never met.
Despite such a bad -- and costly -- experience, I picked up a few things that business owners should be conscious of to make smarter hiring decisions in the future:
- Don't try to measure someone's potential. Looking back, I remember how optimistic I was about hiring a professional who didn't have all the necessary skills of fulfilling the company's needs. Due to all the potential I saw within the candidate, I took a chance. Unfortunately, my faith that the potential would manifest led to some failure at my company’s expense. The opportunity cost of bringing on such a team member -- one who isn't equipped with the expertise required to meet the goals of the position -- means losing out on someone that could have adequately filled the role, improving the company's bottom line rather than absorbing it. As a former people-pleaser, I now focus on people that have a proven track record.
- Don’t let yourself be a guinea pig. As a CEO, never assume that a potential employee is actually open to a new opportunity with a startup. The sobering fact is, most people are seeking a way to use your company's brand as stepping stone to another opportunity, while working to receive a paycheck. In today's society, much of the workforce is motivated by money. Not everyone is a team player, and some are merely punching the clock. I recommend placing new hires on a 30-day probationary period, so you can keep a watchful eye on efficiency models, measures and productivity trends internally. Calculated risks and long-term rewards are on the line at any given moment, so hire individuals who have a passion for what you do and admire your line of work. These are the people who will give you 100 percent.
- Don't think you can change every candidate. When hiring a staff member for your business, look for a professional who is naturally committed to problem solving. The people that like to point out problems will always find new problems; while problem solvers will always find solutions. Someone pointing out every little flaw is useless to your business unless it's followed up by suggestions on how to fix them.
- Don't waste payroll on personal brand pushers. Entrepreneurs, be wary of professionals who seem too focused on their own personal brands. It's a telltale sign that they may not be fully committed to the longevity of their time with your business, or your business altogether. While personal brand promotion is somewhat inevitable, devoted employees often tread lightly. The business brand must always supersede the personal brands of its key staff.
Naturally, not everyone is going to work as hard as the CEO, because no one will care more about your business than you do. But always remember that your employees have a vested interest in themselves as well. Be selective about who joins your team and gains bragging rights for your company's successes. Even more so, the people you bring on board will essentially become a reflection of your brand. Keeping these don'ts in mind will minimize the risk of making hiring decisions that will inevitably have a negative effect on your company.
Kimberly E. Stone, founder of POSHGLAM.com, is an entrepreneur with a knack for recognizing creative talent and pinpointing successful fashion lines. She has been featured as one of Black Enterprise's Top 10 Women of Power under 40, and continues to set the standard for Social Media in the Fashion 3.0 realm.
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world's most promising young entrepreneurs. The YEC recently published #FixYoungAmerica: How to Rebuild Our Economy and Put Young Americans Back to Work (for Good), a book of 30+ proven solutions to help end youth unemployment.