At this morning’s Phoenix OpenCoffee Club Meetup a discussion started around how to know when to bring on additional people in a small business and some of the tips for doing so.

As a small, Phoenix Rails development company, Flatterline was particularly interested in this discussion. I’d been discussing this same topic with Chris Chandler the day before as we sense an expansion on the horizon, but are hesitant to bring someone on full-time. Our major point of concern is being able to provide constantly for someone else while we’re still figuring out our own business.

Jason Ayers led the discussion and we came up with a few things to consider when growing a small business. Here are some of the things we discussed:

1. Know the difference between a contractor and an employee – Jason related that there have been several times that he was treated like an employee, but was classified as a contractor. As a small business this can get you into a heap of trouble if you misclassify people. Consult with an attorney…
2. Build a network – Establish relationships with independent contractors that can help you out as needed. Even if you don’t bring them on as full-time contractors or employees, you can supplement your workforce more easily
3. Try before you buy – Bringing someone in on a trial basis as a contractor for a few months makes a lot of sense for a small business. You can’t afford to hire the wrong people, so there’s no need to rush into bringing someone into the company that’s not a good fit. Additionally, you can limit their hours so that neither party is entirely reliant on the other
4. If it’s not right, don’t hire – If someone isn’t the right fit, then don’t keep them on. You need to do what’s best for your business and sometimes that can be hard, but necessary

Overall, I thought it was a good discussion. Since I’m a new small business owner, I’d love to hear comments from other, more experienced business people.

What wisdom do you have for small businesses in Phoenix?

More of my rantings

• Quick Tip: Override Rails Generated URLs
• Rails link_to and HTML options
• Building a Strong Company Culture

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