Solid Cactus Blog

You think about it more often as business picks up and you’re burning the candle at both ends. The thought of hiring someone has crossed your mind plenty, but you’re not sure if “now” is the right time. Whenever “now” is, hiring your first employee is a huge step. You are taking on new people, new payments, new paperwork and new problems. It’s a familiar dilemma for most small businesses and one that requires planning and thought.

When Joe Palko and I started TheFerretStore.com, the “right time” came about four years in. We both worked full-time jobs (40+ hours a week) and packed and shipped orders until bed time. When it was no longer physically possible to keep up with the number of orders and effectively run the business, we knew it was time to start looking. We kept burning that candle at both ends though; even after our first employee came on board we kept our “day” jobs for another two years.

Be prepared: Your first hire will send ripples throughout your business. The most important thing to remember is that when you hire your first employee, you’re now responsible for maintaining a payroll and paying appropriate payroll taxes. If you plan to offer benefits, you need to research affordable health care policies. Your business is now taking a more professional shape, so you should consider writing an employee manual complete with a company mission statement and policies you expect your employees to follow. We also recommend a human resources seminar to become more familiar with the HR and employment laws for your state.

Hiring family is convenient. Or is it? The first place most people turn for help is their family. While this may be a good option over the busy holiday season or in a crunch, we believe if you hire relatives, be aware of the risks. True, you may know and trust them best, but as you add more employees it becomes increasingly difficult to treat family members like the rest of your employees. This can lead to tension in the workplace and at home. Many businesses hire relatives despite the risks. For the sake of your business though, remember that when it comes to policies and possible disciplinary action, all must be treated equally and fairly.

Many of the same risks exist with hiring friends. The upside is familiarity; the downside is discipline. In our case, our first employee was a friend whom we both knew and trusted. Hiring friends is much like hiring family. Make sure that you and your friend remember that during working hours, you have an employer-employee relationship. Also, as Mom would say, “choose your friends wisely.”

So what about our first employee? I’m proud to say that Jason Longo is still with us! After joining TheFerretStore.com in 1998, Jason moved over to Solid Cactus as Implementation & Support Manager for the Cactus Complete Commerce group in 2005.

Hiring your first employee is a big step in making your venture start to feel like a “real” business. It’s exciting, nerve wracking and it’s going to cost you some money. But it’s something that every small business needs to do to grow. If you do it right, you’ll have no regrets.

Most people are good people who want to do a good job. Too often we employers get in the way and spoil the mix. Improving the work environment is increasingly the "tech" model for business settings for an important reason. It takes so long to train people and make them productive that companies are trying harder than ever to retain them. I have managed businesses with high pay in an unfriendly environment, and lower pay in a friendly environment. I believe the friendlier the better.

It is usually cheaper to improve the work environment than to try to make up the difference in wages. For instance, a fifty cent per hour raise means very little to most employees. But with a staff of 10, fifty cents an hour for 40 hours means $200 per week to you. Compare that with coffee for 10. Figure Cups at $3, creamer $5, sugar $2, coffee $20 and it's only $30 a week. The good will far outweighs the tiny raise.

• Office Perks. Free soda, popcorn and snacks. Trust me; it's a little gift that pays a dividend--happy people!
• Office Pets. We have a rabbit. He's furry, friendly and soothing to be around (knock on wood, so far no one's complained of allergies...!).
• Friday Lunch. We often spring for lunch at the end of the week. It's a nice gesture and it's a couple of more dollars in the employee's pocket to start the weekend.
• Be flexible. For some people it's the time, not the money. So consider offering flexible scheduling and shift-sharing. Even if you don't have them all the time, they're more productive when you do have them.
• Comfort First. FSolid Cactus provides an attractive physical setting including comfortable chairs, proper lighting and the latest equipment. Our sister company TheFerretStore.com is a warehouse environment which provides comfortable floor mats, proper lighting, and the latest tools.
• Listen. We improve our businesses when we listen to our people. They have good ideas. Listening shows they are being appreciated.
• Money Counts. We offer many one-time performance incentives. They may be aimed at individual or group achievement. The key to the successful incentive is that it not be expected. This raises the general effort around the project or work to be rewarded.

There are many ways to make your people feel important. These little gestures add up to a positive work environment. So remember, happy people are productive people, and that makes happy bosses!

Firing an employee is never easy, but sometimes you have to do it in the best interests of your company.

Most companies will terminate immediately for things like coming to work impaired by drugs or alcohol, insubordination or rudeness to customers. Information companies like Solid Cactus take seriously any breaches of proprietary information and violations of client confidentiality. After the obvious, most companies have what is called a grievance procedure, a series of steps before termination.

Specifically, the circumstances under which people are fired tend to change whether your company employs people on an hourly scale or not. TheFerretStore.com, sister company of Solid Cactus, is a “pick and pack” warehouse setting. TheFerretStore.com employees are hourly workers who punch a clock. In a clocked environment, tardiness, absence and other attendance issues can occur. Meanwhile, Solid Cactus is an office with salaried workers and we are concerned with performance issues like lack of quality work. We do not hire people to fire them and we bet you don’t either. So Solid Cactus has a 5 step process to try to reverse bad work performance before it’s too late.

Five Steps to the End of the Plank

• Warning #1—verbal. This is where we verbally identify the problem with the employee and begin the process of documentation.
• Warning #2—written. This is the second step and the problem is identified in writing. The employee must sign off on the documentation showing that he/she received it and understands it.
• Warning #3—written. This is essentially the same as the second step. In many companies this is the point at which employees receive suspensions without pay. We don’t do it at Solid Cactus because our people are salaried.
• Warning #4—written. This is your last chance. With this final warning comes the wording “This is your last warning. If your work does not improve you will be terminated.”
• Step #5—you’re fired.

Many companies opt for a 3 step grievance procedure. At every stage though, try to determine: do your people have what they need (including training) to do their jobs? Firing an employee is never easy and always expensive. So do it carefully and do it thoughtfully.