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How to go from a 1-man business to a real company??

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I'd love to know how you went from a one-man business to employing people and becoming a "real company". The onyl way i can see it is by borrowing a large sum from the bank to cover your employee's costs from the start up. sounds rather daughnting...

have any of you not done that and just saved up to employ people???

How'd you lot do it????
 
The number one mistake is that too many people set their charges too low when starting out on their own citing "low overheads".

Big mistake if you want to grow into a company!

If you charged as if you had the overheads at the outset you would have a cash surplus to expand. No cash = undercharging = needs to jack prices/sales up to recover new overheads taken on IMO.

This is a simplistic answer and of course every situation is different - but it is amazing how many fall into this trap
 
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Well, any one of the below:

  • Took a risk
  • Went out on a limb
  • Took a gamble
Whatever you want to call it I guess. I was a one man (woman) band and ended up employing 6 girls for 16 years, I'm now back to a 2 man band. When I employed the girls in the early days they got paid before I did, simple as that - it was hard, but I don't regret it. We had a great team!:D
 
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PrivateInvestigator said:
I'd love to know how you went from a one-man business to employing people and becoming a "real company".
Click to expand...

One of the mistakes I've made in the past is thinking that what I did wasn't "a real company" because I didn't conform to other people's (and my) perception of what that should be.

I wasted money on things that I thought a "proper business" should have/do.

My model for growing what I'm doing now is to outsource and then look at bring it back in-house when I'm confident things are stable / when it makes financial sense.

I think getting employees should be driven by growth... rather than trying to grow by getting more employees?
 
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Before attempting to become a real company,please check your grammar and spelling.
Attention to detail will make your business look more professional and credible.
 
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I've been self employed AND on my own for 13 years this week.
Now running 2 limited companies, and really don't fancy the prospect of having all the hassle and associated costs of employing anyone tbh.
My turnover may not be fantastic, but my overheads aren't too high either.

If things go wrong, I've only got myself to blame, and not some spotty oink who I thought I could trust.
 
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We grew into a "proper company" by breaking our work down into chunks that could be subcontracted out one at a time.

This included all aspects of the business not just the actual building work, subbed out the accounting, marketing and administration as well as the actual work, thus freeing up my time to generate more work and so on.

P.S
The pedants in this thread is making me nervous!!!!
:)
 
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"Act as if" from day one. From the moment you start your company whether you're running it out of a shed (as we did initially) or a sparkling new office, always ensure that from the outside you look as though you're well established and professional.

I'll second Ray in that your charges should always match that of the market, don't undercharge just because you can afford to as it's much harder to hike your prices down the line for existing customers.

Don't treat the business bank account as an extension of your own, it's not. Doing so will lead to all sorts of issues.

Make sure you get your accounts and legislation right from the outset as small mistakes can bite you in the arse down the line if you get things wrong.

Treat each new customer as though they are your last and make sure you harvest (is that the correct term?) them to ensure that you squeeze as much cash out of each one as possible - it's much cheaper that way than finding new customers.

Be careful who you employ, a bad employee can suck you dry of time and money.

There are loads more but hopefully those points will do for now :)
 
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I've gone from 1 to 17 in less than 4 years with no start up funding other than credit card for supplies. every person I employ makes me money, yes of course they cost but you make a profit out of people as well as goods.

saving up is a months wages and NI, they will hopefully generaate their next months themselves.

spelling mistakes on purpose guys - honest!!!!!
 
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rjharrison said:
One of the mistakes I've made in the past is thinking that what I did wasn't "a real company" because I didn't conform to other people's (and my) perception of what that should be.

I wasted money on things that I thought a "proper business" should have/do.

My model for growing what I'm doing now is to outsource and then look at bring it back in-house when I'm confident things are stable / when it makes financial sense.

I think getting employees should be driven by growth... rather than trying to grow by getting more employees?
Click to expand...
I wholeheartedly agree with you.

Lay the foundations before committing to taking on long term staff. Having people help you with aspects of your business is often necessary, but keep them at arms length. Taking on employees is a huge commitment, don't underestimate how efficient outsourcing can be, especially to a small company just hoping to make it into their second/third year!

Anthony
 
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Every company will have different needs but thing that is certain is you will never build a business that is worth a decent £ return when you sell it unless you employ people.

All businesses who want to create something of value should aim at being able to standalone without the owners input in the day to day running. The only way to achieve this is through people working for you.

I am not saying it is easy. I actually think it is the hardest thing in buisness to find, create, and then gel the core team that will manage the business.

It is also a never ending job as often even when you have it, it will go stale need changed at certain times etc

Never underestimate the ability of outsourcing to help you grow the business. If you are a good project manager treat many of your requirements as projects and get outsources to do them.

You will need to develop a core team of emplyees but they can be supported by a range of expertise on a project basis by the market.

Identify what your best skills are then employ your first people of the opposite. For example when I bought my current company my first two employees were operational focused which allowed me to spend all my time on sales and marketing. The company could not afford them, but if I wanted to build a business it the company could not afford not to take them on.

My calculated risk was that I would sell enough to cover the employees. For you it may be that you want to do the doing then it may be that your first employee is a full time sales person etc
 
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Yea I have trouble with my Gran ma too, but she's dead, fully stopped, in a comma, hyphenated in the cold weather she was. innit !
 
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Most business owners make two mistakes when hiring their first employee:
1. Hiring to late.
2. Hiring without having built the systems that the employee is to run.

There is a fantastic example of this in Michael Gerber's book "The E-myth Revisited" - I almost cried when I read the first 90 pages and realized that I had done everything wrong - exactly as in the example. I'd strongly recommend that you read this book if you are planning on growing from a one man show (self employment) to a real business.
 
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Maybe someone said this but I didn't notice it so...

Put your monthly revenues for the past year (or as long as you have) in spread sheet then graph them so you can see the long term trend.

I don't know what you use to do your accounts but I strongly recommend Kashflow at http://www.kashflow.co.uk/?code=AFF2100568 they have a report function that will give you the facility to do this trendline reporting at the press of a button.

Then sit down and think hard about how much you are going to make from your exisiting/repeat customer base for the coming year and add in the amount you expect to get from business growth. Don't lie to yourself here (you aren't talking to the bank manager :D) be realistic and a little conservative. Now divide that all by 12 and input it and look at the trendline and forecast monthly revenues. If it looks like you can pay yourself and staff every month then go for it.

Remember though that most plans either look too easy or too hard so there is a point where you have to take a leap of faith because you, and nobody else, believe you can do it.

Oh and when you've done it remember.....you never give up...you always keep going.... because however hard it gets....you'll always do it!

Oh and forecasting will also quite rightly win over the bank managers because it gives them something tangible and realistic to make a decision on.

It's not how much you have...its how much you regularly make a month.

Good luck!

www.Spiritas.co.uk
 
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This is an interesting question - I have thought about it myself as a one-woman band myself.

I am not sure if you ought to check your reasons for employing someone - if you dont think you are a 'real ' company now, then why would having someone else being paid all your hard earned cash make you any more 'real'?


But if its because you cant cope with all the work then its easy enough. And you could start with someone part-time or a freelancer to see how the relationship works and whether you think your business can cope. A freelance person can be available exactly as much as you want them and you can arrange for little or no notice period. A nice way to get used to having someone else involved in your business.

Also when you have an employee you need to consider contractual arrangements, ContractStore.com has a lot of info and contracts for this. Go to the Employment category.

And good luck!
 
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