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So what's Eentreprenew?

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Introduction

SO WHAT'S ENTREPRENEW? By Melanie Low 024803819 Winter 2004 Submitted to Dr. Mary Han School of Business Management in partial fulfillment of the requirements for ENT 526 - Introduction to Entrepreneurial Behaviour February 12, 2004 Ryerson University EXECUTIVE SUMMARY This paper discusses the many issues and concerns that entrepreneurs face when hiring their first employee. For small business owners, hiring an employee can be a frightening due to lack finances and the high risk level. Therefore they must do their research in order to make an informed decision. Deciding when and whom to hire are critical factors. Timing is an important factor because the owner must have the financial means to hire and have the product demand to justify the need for a new member. The right person is also critical because it can be costly for small businesses to go through the hiring process. Losing a valuable employee is like losing an asset and can also have a damaging affect on the company. Therefore, it is important to offer adequate compensation or affiliation to the company for the employee. The First Employee discusses the many issues faced by sole proprietors when their business reaches a growth stage where they are no longer able to manage their venture single handedly. The article features Carrie Wong, owner of Practical Gourmet. Carrie has made the decision to hire a new employee to support the growth of her enterprise. ...read more.

Middle

al., 1992) and (Stines & Kliner, 2003). A second indication of needing help is if the owner is overwhelmed by tasks and finds that they are letting things "slip" (Wahlgren, 2004). Thirdly, customer dissatisfaction is a telltale sign that improvements need to be made. Contrarily, most entrepreneurs have a high level of affiliation with their business including established relationships with their clients and quality assurance by making the products themselves. The owner's involvement in these aspects of the business can be significantly reduced as the business grows. This can pose as a great risk in profits to the business. However, waiting for too long a period to hire someone can also be detrimental to the business. If these risks are properly calculated and the growth strategy is planned, the results can be very rewarding. 4.0 Other Considerations Before Hiring a New Employee It can be very costly to take on a new member. There are many aspects of hiring an employee that require careful consideration. This can include issues such as: uniforms, compensation, training, laws applying to employment, safety regulations, salaries and wages, paperwork, etc. According to Stines & Kleiner (2003), the small business owner is at a disadvantage... if the owner does not do his homework up front, the hiring of an employee can be a very expensive learning experience. Therefore, it is important that the employer decide what competencies the new employee must have and match them to the job requirements. ...read more.

Conclusion

Once Carrie found a good candidate to fill the position, she offered him a share in the profits after two years. She recognized the importance of rewarding him beyond his standard pay and gave him a chance to benefit from the growth of the business as a result of his contributions. It is also important for small business owners to realize the potential of their employees. This can be an advantage to their company if they capitalize on these assets. Borgman, (1973) suggests that by giving the employee a greater chance for involvement in the company, more responsibility and growth opportunities they will in turn invest more interest in the success of the company. 7.0 Conclusion An entrepreneurs' decision to hire their first employee can be frightening. It can be very risky and costly; therefore the employer must do their research and make an informed decision. If the correct practices and plans are employed, then the process should be less intimidating and more rewarding. The small business owner must consider when and whom to hire in order to make an informed decision. Timing is an important factor because the owner must have the financial means to hire and have the product demand to justify the need for a new member. The right person is also critical because it can be costly for small businesses to go through the hiring process. Losing a valuable employee is like losing an asset and can also have a damaging affect on the company. Therefore, it is important to offer adequate compensation or affiliation to the company for the employee. ...read more.

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