How Small Businesses Can Overcome the Challenge of Expanding Their Employee Roster

While it is hard to deny that our country is fighting an uphill battle towards economic recovery, solutions to our fiscal woes are at our fingertips. With the days of the "quick fix" behind us and the fiscal cliff rapidly approaching, two potential generators of growth remain: small business and job creation. Small businesses, after all, are an important source of jobs. According to the SBA, small business accounts for 64 percent of net new private-sector jobs and 49.2 percent of private-sector employment. As a small business owner, I would argue that the intersection of the two- job creation by small businesses- is an even stronger source of momentum for our economy. The SBA also accounts small firms with the creation 67 percent of net new jobs since mid-2009. With the country slowly but surely recovering from the recession, small businesses must now focus on ways they can grow and succeed in the future- not just survive in the present. The answer across the board, while not simple, can surely be found in job creation.

As a business owner, franchisor, and member of several entrepreneurial organizations, I often hear small business owners discuss the challenge of expanding their business, especially in a down or recovering economy. And while surviving, nonetheless expanding, is a significant challenge in times other than economic prosperity, it's not impossible. Over the past three years, we were able to grow our company by almost 300%, adding jobs both in our corporate headquarters and several of our locations across the country. And while I'd like to think that our business had access to a "secret sauce" that helped us expand, in a recession for that matter, there are certain tactics any small business can employ that will help them create new jobs while increasing profitability:

Consider franchising your business: Through franchising, you can expand your brand and also create jobs on a much wider scale while not over extending the resources of your headquarters or initial company investment. Franchises provide others the opportunity to own and run a small business and hire a bevy of employees, with the security of a brand that is established and recognizable from day one. College Hunks was able to expand at the rate it did because we decided to pursue the franchising route. Any one of our franchise locations employs as many as 25 people at any one time. With 48 franchises nationwide, we now have over 500 employees on our roster. That's 500 new jobs we were able to create since our inception.

Create mini-entrepreneurial side ventures: Entrepreneurs are often chasing new opportunities by nature - they are always dreaming up the next "big thing." Take the opportunity to test out a new idea, tasking an employee or team member from your current business with executing a new venture. Developing a new idea organically, as opposed to launching an entirely new venture, is a cost-effective, risk adverse path to not only creating a new business, but could lead to job creation. When we first launched, we were focused solely on junk removal services. We wanted to test the possibility of adding moving services to our company, so we appointed an employee and created a budget for that person to pilot test College Hunks Moving. The test-run turned out to be very successful, and ultimately became a key aspect of our business and brand.

Hire based on return on investment: One of the main reasons many businesses don't hire is because they can't afford to. Taking on a new employee means a monetary investment. And these days, many small business owners don't have the money, can't get the money, or can't justify the investment in the new hires. To overcome this obstacle, small business owners should consider implementing a structured compensation plan that gives a better chance at a positive ROI. Position compensation should be based on either commission or performance. Even if they are not sales people, their role needs to be justified based on the ROI it provides. The profitability of each position should be justified and mapped out upon hiring so the employee understands his or her accountability and goals for their role. If a support person frees up your time as the owner to focus on sales, then the sales you generate will offset the cost of the support person and then some.

Dismissing job creation within small business as an easy task is simply ignoring the realities business owners face in the current economic environment. Franchising, pursuing ones entrepreneurial spirit, and hiring based on ROI are all steps small businesses can take to expand their operations and take on new employees, all while contributing to their bottom line. Now is the time for small businesses to strategically implement tactics that their profitably and the country's fiscal outlook. Simply put, we owe it to ourselves and to our communities to help pave the road to economic recovery by creating new jobs and finally putting people back to work.