Small-Business Answer Book

Q: My business is growing rapidly, and it's more than I can handle by myself. What kind of employee should I hire?
A: The obvious answer is that you want to hire somebody who is competent, able to work for whatever you can pay and truly interested in helping you grow your company. But to find an employee who can help your business, the question you really need to ask is, "What type of boss do I need to be?"

That's because the best way to hire and keep an ideal employee is to be an ideal employer. If you can't offer a health plan, for instance, you should provide other perks, whether it's flextime or permission to bring a pet to the office. If you're the type of boss who people want to work for, and your company offers its staff opportunities that they feel they can't get somewhere else, good employees will gravitate toward you.

There are some important guidelines to consider when hiring your first employee. You need somebody who has skills or talents you don't have. Look at all your shortcomings, and if your prospective employee seems to have qualities you wish you did, that's somebody worth considering. Even a slightly different mind-set about the business world might prove helpful. Certainly, you need to be able to work together, but if you hire a clone of yourself, your business won't have the varied skills and opinions that a successful company needs to move forward.

Q:I know I need business insurance, but how do I know if I have the right policy?
A: Although some people may disagree with this statement, you can almost never be over-covered, especially in this day and age. Unfortunately, you'll never really know if you have the right business insurance until you retire or sell your company. By then, if you've gone through any crises and didn't lose money or much income because your insurance company was there for you, you'll know that you chose wisely.

As a rule of thumb, one important type of business insurance to consider is business interruption insurance. Sure, you'll want to cover your assets with something like property and casualty insurance, but if your company is unable to earn income for three or four months because you're rebuilding the premises, you want to know that money will come in to bridge that gap. Or you may find that a major supplier is hit hard by a hurricane, an illness or another devastating event, and you need business interruption insurance to keep you afloat until you find a new supplier. What you really need to do is talk to your insurer or find an insurer you trust and have a discussion with him or her. Be candid about what problems your business could possibly face. If you or your employees frequently travel to dangerous countries, there's actually a type of insurance to help you in the event that somebody from your company is kidnapped and held for ransom.

Geoff Williams has written for numerous publications, including Entrepreneur, Consumer Reports, LIFE and Entertainment Weekly. He also is the author of Living Well with Bad Credit.

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This article was originally published in the November 2006 print edition of Entrepreneur with the headline: Small-Business Answer Book.

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