From the March 2003 issue of Startups

(YoungBiz.com) - Jen Keller didn't expect a crash course in being an employer when she opened Strung Out Beads and Wiring nearly three years ago, but that's exactly what she got. "Right away, we knew we would need employees," says Keller, now 18. Even before the make-your-own-jewelry store in downtown Somerville, New Jersey, opened, she hired workers to unpack inventory--exotic beads of all materials--and help set up displays. After opening, she employed friends from school, but soon she realized she knew little about being a boss.

Like Jen, most new business owners find the prospect of hiring employees a little intimidating. Not only must you conduct interviews and decide whom to hire, but you also have to train, manage, reprimand and even occasionally fire those you've hired. Oh, and don't forget that you have to pay them, too (and decide how much to pay them).

But aside from interacting with your employees on a day-to-day basis, there are numerous laws employers must abide by. There are federal, and sometimes state, laws regulating everything from the lowest hourly wage you can pay an employee and reasons you can give for not hiring someone without being guilty of discrimination, to what you must withhold from employees' paychecks and requirements for providing a safe and healthful workplace.

Before you run screaming in terror, though, relax and remember that it pays to do your research long before you conduct your first interview. A good place to start is the SBA's Web site or a local Small Business Development Center.

Keep It Legal
Most employers will probably agree that steering clear of legal problems is the biggest downside of hiring employees, but there are many upsides as well. Besides the fact that many entrepreneurs can't run their businesses single-handedly, employees, according to Keller, offer a fresh perspective. "Employees are great because they offer another pair of eyes," she explains. "They come up with great ideas and offer wonderful insight."

So now that you've done your legal homework and decided that it's time to put the "Help Wanted" sign in the window, what's next? First of all, it's best to have a hiring procedure thought out in advance. Consider how much you're willing to pay (if you want to go above the federal minimum wage), hours you want employees to work, and questions you'll ask during interviews. Standard job applications, which ask for vital stats as well as employment/education history and references, can be purchased at most office supply stores and are a good investment.

Of course, what you look for in employees largely depends on the kind of business you own. Keller says she wants employees who are interested in making and selling jewelry and working flexible hours. She says being realistic is also important. She doesn't expect, for instance, a long-term work commitment from her mostly teen employees, and she takes short-notice requests for days off and termination of employment in stride.

Getting Down to Business
The hiring process doesn't end once an offer is accepted. New employees will, of course, need at least a few weeks of training before they really get into the groove of things. Keller stresses that it's up to the boss and the new employee to make sure the process is successful.

To ensure success, Keller put down store rules on paper, a copy of which she requires employees to read and sign. In addition, she also believes in creating a positive work environment where employees feel valued and respected.

In spite of the best intentions, however, not every employee will work out. Keller found this out firsthand when one of her workers consistently showed up late or called in sick. As with her hiring process, Keller had a procedure worked out in advance to deal with just such scenarios. She says it's important to decide beforehand what employee actions an employer will and will not accept and to make a plan for dealing with them.

For Keller, the problem employee first received verbal warnings, then written ones, and, when neither worked, she was fired. Not fun, but certainly effective. "It's a hard process, hiring people," admits Keller. "You need someone who's dependable--someone who will care for your business as much as you do."

Every entrepreneur who decides to hire employees will likely go through the same "Being a Boss" crash course Keller did, but she says that a little practice is all it takes to become an old pro.