Home Invasion

Setting Boundaries

The conditions of employment--including compensation, benefits and sick leave--should be outlined up front, and employers should also discuss their expectations with employees. "During the first day of work, go over the job description, discuss your expectations for their performance, and ask if they have any questions," says Wendover. "In a homebased business, employers should also let employees know which areas [of the house] are open to them and which areas are off-limits. You cannot be afraid to broach these topics."

Morton always discusses the ground rules with his employees on their first day of work. In addition to insisting they arrive on time and do their best work, Morton does not allow personal phone calls or personal use of the computers and insists that cell phones be turned off during business hours. "We make it clear up front that we live here, but it is also a business and needs to be treated like one," he says.

Wendover also encourages homebased business owners to take their management duties seriously. "You need to be a good businessperson," he says. "If [employees are] not performing up to par, you need to correct their behavior; you need to terminate them if they are not working out. Employers need to remember they are managers, not friends."

Cohen-Fyffe created an employee handbook to ensure her employees understood what was expected of them. In addition to specifying which areas of the house employees can access, the handbook also addresses office codes of conduct and policies for holidays, sick leave and personal phone calls. "It makes everyone aware of the rules and ensures every employee is treated the same way," Cohen-Fyffe says.

Indeed, sharing your home with employees can be a challenge, as Morton quickly discovered. "It becomes really hard to separate work from home," he says. "The employer-employee relationship is really skewed when you work from home because they see so much of your personal life."

Cohen-Fyffe says that she never planned to share her home with employees. "Initially, I thought this was a business I would run on the side to bring in a bit of extra money, but it quickly took on a life of its own and I had to hire help," she says. "It took me a while to adjust to having employees in my home."

Both Morton and Cohen-Fyffe have employees working throughout their homes. In his three-bedroom home, Morton uses two bedrooms and the living room as office space; the dining room as a conference room; and the garage as a shipping dock. Cohen-Fyffe has offices in three different rooms at the back of her house and uses her kitchen as the employee cafeteria.

Reaping the Rewards

With the right attitude and a little planning, employees can help transform your homebased business into a thriving enterprise. The employees who work at Babe Ease not only manage day-to-day tasks like answering phones, filling orders, managing accounts and shipping, but they also contribute to the company's bottom line. "Initially, I was struggling just to fill orders, but now that I have employees, it frees up time for me to focus on growing the business," Cohen-Fyffe says.

Morton attributes much of the success of his business to his employees. "Our employees have made a huge difference in the bottom line of our business; we have been able to grow at a rate that is mind-boggling because we have great people to help us out," says Morton, who earned $1.1 million in sales in 2004 and expects to triple that number in 2005. "When you have good employees, they generate more than enough revenue to cover the cost of their employment."

The Game Plan

Before hiring an employee to work in your homebased business, be sure you've done the necessary research and planning to make the transition a success.

  • Get a copy of state employment laws through the State Department of Labor.
  • Check the zoning laws for your neighborhood.
  • Verify that the employee is legally allowed to work in the United States.
  • Perform background and credit checks, drug tests and reference checks.
  • Research and establish payroll and benefits services.
  • Update your insurance policy and purchase workers' compensation insurance.
  • Establish boundaries for working in your home.

Get Off on the Right Foot

If you're a homebased business owner thinking about hiring employees, these helpful resources are worth a look.

  • For information on state labor laws, visit HR.BLR.com or HREsquire.
  • Find in-depth information on all aspects of hiring employees at G.Neil.
  • To establish status as an employer, set up employee withholding tax and manage the financial aspects of hiring an employee, visit the IRS online.
  • Check out the International Association of Home Business Entrepreneurs for even more tips and resources.
  • Brush up on the laws affecting you by reading The Employer's Legal Handbook by Fred S. Steingold.

Jodi Helmer is a freelance writer living in Portland, Oregon. Visit her online at www.jodihelmer.com.

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Jodi Helmer is a freelance writer living in Portland, Oregon. Visit her online at www.jodihelmer.com.

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