How to Make Smart Hiring Decisions for your Small Business

Here are three things to consider before you hire your next employee.

Most entrepreneurs have an optimistic mindset. That optimism tends to carry over into every facet of business — including your innate ability to see the best in people and identify potential.

But seasoned small business owners — those of us that have been at this for awhile — know how vitally important it is to keep a lookout for flaws, especially when it comes to recruiting new hires.

A company is only as good as the people working for it.

Poor hiring decisions can end up costing you time and money. I learned this lesson the hard way. In fact, one specific mistake comes to mind.

For example, I hired a salesperson who lacked sales skills (but they had potential). The end result was this: the new hire exhausted all of my company’s resources and ended up resenting me for their inability to earn higher compensation, because they did not meet performance goals.

Despite such a bad — and costly — experience, I learned a few lessons that every small business owner and can benefit from. Here are three things to consider in order to make smarter hiring decisions:

1. Don’t hire based on a candidates potential. 

In retrospect, I was very optimistic about a candidates potential but overlooked the fact that they didn’t posses all of the skills needed to fulfill my company’s needs. In other words, I took a chance.

Unfortunately, more often than not the potential did not manifest. I quickly learned the opportunity cost associated with “hiring on potential” — it meant that I would lose out on candidates that could have adequately met the requirements of the role and improved our bottom line, rather than absorbing it.

As a reformed people-pleaser, I now focus on hiring candidates that have a proven track record.


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