Foundations of Operations Pt. 2 - HR Basics

Pt. 2 in my series on the Foundations of Starting a Small Business


It’s probably the most overlooked, most blown off, most avoided item I see when folks are starting a small business or nonprofit.

The reasons it gets ignored are pretty common. Founders wlll say “It’s just me. Why do I have to do HR?” or worse they will say “There’s only two or three of us now...we can take care of that later”.

So I’ll let some of you off the hook right now...if you have a sole proprietorship, you work from home, and you NEVER EVER plan on hiring even one employee, you can skip this article. But if you are planning on growing your business, read on.

I hate to break it to you, but if you want to save time and money down the road, you need to do some HR basics now.

The good news is that there is one document that can save you tons of headache down the road, and it covers a LOT of your basic HR needs.

Your Employee Handbook.

Your Employee Handbook can be super simple to start. You don’t have to put a ton of time and effort into it right away. But it’s critical to have one in place, even if you just have one staffer.

You can do some research and find a generic template that is applicable to your state online (make sure it’s state specific!).  Nice, customizable paid templates can be purchased for about $20 and can make sure you cover all your basic state and federal requirements. After that, it should only take you a day or so to review it and make some basic customizations for your particular organization.

Your goal with this document is to get ahead of any issues before they come up, and to be clear and honest about what you expect from your team.

Let’s be honest...a lot of times, we let this stuff slide because we’re working with friends. Or because we don’t want to come across as too strict or legalistic. Or because we just don’t see the need for “Rules” in our organization...people show up and do their job and things are just fine, right?

To alleviate that “bossy” feeling, I always suggest looking at the employee handbook as what it truly is: a communication tool. This is about getting expectations on paper so everyone has a common understanding. Don’t just assume you and your team are on the exact same page. You come from different backgrounds, so this stuff will look different to each of you

With that in mind there are the three things that I most often see issues with that you want to make sure are addressed in your employee handbook:

  1. Compensation - You might be able to skip an in depth compensation table now, but you DO want to address how people will be paid, when people will be paid, how people can go about getting paid more, if you have any sort of bonus structure, and any access to stock options that might be available to staff. Compensation also includes benefits and perks. If you offer any benefits or perks, write those down! You want your team to know about these offerings, and be clear about what the intention behind them is.

  2. Work time - When do you expect your team to be available? And how (email? Phone? slack?)? How are they tracking their time? These can turn into huge issues down the road, so take a few minutes now to outline them.  

  3. NDA’s and Intellectual Property Rights - this part sometimes feel especially uncomfortable. However, it’s vitally important. Make sure you outline who owns work product and what they can do with it. This is another issue that many people have many different views on, so it’s important that your entire time is on the same page from day one.

After you make sure these issues are addressed in a way that works for you and your organization, you can take some time and sit with your new employee handbook and see what works for you. The great thing is that now that you have it in place, you can change it down the road if you see items that just aren’t right for your organization. These rules are written in and your staff can work together to come up with policies and procedures that work for you and keep you all safe.