What to Consider When Hiring Your First Food Truck Employee
Are you turning down work because you simply don’t have enough time or hands on-board your food truck to take it on? Thinking of hiring your first employee? Congratulations – your mobile food business headed in the right direction.
But before you advertise for a new employee for your food truck, proceed with caution. Hiring staff is a commitment to the future, and should be made with your long-term growth plan and whether you really want to be an employer in mind.
Here are some points to consider, plus some tips for determining whether you can afford to hire your first food truck employee.
Future vision for your food truck business?
When faced with too much work, food truck owners are often encouraged to hire up, but is that what you want for your business? Is it your goal to become a larger business or remain a sole proprietor?
Temporary workers might be a short term option, but be aware: many laws and regulations that apply to full-time employees also apply to seasonal or part-time food truck employees.
?Where do you need help?
If you’ve decided to bring an employee on board, your first step is to project your mobile food business workload and identify areas where you need help. What does your workload pipeline look like for the next 30 days, 90 days and six months, and which areas of work do you need help with? What are you doing now that you could offload or have an employee do? Perhaps you need a line cook, or a service window staff member or service staff for your upcoming catering jobs. Or, maybe you simply want to free up your time to concentrate on other parts of your business.
Can you manage people?
Don’t overlook this important consideration. If you’ve managed employees in another occupation, how successful were you at making good hiring decisions? How many bad ones have you made?
Can You Afford It?
Working out whether you can afford to hire is a common stumbling block. Start by building a realistic picture of the costs and overheads that your food truck business will incur if you hire an employee.
These costs should include:
- Unemployment Tax – State unemployment taxes vary by state, so check with yours. Federal unemployment tax is 0.8 percent on each employee’s first $7,000 of earnings.
- Workers Compensation Insurance – For new employers, this figure depends on your industry and the job performed. Again, check with your state about your expected rate.
- Medicare and Social Security Taxes – Currently, Social Security tax is 6.2 percent on wages up to $113,700, and Medicare tax is another 1.45 percent.
- Recruitment and Training Costs – These can run into the thousands, but, you can reduce them by using networking and referrals to uncover candidates.
- Benefits – Optional.
- Payroll Costs – It takes time and money to administer payroll and calculate taxes and withholding. Examine the cost of payroll software that can help streamline this task.
- New Equipment – Computer, desk, other tools.
- Insurance for Company Vehicles
Next, look at last year’s income (if there was a last year) and expenses and factor in the projected annual cost of an employee and the extra income one might make possible. Then, consider your upcoming work and cash flow. Can you afford to live with reduced profitability for a few months as your mobile food business ramps up? Calculate what you can put into generating new business if your time is freed up.