WE may still be operating in an incredibly tough economic environment but there are still plenty of small start-up companies out there who are continuing to grow and prosper.

Starting a new company can be a daunting prospect but one of the most important stages in any business comes at the point when it is time to start recruiting employees. Hiring staff is a huge milestone in the journey of any young business and one of the most crucial decisions you will have to make.

Get the process right and the influx of new blood will help take the business on to the next stage – get the decision wrong and the results can be disastrous for a small operation built around a handful of people.

I can still remember when I started out running a business from my broom-sized office in Pall Mall. I never thought I would actually reach the point where I would hire more than one employee. I now run more than 30 companies and employ hundreds of people.

Right from the early days I always set myself targets. You might not always reach them but they are still vital because they allow you to watch your company grow right in front of you. Taking on new members of staff should be part of the target setting process.

The first thing you need to do is to ask yourself exactly what role you are looking to fill. If you do not have a job specification then take some time out to write up a detailed description.

Some of the questions you need to be asking are: what value will the new person bring to my company, and more importantly, is the appointment crucial to the continued success of the business?

Often there are instances of firms hiring when they do not have a proper idea of the role they are looking to create. Once you have a proper idea of the post then you can get a real grasp of the qualities you are looking for in prospective candidates.

These days there are plenty of ways to look for candidates, including recruitment agencies and through business contacts. And of course social media is becoming more and more important as a recruitment tool thanks to sites such as LinkedIn.

Finally, it is easy to forget the cost of employment, not just in terms of salaries and benefits, but also in terms of providing suitable equipment such as cars, computers and phones.

It is not uncommon for small firms to struggle when it comes to hiring but owners should not be put off by the potential problems and pitfalls.

Get the process right and new employees can have a really positive impact on the business. If you want to take your company to the next stage in its development then you really have no choice but to take on employees.

Source: James Caan