tech-company, employees, partners, internsI have a project that I’ve been working on off and on for about a year now. My plan is to turn this into a business when I’m done, but I simply don’t have the time that it requires, and have been thinking of adding on another person part time to help me. I have a few options and would like some advice as to which to take.
I have a good friend who is more than capable to handle what I need. I think if I asked him, he’d definitely be willing to help, and we could form a partnership. However I’ve had a lot of people about getting into business with a friend.
I live next to a university, and at any given time dozens of new graduates are looking for employment. I could easily hire one of them part-time, the problem becomes how to pay them. I haven’t made any money yet, as this has just been a pet project.
The last option would be to get an unpaid intern. Lots of students are looking for an internship position at the university, and it is required for them to graduate. The problem with this approach is that anyone good will get a paid internship, so I would get someone who isn’t qualified.
Any help with making this decision would be greatly appriciated, Thanks!
I speak from experience, and I have taken upon all three positions you have mentioned into my company.
Be careful who you partner with, it may mean them doing a fair amount of the work that you could have possibly done yourself, or it may mean that your business operations excel to a stage at which wouldn’t have been possible without them. Calculate this before making a decision.
Employees, if they’re not going to be taking too much capital out of the business, then definitely hire them. They work well if you correctly assess their skills and capabilities, so once again, calculate the risk and the benefits, and weight them accordingly.
Finally, interns. My favourite. I’m a university startup for the gaming industry, so landing interns was a major breeze for me. Not only do they get to work on something “cool”, they were getting work experience. These students are working for you for FREE, so be careful in how you handle it. People burn out quickly, especially if they feel devalued often. Nurture their growth and education, cater it to suit their schedules and skills, and make sure you keep the internship an enjoyable experience. I’m still a university student, and I know that students discuss companies where their experience was terrible (I would know, I was one of those students). One thing though, one of our interns contributed a significant amount of code to the project, and is being moved into a paid position as he has satisfactorily completed his internship.
To summarise though, calculate all decisions and weight the benefits with the risks. You don’t want to mess up bringing in someone, it’s a major pain and can cause many problems down the line.
I think it depends on how much you need from this person. If you have intentions of this person putting in as much work as you and stay with the project for the long haul, you should definitely make them a partner.
On the other hand, if you just need some tasks to be done that you don't have time for, you're better off hiring an employee. If you have a limited budget, you could target college students looking for part time work, or use a freelancing site. A freelancing site should also help you get through the legal requirements of hiring someone without having a registered company.
Don't hire an unpaid intern though. In addition to the lower quality of their work, it sounds like the type of intern you'd want is illegal in the United States. With the exception of Government and Non-profits, you must pay for work done. Unpaid internships are only allowed for training and education.
The Department of Labor sets some requirements for an unpaid internship.
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
The key one being #4. Unpaid interns should not provide any value to the company. In your case, where you want an intern to take on actual work, I think you clearly fail this test. And since you're deciding between an intern and an employee, you fail #5 as well.
That being said, I'm sure there are plenty of companies who break these rules to take advantage of people desperate to lengthen their resume, but I wouldn't recommend you go down this path.
In order to partner/hire someone, you need to have a company formed already which is actually not costly nor timely. It can save you many headaches down the road because it can protect your personal assets. The easiest is a LLC and will only cost more than a corp if you are in NY where you are required to run an ad announcing your business for 2 weeks (I think 1 or 2 other states require this too).
If its not too time consuming, you could hire a student to work on it while they are still in school during the year vs for course credit. You would need to be accredited with the school and that paperwork might cause you too many delays depending on the school.
A partner is the worst choice if you have to give up equity ownership or voting rights if you have done most of the idea creation and laid out the ground work. Perhaps you can even hire your friend for a small fee and pay him a % of revenue the site generates.
In the end, it’s always best to have a clearly written contract to prevent disputes down the road.
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