With three children aged six-years-old or younger and an unemployed husband who was studying to be a teacher, Natasha Hawker’s start-up timing was interesting, to say the least.
However, Sydney-based Hawker is convinced that there is a genuine market need for her new HR business Employee Matters, which she has just launched.
Hawker speaks to StartupSmart about how she has turned her frustrations as an employee into a start-up business.
Have you wanted to start-up for a while?
Yes, Mark and I had both always wanted to start-up. We’d dabbled in the last 10 years or so, but I didn’t really have the confidence for it.
I was waiting for a good business opportunity and I thought “I could so do this”. I realised I could do it and do it better.
I was working in HR and I had the contacts and I wanted to do something without having to get the approval of someone else all the time.
So we sold the car and Mark took a semester off to help build the business. We stuck the kids in front of way too much TV and somehow muddled our way through.
So, how does the business work, exactly?
It helps SMEs with HR support. There are other businesses that do this, but not with the hand holding element that we provide.
A lot of small businesses are scared by what the Fair Work Act means for them. Many don’t know what they can and can’t do.
They want someone to guide them through it and be an HR support, ranging from organising sexual harassment policies to managing HR during a phase of rapid growth.
Ultimately, you don’t need the cost of a full time or part time HR person when you can get help on the end of the phone.
Why does the market need this?
Well, we are looking for 10 to 20-year relationships with clients because we feel that this is very much needed by small businesses.
I’ve worked in the HR sector for seven years and I’ve seen how employers are struggling with the Fair Work Act.
They don’t know that the Act covers modern awards and many assume that if they pay over the award they will be covered. That’s not the case with flexible working and overtime penalty rates.
Many businesses struggle in the HR space but they can’t afford a full time HR person. Once they realise the ramifications of being investigated by the Fair Work Australia Ombudsman, they are happy to outsource this work.
What’s your pricing model?
We provide a do it yourself template with all the HR policies and tools you’d need for a $990 annual subscription fee.
We also have a day rate of $1,100 for help on HR issues, as well as a $650 half day rate. For $4,000 you can get us on a retainer for 30 hours a year.
If you have an HR manager that costs you $56,000 a year, there’s a clear cost saving there.
What has the business cost to start-up?
It has cost us $14,000, which has come from our savings. Because we run the business from home, or at our clients’, we’ve been able to keep the costs down.
Also, Mark is very good on the IT side, so we’ve been able to save on that, too.
What are the biggest challenges you face?
Setting up a business in general was tough, as I’d never done anything like that before. There was a lot of paperwork, but things like the government’s business plan template helped, as it made me think a little more broadly about the business.
The biggest challenge is cashflow. We will give it a few months and if the cash isn’t coming in, I may have to go back and work part-time in an HR role that isn’t at an SME. We have to pay the mortgage after all.
Mark and I work very well together; our skills are very complementary. He’s good at finance and IT, which allows me to get out there and do the face-to-face stuff.
The business is the last thing we think of at night and the first thing we talk about in the morning, so sometimes we have to say to each other “Let’s not talk about the business today”.
You have to set those boundaries. Communication is key to doing that.
What are your goals for the business?
If we have a lot of client work, we will scale the business by employing mums who want to work in HR part-time. They can screen references, write rejection letters and so on.
We want revenue of $450,000 in our first year. That’s our goal and I think we can do it.
I’ve thought about franchising the business, but haven’t decided yet. We will expand across the east coast first, and then nationally.