So, how do you find a new employee, anyway? Your choices are many and include supplier or customer referrals, newspaper ads, private and public employment agencies, recruiting or placement agencies at schools, and recommendations by colleagues or even competitors. The best method for your recruiting will depend on the nature of your shop, the job to be filled and the type of candidate you seek.

One swift search path is to go directly to colleagues, competitors, customers or suppliers. Just put out the word that you are hiring. A big advantage here is that someone proposing a candidate will have at least a few words about qualifications or credentials. Unlike having to check references of an applicant after the fact (which too many shops often fail to do), the reference or referral comes ahead of the candidate.

Most of the time, a position in a small shop goes to someone who knows someone. This could be the friend of a customer, a former employee of a colleague or a friendly competitor (not so friendly, perhaps, if you are raiding its staff) or a recommendation by a supplier who knows your operation and your needs. Selecting someone who knows someone saves you the time and money of a formal search through advertising, employment agencies or schools. Besides, a personal recommendation usually comes with the candidate.

There are, however, a few downsides to using this method. For one, you risk alienating a customer, fr...