Ep. 67 The People Advantage: HR Basics For Online Business w/ Kira LaForgia

Mar 26

[This is a Six Figure Brand Society vault training from HR expert Kira LaForgia]

When you started your own business, you probably assumed you were done dealing with HR forever.

No more awkward performance reviews. No more employee handbooks. No more sitting across from someone in a sterile conference room while they explain your benefits package. You were the boss now, and all of that felt like someone else's problem.

But here is the thing: the moment you bring anyone into your business, whether that is a contractor, a VA, or a full-time employee, HR becomes your problem too. And most online business owners do not find that out until they are already in trouble.

Kira LaForgia is the founder of Paradigm Consulting and an HR expert who actually enjoys the stuff the rest of us avoid. 1099s, W-2s, contractor classification, compliance law, all of it. She built Paradigm to bridge the gap between corporate HR policies and the real-world needs of small online businesses. This post covers the training she gave live inside the Six Figure Brand Society, and it is packed.

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Ep. 67 The People Advantage: HR Basics For Online Business w/ Kira LaForgia

What HR Actually Does

If your mental image of HR is the person you go to when you get hired, when you are in trouble, or when you get fired, Kira would like to expand that picture considerably.

In a traditional corporate environment, HR is responsible for an enormous range of functions: strategic growth, recruiting, compliance, training and development, culture, performance management, and much more. Each of those areas typically has its own team of specialists. In small business, you do not have that. What you have is one consultant who helps you navigate how all of those things interconnect in your specific business.

And critically, HR is not something that only matters once you have employees. The foundational work of making sure your people are classified correctly, that your agreements are set up properly, and that you understand your compliance obligations applies whether you have one contractor or twenty.

One of Kira's key points is that HR is not just a compliance function. It is a business strategy tool. Your hiring decisions directly affect what offers you can deliver. Your team structure directly affects how you scale. Your people, and that includes you as the founder, are the most valuable asset in your business. HR is what protects and optimizes that asset.

As Richard Branson put it: "All too often a company's HR department is seen as the enforcer of rules and policies. But in reality, HR is the heart of the company, ensuring that the organization's most valuable asset, its people, are well supported and positioned to succeed."

The Part Nobody Wants to Talk About: Contractor vs. Employee Classification

This is the section that makes most small business owners uncomfortable, and it is also the most important one.

In March 2024, a federal law change updated the standards for how workers are classified as employees versus independent contractors. This change caught a lot of creative agencies off guard because the industry had developed some pretty ingrained assumptions about what it looks like to work with freelancers and contractors. Those assumptions are now, in many cases, legally problematic.

There are six factors used to determine whether someone is correctly classified as a contractor or should actually be classified as an employee. Kira is not going to run through all six in a short training, but here is the core of it: if someone is doing the same tasks every month, attending standing meetings, operating primarily or exclusively within your business model, and would significantly hurt your business if they left, there is a reasonable chance they are functioning more like an employee than a contractor, regardless of what your agreement says.

Why does this matter? Because misclassification is the number one HR risk for small businesses, and the fines are much bigger than most people expect.

Kira shared two real examples from her client work. The first was a business owner who had hired teachers to help build courses in 2020 and had been paying them royalties ever since. She received a $5,000 fine, which was actually on the lower end because she had legal support to help fight it down from a potential penalty of 30% of every payment made over five years. The second was a company that had used day-of service providers for ten years. One person applied for unemployment after being let go, which triggered an audit of all 1099 expenses. Their fine came out to $160,000.

The good news is that this is one of the most preventable risks in your business. Getting classification right does not have to be complicated. And if you are already in a situation where someone should probably be classified differently, there is a path forward that does not have to be terrifying.

How to Think About Risk Before You Are Ready to Hire

A common pattern Kira sees is business owners waiting until something goes wrong before reaching out for HR support. She would really prefer to reverse that.

If you currently have contractors in your business and you are not sure whether they are classified correctly, the first step is just to think through where your highest risk point is. Who would your business really struggle without? Who is most integrated into your processes and your client work? Those are the people worth looking at more closely.

From there, Kira's advice is to skip past the anxiety and start dreaming about what that role could look like as an actual employee. What would the job description be? How would your offers change if you had someone in that role in a more formalized capacity? What could you charge or deliver that you cannot right now? That reframe, from "I might be in trouble" to "what becomes possible," is where the real strategic work happens.

One thing Kira is clear about: she is not here to convince anyone to build a team. Having employees changes your job as a founder significantly. You go from being the person who does the work to being a leader of other people, and that is a real shift that you need to be genuinely excited about. She wants her clients to want this, not to feel forced into it.

The Other Compliance Stuff, and Why It Is Less Scary Than It Sounds

Beyond misclassification, there are federal and state compliance requirements that apply to any employer, regardless of how many people they have on their team. Things like workers' compensation, sexual harassment training, and other labor law requirements.

The fines associated with federal compliance issues tend to be significantly smaller than misclassification fines. Kira has seen these come in around $2,000 on average for her clients who came to her already dealing with a penalty. Still not fun, but much more manageable.

State compliance is more variable, and the states that enforce these issues most aggressively are not clustered in one political direction. New York, California, Colorado, Oregon, Washington, Texas, Florida, they all show up regularly. If you have a remote team and you are hiring across state lines, you are potentially navigating compliance requirements in multiple states at once, which is one of the key reasons HR is different from just talking to your accountant or your attorney.

The thing about compliance fines is that you do not get a warning. There is no "hey, we noticed you might be doing this wrong, you should fix it." You get a bill. And by the time you get the bill, the audit is already done.

HR as a Business Strategy Tool, Not Just a Risk Management Tool

Here is the part of this conversation that I think gets overlooked: HR is not just about protecting yourself from fines. Done well, it is one of the most powerful levers for growing your business sustainably.

Kira's clients consistently report being able to charge more for their services after working with Paradigm. They have less team turnover. They spend less time on people-related fires. And they are able to consolidate their teams down to a smaller number of really high-value people, which is what actually makes a business scalable.

The connection between your team structure and your offers is real and direct. If you are a solopreneur, your offers look one way. If you have a legally compliant team, your offers can look entirely different. What you can promise to clients, how quickly you can deliver, what you can take on, all of that is shaped by the people behind your business.

And as a founder, you are also people. How do you want your business to treat you? Kira is genuinely thoughtful about this, and it comes through in how she works with clients. If you are consistently the first person to stop paying yourself when things get tight, that is actually part of what HR strategy addresses.

What Paradigm Does and Who It Is For

Paradigm's signature service is a 90-day engagement called the Paradigm Solution. Starting at $6,000 with payment plans available, it builds out all the core HR functions for your business: classification, compliance, recruiting framework, culture, handbook, and more. After that, clients can move into an optional retainer depending on what ongoing support they need.

Their membership, at $500 per month, gives clients a community and private access to the team for questions that come up in the day-to-day of running a business with people in it.

But Kira is genuinely not trying to oversell anyone on starting before they are ready. Her honest advice for someone who is hiring their very first employee is to just do it and use the money they would have spent on her services to hire that second person. The Paradigm Solution is built for business owners who are around the point of needing two or more employees and are about to move into either a maintenance phase or a growth phase.

If you are earlier than that, she has resources for you. More on that in a moment.

Where to Start If You Are Not Ready to Hire Anyone Yet

Kira has two free resources designed to help you figure out where you actually stand.

The first is an employee-contractor classification guide that walks you through the six-factor test for determining how your people should be classified. If you have anyone in your business right now on a 1099 and you have any uncertainty about whether that is correct, this is the place to start.

The second is an HR self-assessment for small businesses, which is essentially a Google Doc checklist version of the audit Paradigm used to offer as a paid service. It covers all the major areas of HR compliance and function and will show you pretty quickly where your gaps are. Fair warning: it is a long list and Kira has put a Loom video at the beginning specifically to tell you not to panic, because the point is not that you should already have all of it. Everyone starts at zero.

If you have five employees and you can only check off ten things on that list, you probably need HR support now. If you are a solopreneur thinking about adding someone to your team in the next year, it is a really useful way to understand the full scope of what you would be taking on.

Both resources are available through Paradigm's website, and Kira also offers free consultations. She is clear that these are not sales calls designed to pressure you into anything. If your risk level is low and you are not ready, she will tell you that. If you are in a situation that needs urgent attention, she will tell you that too.

Why Most Small Business People Problems Are Actually HR Problems

Most of us come into entrepreneurship with zero training in how to lead other people. There is no class for it. If you came from a corporate background, maybe you watched how it was done, but probably from the bottom of the org chart. If you went straight into business, you are figuring it out completely from scratch.

The uncomfortable truth is that most of the people problems that feel interpersonal or specific to your situation, the contractor who ghosted you, the difficult conversation you have been avoiding, the team member who is not performing and you have no idea what to do about it, are actually HR problems. Problems that have real frameworks and real solutions, if you know where to look.

What Kira is building with Paradigm is the version of HR that actually fits how small creative businesses work. Not the corporate enforcer model. Not the hiring-and-firing department. But a strategic, people-first approach to building a business that can grow, experiment, and scale without constantly putting out fires.

If you have been thinking about building a team, or you already have one and you have a nagging feeling that you are not set up quite right, this is worth paying attention to before you get a bill in the mail that makes it a lot harder to ignore.