As your business grows, it’s likely you’ll need to recruit staff to help. Hiring staff too soon can be a financial strain but hiring too late can mean your business fails to reach its potential. Read our guide on how to know when your business is ready to hire staff.
Being a one-man band has lots of benefits when first starting out in your new business. You can test the waters, keep costs low and work your own hours without the worry of managing others. But to allow your business to grow, there comes a point when you need an extra pair of hands to help with the workload. Recognising this sweet point is the tricky part. Here’s our guide to help you decide if it’s time to take on your first employee.
Your business is turning down work
Struggling to keep up with a demanding workload or turning away work on a regular basis is a sign you need to recruit staff. Expanding your workforce means your capacity for work is expanded, allowing you to take on more projects. But before you hire staff, it’s important to ensure that there will be sufficient work for the employee and enough revenue generated to pay them, otherwise you could be out of pocket.
You’re receiving complaints
If customers or clients are complaining about the quality of your work or the time it takes to complete, it may be time to hire staff to help you. If you’re stretched too thin to complete work to a high standard, additional help is vital. Disgruntled customers are bad for business – they won’t recommend you to friends and family and may even write bad reviews online that can damage your reputation.
You struggle to complete day-to-day tasks
Hiring someone to do the day-to-day tasks, such as answering the phones, emails, accounting, can be a wise business decision if it frees your time up to focus on the clients or expanding your business with new initiatives. If you’re struggling to find time to manage the admin of your business, such as invoices and paperwork, hiring support staff can increase your productivity and revenue.
You need expert skills
You may need specific expertise to help you expand your business, such as marketing, web site design and accounting. If so, consider whether this is required on a regularly – which would indicate it’s best to hire someone for this role – or whether it can be done on an ad hoc basis. If this is the case, consider outsourcing the work to a third party for a one-off payment.
Your vision for the business needs employees
Decide whether you want to grow your business or keep it small? If your business is a part-time venture or you prefer to work alone, or work when and how you want, you may choose not to hire staff. However, if you’re aim is to run a highly successful business, you will need to hire staff to help you achieve this vision. And, if you plan in eventually selling your company, potential buyers will want hired staff rather than having to do it themselves.
You have the money
While hiring staff is a great investment if it allows you to take on more work and therefore generate more income, you should only hire staff when your business finances allow for extra expenditure. Check your budget and business forecasts carefully. Not only is recruitment and training costly, you’ll need to have cash reserves to pay monthly earnings and overheads until your new staff begin generating enough revenue to cover their costs.