Small businesses typically startup with the business owner being the only staff of the company. So they end up wearing all the hats and doing everything from Sales, to Production, to Admin, Finance, and even janitorial duties in some cases!
The startup business owner will endure this for a while because they do not yet have steady work coming in so they really can’t afford to take on staff yet. If everything goes well, and they run their business well, they will attract more and more clients and there comes a point where they have to consider taking on staff so that they can start relieving themselves from wearing all the hats!
But the question is when is that time and how do you know? Well, here are some symptoms for you to look for:
- You are doing everything in the business
This is a sign that you are handling too many tasks and some of them should be passed off. As your time becomes more scarce, you have to learn how to select only the high value tasks to do. Things like admin or janitorial duties should definitely not be done by the business owner because those duties, you can typically hire out for a low hourly costs. In the beginning, it may seem hard because when you don’t have any sales, any expense seems to be risky. But many business owners will forget that they shouldn’t be doing these low level tasks even when they start to book steady sales. - When you are working 12-15 hr days
When you are working this many hours, it’s a sign that you need to hire people so that you can free up some of your time. Also, doing 12-15 hrs a day for a short term because you’re in a bind is ok, but it should not become a normal thing. Otherwise, this will very quickly lead to burn-out and break-down in your mental wellness. - When your production can’t keep up with the Sales demand
If your production output is not meeting your desired delivery times, then it means you need to bring in more resources. For instance, if you are striving to deliver your product in 1 week, but it’s taking more like 2 weeks to deliver, then you will likely need to hire more production staff.
So those are some symptoms which will hint to you needing to hire additional help. The most traditional way of hiring extra help is to pay a set monthly salary for an employee, but if you don’t yet have enough work for a full time employee, then it may not be the right structure for you. In this case, you may want to look at hiring hourly employees where it’s not a set monthly salary. You could also consider a contractor who works hourly or by the job or even virtual employees who work remote. These types of work arrangements typically end up costing more by the hour but it allows you to get help without having to commit to a full time salary which ends up being a larger cash outlay as a total monthly amount.
As a prudent business owner, it’s best to look at your financial data and see if you can afford to hire additional help and you can do this by doing a financial projection of both your anticipated Sales Revenue and your Expenses. If you have these 2 sets of numbers, it can tell you how much profit you are expected to make and that will give you an idea if you can afford to hire the additional staff or not.
As a business owner, it’s important to always be looking at your financial numbers. This is how you can assess if you are profitable or not. I know many owners do not like to do this and subconsciously resists looking at the numbers because they would rather stay in a constant state of denial. For those who can relate to this, just know that refusing to look at the numbers, does not make the problem go away. It’s like that saying, if a tree falls in the forest, does anybody hear? Well, for businesses, if your business is already failing, regardless if you look at the numbers or not, it’s still going to fail. So as a prudent business owner, it’s better to look at the number earlier so that you have more time to save the business if it indeed is not going in a favorable direction.
I hope this blog has helped you understand when is a good time to hire. Also, I hope it’s motivated you to look at the your business numbers more often. Perhaps it may have even been a wake up call. If all that I’ve said is over your head, but you see the importance of looking at your financials, then reach out to me and let’s see how I can help.
