One of the hardest things to decide is when to employ new people, it’s always better to be slightly resource-constrained but you will only really grow if you have the capacity to do so.
If your accounts can tell you which income streams are making you money you should be better able to see where to put new people but when is the right time?
Firstly you have to acknowledge and be comfortable with the idea that things can change overnight, sometimes drastically. It’s always possible that a client will ring up and want you to start work on Monday, or a major client will pull the plug on a big project overnight. You need to have contingency plans in place to deal with these events.
Some things that can help are good relationships with contractors, ex-employees, and competitors that can help you fill some emergency capacity in a squeeze. Taking the time to find a new employee, and train them, usually takes too long. When the heat turns up you want people that can hit the ground running.
Or, if work dries up and you have a hole to fill, you can reach out to existing clients and discuss potential special projects. Client depth sales are always the fastest and most efficient. You can’t live on it long term but it often fills holes really well.
You can ask staff if they want to take some well-earned leave, perhaps even become a contractor. Worst case, and let’s hope this never happens, put people off.
The most important thing is to take action and not let circumstances overwhelm you. If you run from the monster it gets bigger, if you run towards it, the monster disappears.
Making big choices that impact the continuing livelihood of your business and its people is a heavy responsibility, it’s the reason that a lot of employees gladly give up so much of their potential hourly rate. They want to sleep at night and have a life, a life not worrying about this stuff. You, on the other hand, are the one that has to bring in the work. A lot of us don’t like selling but picking up the phone is the fastest way to solve a lack of work for your staff. Knowing you’re responsible is sometimes the incentive you need to make that happen.
You can best manage demand and resources using weekly operations reports. I know, I know, I say this is the solution a lot of the time but, it usually is. That and sales pipeline reporting and good monthly management reports.
Recurring revenue is the ultimate solution to this problem. When your recurring revenue is greater than your recurring costs you can sleep easy at night.
If you are a small but growing business and you worry that an expensive new employee will be a big risk, take small steps, know your numbers, and employ the most junior roles first. I think that training a junior and being responsible for finding them work is one of the most rewarding things managers can do – if they’re worth their salt.
Don’t be afraid to use Upwork. It’s great to support local people (if you can find them right now), but it’s also great to support good people wherever they are.
Photo by Clem Onojeghuo on Unsplash