Most start-ups start on the ‘smell of an oily rag’. Businesses are built on blood, sweat tears and hours and hours of unpaid labour or on Mum or Dad helping you out because they love and believe in you.
So how do you know when you are a ‘real’ business and it is time to bring on your first employee? You wonder whether you should continue flying solo, but you know there are ramifications if you do, mostly around the ability to grow past a certain point.
So to know whether now is the time to build a team, it’s important to look at and reflect on your business. Can you afford an employee, and what are the alternatives, if you can’t?
Follow these 5 simple steps to find out if your business is ready to start hiring:
1. Start by forecasting your revenue targets for the next 12 months. If you already have a business plan, this will be as simple as looking at your existing targets.
2. Grab a piece of paper and write down everything that you currently do over a week (yes, everything), and allocate a time to it. How long does it usually take you to complete a particular task?
3. Group similar tasks into categories such as social media, finance, technology and business development.
4. What are you good at? What are your strengths and what do you need to focus on to grow your business? What could someone do better or quicker than you? Put a red circle around these particular tasks – did you halve the list? If not, try again.
5. With the list of tasks that you are comfortable to give away, think about the people around you who may be able to help. If you start with volunteers, even friends and family, remember not to take advantage of them. Starting with a couple of volunteers might help confirm or test whether your business is at a point where you can sustain employees.
Once you have decided which tasks that you can reassign to someone else, think about how many hours this will free up for you. You can then look to spend this time on work activities that will bring more revenue into the business. It is important to forecast the amount of revenue you can generate now you have additional time. If you can cover the salary of an employee with this expected revenue, then it is definitely time to hire.