This guest blog post was written by Ashley Cox of sproutHR.
Starting your own business is no cakewalk – we all know that. But managing the daily operations of a growing business by yourself? Well, that’s a cake of a different flavor!
One thing I’ve found many entrepreneurs struggle with, is trying to decide when it’s the right time to hire their first team member and grow their team. Since this is such a huge commitment, it’s one you shouldn’t take lightly. But it can also pretty darn overwhelming.
Today, I’m sharing 5 Simple Steps to Know When to Grow Your Team!
Click here for your free Guide to Growing Your Team!
1 – Understanding Your Business Trends + Projections
It’s so important to understand your business trends and projections. Before you can decide if you’re ready to hire a team member, you must first know whether your business is growing, declining, or remaining stable. If your business is growing, and even if it’s stable, you should consider the positive impacts of hiring a team. However, if your business is declining, you don’t want to add the financial responsibilities of a team until you can get your business growing in a positive direction.
2 – Identifying Your Current + Ideal Workloads
Do you find yourself working more hours than you ever did working for someone else. We’ve all seen the meme floating around the interwebs by Lori Greiner that says, “Entrepreneurs are willing to work 80 hours a week to avoid working 40 hours a week!” It may be like that in the beginning, but it shouldn’t be like that forever. One way to see if you’re ready to bring on team is to take a look at your workload. Where are you spending the majority of your time? Are the tasks you’re doing driving your business forward, or just (barely) keeping it running? Knowing where you’re spending your time, and where you need to be spending your time, will be helpful for figuring out if you’re ready to hire your first team member!
3 – Knowing Your Financial Situation + Commitments
Knowing your cash flow intimately is a huge factor in determining whether or not you’re ready to hire a team. You need to know what money is flowing into and out of your business. And if you don’t, I encourage you to educate yourself on this right now!
It’s critical to know your financial health, so you can determine how much you can budget for a team. Hiring independent contractors is a great way to get the help you need, without a lot of the other expenses that come along with hiring true employees for your team. If you need to hire someone for your team, here are some of additional expenses you can expect: income tax withholdings, social security and medicare taxes, unemployment insurance, and more. (Note: You should speak with an Accountant or CPA to review the specific financial requirements of hiring an employee in your state.)
One of the biggest commitments of hiring a team, though, is the fact that you’re now responsible for their financial lives. I don’t say this to scare you. I say this because if you’re not in a solid financial place and you hire a team, then you may be faced with some really tough decisions down the road. If you can’t financially support your team, laying off team members may become your reality because of poor money management. If you’re looking to start hiring a team, get familiar with your books and the financial duties of hiring that team. Don’t be afraid to reach out to a financial planner, accountant, or CPA who can help you make smart money decisions!
4 – Preparing for Leadership
To hire a team means you become the person ultimately in charge. As the CEO and leader of your organization, you’re responsible for setting the tone, crafting the mission, vision, and values, developing and sharing your long-term planning and strategy, establishing goals, setting and communicating clear expectations, and holding yourself and others accountable to achieving them. It’s a completely different world to manage yourself versus managing others. You’re not able to change plans mid-stream as quickly as you once were, without at least notifying your team and communicating your reasons for the change. And yes, we should be sharing our why’s behind our decisions with our team members, because it helps create a strong team with a greater sense of ownership and commitment. A leader must also inspire their team to follow them and to treat their business as well as they do. Leadership take time, practice, and continuing education. But you can become a great leader with a little time, heart and commitment!
5 – Considering the Cost of Not Hiring
Something a lot of people don’t consider is figuring out what it will cost your business if you don’t hire a team. This may seem a little counterintuitive, but hang with me for just a minute. Not hiring a team can essentially cost you and your growing business money. At some point, if you’re planning on growing your business, you won’t be able to maintain everything by yourself. Which means, something’s gotta give and it may be the one that makes a huge impact in your business. As things fall to the wayside, your growth becomes stunted.
Carefully consider how outsourcing could help your business grow. Think about how much more time you could devote to doing the things which generate true income for your business. Then, outsource the other important tasks that support your business. Just remember that outsourcing looks different for each of us. One person may wish to outsource their social media management, while another needs help with course creation. Think about what’s best for your business, and avoid listening to what everyone else thinks you need. Otherwise, you may end up hiring someone who doesn’t fit the needs of your business, even though they’re awesome at what they do!
Hiring a team is a BIG decision. But, if you take the time to consider your options and prepare for bringing on a team, you’ll be able to make smarter decisions before you reach the point of burnout and hire the first person that walks by! Planning ahead and being proactive will help you determine the direction of your business, what kind of team you need in order to reach your goals, what your financial responsibilities will be, and allow you to begin making the mindset shift to effectively lead your new team.
Ashley Cox is The HR Partner for Creatives at sproutHR, where she helps creative entrepreneurs hire, train, and lead their thriving teams, all with confidence and heart. She loves helping her clients make the scary and overwhelming parts of hiring a team feel simple and easy to do. She meets you where are you in your business and helps you gain clarity and define next steps, so you can start taking action right away on your big goals. And she does it all while making you feel like you’re chatting with your biz bestie!