You can’t wear every hat well, though many entrepreneurs try. A recent survey conducted by The Alternative Board (TAB) found that small business owners work an average of 49.4 hours per week, dedicating a mere 32 percent of that time working “on” the business (i.e. strategic, high-value work) and the remainder spent working “in” the business (i.e. putting out fires, administrative tasks, etc.). No small business owner expects to work a nine-to-five day, but our time is a limited and valuable resource.
Knowing when to add staff to sow the seeds of scalability can be one of the toughest challenges a small business person faces. Too soon and you jeopardize profitability. Too late and you fail to meet client demand. While committing to a new employee’s salary and benefits feels daunting, so does burning time on billing or other mundane business tasks at the cost of more strategic work. We need to generate revenue to stay afloat. And investing time in process improvements early on reduces the volume of daily crises that arise later, yielding more productive days and cost-effective operations. But how to focus on anything that’s not mission critical when you don’t even have time for lunch? The answer may lie in offloading some of your work, but first ensure that your business is poised to handle the extra stress.
Perform a Revenue Check
Your revenue is the most telling metric to help you assess whether you’re ready to start hiring. It must be consistent and reliable to avert impending disaster. Hiring forces entrepreneurs to spend time properly structuring their organizations, devising necessary job descriptions and documenting current processes. This temporary diversion of time away from revenue-generating tasks may result in a short-term slowdown in sales. Your business must be steady enough to weather this setback, and stable enough to bear higher costs.
Listen to Customers
Are you passing on new projects or customers that, given more resources, you might otherwise tackle? Or, conversely, are you fielding customer complaints due to your inability to deliver quality work in a timely manner? Both may be signs that it’s time to invest more in your business. First, try implementing improved tools, technologies or processes that allow you to accomplish more with less. But if painful gaps persist, consider rounding out your business with new people who bring extra capacity and stronger competencies to the areas where you and your business fall short.
Assess New Market Opportunities
If you’ve identified new applications for your products or services that you don’t have the bandwidth to address, this is another nudge to increase bandwidth. Don’t miss out on clear growth opportunities just because you can’t handle the added workload. If you have the financial resources to expand or tweak an existing offering to capture a new customer base, and the opportunity is sizable and realistically attainable, it’s likely the right time to add resources.
Outsource Where Possible
Wherever possible, outsource. As a small business owner, you can’t afford to hire senior executives to help run your business and the true cost of hiring inexperienced employees rears its head in the time you invest in training. The gig economy has resulted in an unprecedented number of freelancers offering on-demand, expert services to companies like yours. What to outsource varies by company, but generally anything that lies outside of your business’s core competencies should be considered. Usual suspects include accounting, web design, manufacturing, marketing and corporate communications, but even virtual administrative assistants are available. Assess the areas where you’re dedicating the most time, yielding the least value, and facing the biggest learning curves. Those are your sweet spots for outsourcing.
If you do hire in-house, consider hiring someone with a small business background who’s accustomed to working in a fluid environment where roles are less rigidly defined and everyone pitches in to get the job done. The best new hires will be able to complete repeatable tasks with well-documented procedures that contribute to business growth. And never hire someone out of desperation. Always wait for the right candidate to reap the rewards (not the ramifications) of adding staff.