Every Entrepreneur finds it thrilling to see a new business opportunity and make the most of it. There is no better feeling than building a business from scratch and turning it into a thriving organisation, which employs lots of people.
There are lots of entrepreneurs who are starting their first business and are at the stage where they need to go from being a one-man band to a small startup with employees.
It’s a scary and exciting time. But how can you be certain your business is ready to sustain the change?
There are many important decisions SME owners have to take in the early stages of their business, and one of the most important is making that first hire. Depending on the individual company, this could be done immediately, within a few months, or even a year after starting up. There is no singular approach to it, but it’s important that it is the right decision taken at the right time.
Employing staff can be daunting for the smallest companies, however, when you find yourself struggling to reach the expectations of your customers – when you’re so in demand that you drop the ball and don’t have the capacity to take on any new clients – that’s a good indication you are ready to hire. Hiring is the only way to boost your revenues, other than putting your prices up.
While hiring the key question to ask yourself is whether you can justify making a new hire, in terms of cost and workload. Employees are the biggest assets of any business but also inevitably bring cost. Most likely, you will soon see that the benefits outweigh the costs.
Strike The Right Balance!
Firstly think about whether you’ve generated enough cash to cover their monthly salary. This critical monthly expenditure is unavoidable so you cannot make the mistake of employing somebody and offering them a salary before you know you can 100% deliver.
Secondly, make sure you have the demand and enough existing enquiries to warrant an additional overhead – that’s the only way you’ll counteract the extra expenditure.
If you’re thinking of hiring somebody because you’re a little stressed but don’t actually have enough work to keep them busy and able to add value, then don’t hire. As an entrepreneur, you need to get used to feeling stressed – that part comes with the job.
Once you have evaluated the above option, spend time thinking about what your new member of staff will do on a weekly basis. You need to have a clear idea of the tasks you’ll be expecting them to complete to ensure you keep them motivated, challenged, and engaged. You must be able to measure the output of your staff and how much value they are adding to the business.
Once you have taken the decision to take that plunge and hire your first employee, it’s important to understand that recruiting process especially at this stage of business life is crucial. It’s important to find people who have the right ability and mentality. Working in a startup can be quite demanding and requires flexibility and multi-tasking, so your staff should be willing and able to adapt to this environment. Look for people that have the ability to turn their hand to a variety of tasks. They may not be highly skilled in all these areas but the whole point of working for an SME is to develop on a personal level, so you don’t necessarily have to look for an absolute superstar.
Hiring someone who grows with the business is often a better way to encourage loyalty; they will remember the help you have given them.
You may not be able to offer the same stability and financial benefits as larger businesses, but you can offer something equally valuable, which is the opportunity to be part of a rapidly growing firm. This means your staff will be right in the thick of the decision making process and can make a huge contribution to the growth of the business. This is your unique selling point so make sure you emphasise this in your job advert and in any interviews.
What you also need to do is paint the sky blue – in other words sell your vision for the company. Explain to potential hires the brand values and where you see the business going in the future.
When I made hires at Alexander Mann, I spoke at great length about the plans I had and how I wanted to move forward. This showed people that I wasn’t prepared to just make up the numbers within my industry. I wanted this business to be a real success and this attitude helped me hire brilliant, motivated people.
Small businesses are unique places to work and therefore require unique employees. Get the right people at the right time, and you will be well on the way to success.
When you do hire, make sure you have a catch-up with your employee every week to review objectives and offer feedback on things they did well and what needs improving. I’d recommend meeting every Monday morning to set these objectives and start building a routine.
Establishing this structure in the beginning will only make it easier for you when it comes to expanding the team further.
About The Author
[The author of this post is James Caan CBE – Serial Entrepreneur, CEO of Hamilton Bradshaw Private Equity. Former Dragon, founder of the James Caan Foundation & Former Chairman of Startup loans.]