Hiring one or more talents could be one of the most challenging decisions a business owner has to make from time to time. However, it doesn’t have to be. As long as you are clear on your current financial position, the vision you have for your business, and the future financial projections, you will be able to answer the question quickly, “Should I hire right now?”
Whether you are looking at hiring a freelancer, a contractor, or a fulltime employee, these three telling factors stand. Let’s dive deeper into each indicator.
Your Current Business’s Standing
This starts with ensuring that your accounting and finances are up to date. Only then will you be able to conclude your business’s current financial position, confidently.
Are you running a profitable business? Because if you’re not profitable now, how are you going to have the cash to pay for your new team member’s salary? Assuming that they will generate enough sales for your business to cover their first thirty days might be a naïve supposition, especially if you don’t have a track record of onboarding and getting them up to speed quickly and performing financially to the maximum. Some businesses are used to employing people and already have a structure that enables new hires to be impactful on the bottom line as soon as possible by devoting time to training, mentoring, and support as soon as they go on board.
If you have enough leeway to be able to take on a new team member and not have them perform on their optimum level in terms of revenue generation for at least 60 days, you can hire someone right now. Within these 60 days, you should be able to give training to your new hire. After 60 days of transitioning, training, and mentoring from you, your newly hired talent should be able to earn for your company at least double their salary.
If profit is not available and you’re hand-to-mouth most months, then you need to get that sorted out first. You might want to reach into your emergency fund to bankroll new employees, but make sure that you give yourself (and your employees) a maximum of 60 days to reach the full contributing potential to the bottom line. It is important to layer in that the goal of hiring is so that the new employees bring positive revenue to your business.
Otherwise, you’re just going to add cost, which would then require you to work harder to earn more and give them a salary. If this happens, then you miss the point of hiring!
Your Vision For Your Business
What’s your vision for your business, and how does this slot together with the vision you have for your life? It’s essential to be clear on the type of business you want to run, as this would affect your decisions, including hiring.
Do you want to run a small boutique business serving high-end clients, or do you want to be a big business with lots of employees? Will hiring now support the vision you have for your business?
Make sure that your hiring decision is strategic to your goals, and not one made out of desperation because you’re drowning in work. Maybe improve your current operations and workflow first, before considering taking on new talent.
What does your profit plan for the next 12 months look like? What is the cost and revenue structure right now, and how would it change with a new hire?
Your team’s achievements should be clearly defined in numbers and laid out in a matrix to ensure that revenue targets are hit. Are they able to afford their wage? This is the bare minimum. Ideally, each employee should bring in at least double his or her salary, and up to four times that amount at full speed and maximum effort.
While this can be tricky to determine, you must be able to sort it out. You cannot improve it if you can’t measure it, as they say, so make sure that you work with an expert in creating your profit plan as you intend to strengthen your workforce.