“Do I grow my business and put on more staff or stay as I am?”
“My sole trader clients often have questions about business growth and taking on new staff. I often draw from my own experience as a business owner when advising them. After all, I’ve navigated these very same questions in my own business life.”
While fast-tracking business growth is the aim of the game for many entrepreneurs, expansion often requires bringing on new staff. Doing so can be risky and time consuming, especially for smaller firms and sole traders.
We sat down with Jocelyn Hudson, owner of Your Place or Mine Bookkeeping Service, to ask her about the pros and cons of hiring staff to grow your business. What’s her advice for those thinking about expansion?
What are the benefits of hiring new staff to support business growth?
Investing in new talent is often key to growing your profits and enhancing your stability.
If you’re the sole employee, you must continually ‘sell yourself’ whereas if you grow, you can ‘focus on selling your business offerings’, which would now include your trusted staff and brand.
New team members also allow for an expanded client base, as you have capacity to bring in and serve more clientele. This means if a client drops off, you can rely on a larger customer base.
When you commit to hiring a team, you also have the hidden benefits of a sounding board. The ability to bounce ideas off your team, especially when it comes to client concerns or formulating the best advice, is immensely valuable.
Another massive positive would certainly be taking time off!
What possible drawbacks should small business owners consider before taking on staff?
Finding and training staff is often a major challenge for busy sole traders and small firms. It takes time and significant effort to source, hire and train great employees.
It takes even longer to build full confidence in leaving important business matters with them.
Another risk to taking on more team members is the extra time, effort, and liability when it comes to payroll responsibilities. The administration involved in paying tax and superannuation, while remaining on top of compliance and government regulations, is undoubtedly onerous. (This is especially true when you’re a sole trader with little support and no experience in hiring and managing new staff.)
What’s your experience with hiring and adding staff to your own team?
Did I mention taking time off? It’s hard to overstate the importance to being able to take a holiday when you’re no longer the sole breadwinner and employee.
I recently planned a much needed 7-week holiday to the United States, but I was only able to feel confident and financially stable taking that trip, because I could trust my business to the team I had built.
On the other hand, when taking a holiday, you really need to be prepared. For example, we have procedures in place so someone can step in to do a client’s work if the regular staff member is away sick or on holidays, thereby ensuring all the clients compliance time frames are still met.
We also have a well-constructed CRM which ensures everyone knows what has happened in the past, along with a workflow system to ensure nothing is overlooked.
I found that by bringing on staff, I needed to be ready for a lot of hidden costs and pressures on my time. It’s not just staff management either.
For example, I recently encountered a long service leave responsibility when a valued long term staff member left my business. While it’s fantastic that I had such a valued and wonderful employee stay with me for so long, and be such an important part of my team, you also need to be prepared for these often-unexpected realities.
Any pearls of wisdom can you share with businesses who are looking to grow but hesitant to take on new staff?
Before you consider hiring staff, you first need to have enough business and cash flow to make it worthwhile. If you’re unsure about whether you have enough customers, wait until you’re in a better position.
If you want to become more stable, be able to take time off and bounce ideas around with a team, you should consider starting with one staff member to see how it goes.
If you’re not the type to be able to handle the extra responsibility of payroll management and staff training, then your decision is a lot easier. Keep your business model simple and self-reliant.
The questions you ask yourself about taking on staff and growing your business are often ‘did I leave it too late to grow?’ or ‘has it gone too far to manage?’.
It may be a cliché, but it also comes down to your personality type, lifestyle, and ambitions.
Jocelyn and her team specialise in in Reckon Accounts Desktop, Reckon Hosted, Reckon One & Reckon Point of Sale.