ChrisGoodfellowWhen cashflow or investment allows for a new hire it’s often difficult to know what gap to fill first. You’re still handling the marketing, but it’s not your strong suit. The finance ‘desk’ is a mess of receipts and invoices that could make an account cry. And, you really need to make space to work on the business, rather than in it.
So, how can you figure out what the most effective next hire is? Here we’ve looked at four approaches shared by entrepreneurs that have been through the process to provide you with inspiration.
1. Stay on top of staff workloads
It’s really common for people working in startups to stretch themselves, so it’s crucial you keep an eye on whether people’s workloads have become unhealthy.
It’s important to schedule regular one-to-ones with the team or to have line managers do so. This isn’t to talk strategy, but to ask how they’re doing and what their biggest challenges are and how they’re dealing with their workload – watch out for signs of stress or burnout, people will often hide the fact that they are overloaded. This may seem formal in a startup, but it really helps identify any issues. If there is a problem, it’s time to either get them to drop tasks or hire help.
“Listening to our team is the biggest indicator to gaps in the hiring process. We chat to every member of the team, weekly, for 30 mins, which helps identify and learn when the workload is higher than usual,” says Olly Culverhouse, co-founder of electronic document signing platform Signable puts this at the forefront of his strategy.
2. Hire to match your growth expectations
If you want to grow revenue you normally need to hire in sales and marketing positions. Any company that plots a hockey stick-esque growth chart without budgeting for a serious investment in staff is fooling themselves. And it happens all the time.
A solid understanding of your sales and marketing funnel will allow you to work out exactly what kind of support your team needs to meet its revenue targets. The planning process involves balancing assumptions about the potential opportunity and how much of it can be captured with the funding available.
Your average salesperson might bill £100,000, but new hires take three to six months to get up to speed. If you want to increase sales by £500,000 next year you’re going to have to budget for the business paying five-plus salaries (assuming some level of attrition) in the short-term before the money is billed, paid and in your bank account.
It doesn’t have to be this complicated in the beginning. Many startups choose to set short-term targets and grow organically, adding people to the marketing or sales team when cashflow allows it. This is the approach Signable’s Culverhouse has taken to scale his team to 10 people.
3. Look into the human element of your KPIs
Business owners often use health-check KPIs on a weekly or daily basis to see how the business is doing. These are data points like cash in the bank, stock levels and sales pipelines, which allow them to react quickly to an opportunity or firefight any issues.
If there is a problem, the first response is to dig into the immediate problem, but working through these issues also provides a wealth of insight into where there are gaps in your team.
If the company’s debtor days are increasing the finance function may need support or perhaps you should create a collections role. If spend by key clients remains flat there may be an opportunity to bring in an account manager to free up sales people’s time and generate more income from existing accounts.
4. Find time to work on the business
Telling a business owner to find time to work on a business, rather than just in it has become a well-worn cliche because it’s such a crucial piece of advice.
Founders in growing businesses will often stay involved in the minutia of service or product deliver long after it’s feasible. This is driven by an understandable desire to maintain quality and a sense of personal enjoyment. The problem is it can take away employees’ agency, bottleneck projects and prevent leaders from having enough time to build the business.
If you think this might be an issue there are two useful techniques to try:
- Develop a process that alerts you to check a piece of work rather than getting involved in every project automatically. This could be a client complaint, a regular check of every fifth project, keeping an eye on delivery statistics or a mix of all these things
- Write down all the tasks you’ve done over the past three weeks on Post-it notes and place them on a table in groups based on the type of activity (sales, finance etc.). Get rid of the ones that aren’t moving the needle and delegate others. Think of the remaining groups as potential hires or parts of a new job role, particularly if there’s a large group that isn’t part of your core skill set
Knowing when and who to hire is a real challenge for any small business owner. The answer will often rely on gut feel, but running through a few light-weight processes like these can help tease out the reality of the situation and bring in strategy that goes beyond the day-to-day necessities.
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Karina Kundzina
Hali Shapcott
