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When Do I Add People?

Every business owner wants the business of their dreams. But sometimes they don’t follow a unified strategy of people and processes to get them there. It can be hard to know when you truly need more hands to accomplish your goals and keep the business running smoothly and efficiently. Leaders often have trouble “pulling the trigger” and spending the time and money to hire additional people. This can lead to frustration, being overwhelmed, and often confusion on how to keep the business running successfully. It shouldn’t be so hard to know when to grow your team and when not to. 

I’ve been working with a client; I’ll call him Ben. Ben first decided to add salespeople because he was generating more opportunities than his salespeople could handle. The business grew because of it; they were able to take on even more opportunities with the additional team members. Then Ben and his number 2 person were trying to run sales and marketing, operations, and finance. They were running themselves ragged. Ben spent many hours awake at night worried that he had dropped the ball somewhere in his business.  

This led to adding a layer of management between Ben and the company employees. He hired a VP of sales, a VP of marketing, and a VP of operation. They became accountable for each aspect of the business. This allowed Ben to focus more on client-facing activities. He invested in Salesforce, inbound marketing, and other technologies, in addition to people. Now, Ben is well on his way to having the business of his dreams and even takes time off to vacation with his family (without having to worry about how his business is running in his absence!).  

So, when do we grow our team? In my experience, the number one weakness in growing companies is marketing. If we don’t have a powerful industry-dominating strategy, we’ll spend years generating very little traction in the marketplace. Invest in a marketing person, preferably an employee so that they are solely focused on your business. If that’s not an option, then consider an outsource solution until an employee is possible.

If marketing is the number one weakness, then accounting is number two. We must invoice, collect, and pay bills. It’s a necessary evil. We may even pull reports. But accounting is underappreciated and we probably take a quick glance at our P&L and spend little to no time on our balance sheet, cash flow statement, or accounts receivable aging. Who likes to collect money? Because accounting is underappreciated, it’s also often underfunded. At the right time, invest in a controller and support investments made in the accounts receivable and accounts payable staff. I’ve seen cash and profits double when investments like this have been made. 

Beyond marketing and accounting, look for empty seats in your organization. Functions like information technology, research and development, and human resources will need dedicated staff to fill those seats. As the organization gets bigger, the division of labor gets smaller. 

Finally, is there a way to invest in staff in order to shorten cycle times or eliminate mistakes? If cycle times lengthen or mistakes are rising, it could be an indication that more staff is needed to continuing delivering your product or service with high quality. 

In Jim Collins’ book “Good to Great”, when we “get the right people on the bus and get them in the right seats”, we can break through barriers to growth and increase cash flow and profitability. 

Don’t limit the potential growth of your business by running into roadblocks, not knowing how to get around them. If you need help, let’s talk and figure it out together. 

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