As an entrepreneur, knowing when to expand your team can be difficult. Hire too early, and you may not have enough work to keep the person busy; hire too late, and you risk not having the talent to execute for key customers. For companies struggling with this dilemma, the following key indicators can help identify when it is time to hire:
1. Your capacity does not meet the demand
If you find yourself daydreaming about cloning yourself, you are most likely overwhelmed with work and need to consider hiring. Missing deadlines or meetings because you are short on time is also a good indication – as are complaints from clients. Maybe you have been turning down work or have identified a new revenue stream that you have neglected to pursue because you don’t have the time to execute on new contracts.
2. Your responsibilities are outside of your core competencies
Most technology entrepreneurs start their businesses out of a passion for advancing the technological landscape with innovative solutions – not because they dream of executing marketing campaigns or sales strategies. When starting your company, you most likely took on the role of jack-of-all-trades, but now you are realizing that the time you spend sorting through invoices is less valuable to your company than the time you spend in the developer’s chair. You wouldn’t have your mechanic cut your hair, so why do you have an engineer creating your marketing strategy? Staff your weaknesses so that you have a team of complimentary skill sets.
3. The growth of your company depends on it
You may need help to support your current customers so that you can continue to execute on your contracts, or you may need to hire to support new business or expansion into new markets. If adding a person to your team will allow you to expand your business or execute your company’s vision, hiring should be on your radar.
4. You understand the return on investment
Hiring is expensive. You will need to consider the person’s annual salary, but also the expenses of training, bonus, benefits, and vacation in your cost benefit analysis. You will need to assess whether you currently have a steady revenue stream to support this new cost, and the effect of this hire on your revenue. How many new clients or new markets will you be able to support and what are the anticipated revenues? If there is an acceptable return on investment, you should start collecting resumes.