Constructing and balancing an optimal team for your business can be a complex task. Choosing the correct people to build and grow your vision is essential, but how to make the right choice at the right time can be like a juggling act. Choosing roles and connecting skills to grow necessary areas means knowing ahead of time what your business requires. Hiring must be connected to a clear understanding of your current and future business needs.
What is the Impact on Your Cash Flow?
How will a potential hire affect your current budget and cash flow. Determine how much training is required and the time period until the new staff person is up to speed, and hopefully generating revenue.
Factor in their salary and overhead costs such as equipment, training, and performance raises over the long term. The new hire will affect your cash flow. You need to know exactly how much and when it will have a positive impact.
Forecasting your cash flow from near term through to the long term impact is crucial. using cash flow forecasting software, such as Dryrun, can make this a fast and painless process.
Forecast their Revenue and Profit Potential
You need to know how much money they are likely to make each month and over the course of the year from the new hire. For instance, if you charge by the hour, what is their billable rate? How many billable hours can you expect a month? Do you have enough work to sustain that many hours moving forward on a permanent basis? Compare these details against the original costs you determined for the hire.
Some staff won't directly generate revenue and profit. In these cases, it's important to know your overall financial picture to ensure that you can absorb the additional cost and experience a benefit from the new hire.
Again, build these factors into your Dryrun cash flow and sales forecasts.
Use Scenario Planning to Understand the Risks
Compare scenarios to understand your best and worst case scenarios. You’ll have to dust off your crystal ball and anticipate potential issues.
What happens if the work dries up or the new hire is not as efficient as you expect? What if training take too long, or they end up not being the right fit after a few months? What adjustments can be made in your business to prepare for the additional staff costs?
Scenario planning software, like Dryrun, can help you model out all your options.
Consider the Costs of Not Hiring
Ask yourself some questions about your current situation: are you limited in what you can offer or can be expected to realistically deliver? Are you getting passed over on potential jobs due to understaffing or is pressure on overloaded current staff impacting morale?
On the opposite side of the coin: are you spending too much time doing tasks you should have staff do? Is it taking you away from growing and managing your company?
Just because someone is capable of completing a variety of tasks within your business does not mean they should be tasked with completing all of them. This especially applies to you the owner. Chances are that you know about operations from the ground up, but overseeing the finer details means you are bound to be unavailable for big picture moves. This might be the clearest indicator that it is time to hire.
Is Hiring a Contractor and Alternative?
The cost may be higher for the interim, however if you aren’t in a position to hire long term this may be the right solution for your business. Be sure to understand the qualifications the candidate possesses, and don’t cut corners when it comes to the interview process, expectations, and training. The person you choose needs to be able to perform to the standards you set.
Dryrun is a simple way to forecast your cash flow, build budgets and track sales projections.
_____
Dryrun delivers clear, actionable forecasts in a fraction of the time you spend in spreadsheets.
Book your DISCOVERY CALL to learn about the Dryrun advantage or start your FREE TRIAL today!
