How do I Hire Someone without the Cash Flow to Support Them? In Blackboard Fridays Episode 110, Jacob talks about Growth Planning. Need this implemented into your business? Talk to the international business advisor who can do exactly that – Contact Jacob, Learn More, or Subscribe for Updates.
This is a fantastic viewer question! And if you have a team, it’s probably a pain you’ve encountered at some point – knowing that you absolutely NEED another person on the team, while simultaneously knowing that you can’t afford them.
So how does this unstoppable force of business growth meet the immovable object of your budget? If it were as simple as ‘JFDI’ then you already would have FDId, right?
In this week’s episode, I’m going to share 5 approaches to help you make this critical decision. You don’t need to apply all 5 – in fact, I’m hoping that just one of them is right for you and helps you with this next, bold step.
Does that guarantee the new recruit will be the best business decision? Hell no, but you can’t grow a business without taking risks, and if this problem is keeping you awake at night then it’s probably a risk you need to take.
Watch this week’s episode here.
Who is Jacob Aldridge, Business Coach?
“The smart and quirky advisor who gets sh!t done in business.” Back independent since 2019.
Since April 2006, I’ve been an international business advisor providing bespoke solutions for privately-owned businesses with 12-96 employees.
At this stage you have proven your business model, but you’re struggling to turn aspirations into day-to-day reality. You are still responsible for all 28 areas of your business, but you don’t have the time or budget to hire 28 different experts.
You need 1 person you can trust who can show you how everything in your business is connected, and which areas to prioritise first.
Here’s a really common business question that I’m often asked to answer. How do I recruit a necessary team member when I don’t have the cash and the cash flow available in order to do that? Can understand the pain that these business owners are going through. You’ve got the growth opportunity or the growth desire, and yet you’ve got the stress and the fear of putting somebody on only to run out of money or to possibly have to put them off in the near future. So how do you, as a business owner, get clear and confident enough to make that courageous decision? Here’s a couple of things that will hopefully help.
The first is asking yourself, what is the actual cost of putting this person on? A lot of business owners think in terms of annual salary, how that’s a $50,000 a year role. I just don’t have $50,000. If you break that down, that’s $1000 a week, $4500 a month. That becomes a much more palatable and bite-sized amount of money. You don’t have to find $50,000, you just have to find $1,000.
The second question is how clear are you about the value of the role? Because putting on new people in your business generally means that there will be more revenue created. Now, that might be direct if you’re putting on another delivery person, somebody else who’s billable, who can do the work that gets charged to the clients. Then there will be a direct return on investment in that role once you get them inducted and up and running.
The other thing that can sometimes get lost is understanding the value of their role on you and on your time. Now, in episode 38, we talked about hiring your first team member. There’s some specific details there that are a little bit different to if you’re hiring your 10th team member. But, regardless, a useful question is will this role this person, helped me create more revenue for my business?
Now, in some instances it may not. But even if you’re putting on a personal assistant, or an admin person, or marketing person, if it’s giving you more time to do what you want to do more of, then that is an advantage for your business that needs to be factored in to this investment.
Runway and risk, so this is a little bit of forward cashflow planning. We’ve got an understanding that there may be a direct or indirect value to this role. If you look ahead over the next three months, how much revenue have you got incoming? How much cash reserves have you actually got? How much access to an overdraft or other debt facilities have you got? Which is where the risk comes into it, are you willing to tap into?
Even though you may not have the money there today, you may be able to map out that runway and see that the next three months while that person’s getting up to speed are not going to be as calamitous as you fear. That in and of itself may give you the confidence to bring them in and to get that growth happening. If you’re still uncertain, if you’ve crunched the numbers and you still don’t feel that you’re quite ready, then let’s flip the question.
Let me ask you this, what’s the cost of not growing the cost of not recruiting that team member? Because, sometimes, you’ve got to appreciate that it’s the opportunity cost that you’re letting go that’s far more expensive of the actual cost and risk of hiring that person.
I you’re clear that this is an absolutely necessary thing for your business to do, then you’re just going to have to take that risk. Or risk the business not growing, not achieving, and getting swamped by competitors or other market forces.Lastly, you’re still not convinced my question is why are you actually wanting to recruit another person? I mean, it’s causing you all of this stress. Are you just caught up in that escalator a feeling that you have to keep growing, you have to hire this other team member?
You’re super busy, and so you need to recruit, even though when you look at your vision you don’t really want to because you don’t have to. Yes, it’s true that if a business isn’t growing it’s dying.
So if that’s your fear go and watch episode 36 of Blackboard Fridays where we actually talk about five other ways to grow your business without recruiting anybody, if you don’t have the cashflow and you don’t really have the desire to recruit somebody, if that’s what’s holding you back, look at other strategic options that you have in front of you for growing your business without adding to the headcount and without adding cashflow stress.
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