Your business is growing, you have less and less time to spend with your family, and you’re rushing through jobs to fit them all in. You might even find yourself turning work away.
These could be signs the time has come to hire more employees, and take your business to the next level.
It isn’t always easy to spot the right time and there are multiple, much more subtle considerations to weigh up.
Of 5.7 million small firms in the UK in 2017, 4.3 million — or 75% — are non-employers.
Some will never make the leap to employing staff. Others will make the decision too late, hiring in a panic, after damage has already been done to the firm’s reputation.
Is your business at capacity?
Have you ever felt like you cannot take time off because there’s nobody to fill your shoes while you’re away?
Entrepreneurs are by nature unafraid of hard work but it’s easy to push that tendency too far.
Research published recently in The Guardian claims half a million people in the UK suffer from work-related stress each year. It can manifest in all sorts of ways, from insomnia to physical pain.
If that sounds familiar, your business is ready to take on staff so you can think about reclaiming your weekend.
If your business has positive cashflow, you should be in a position to fund taking on a new employee.
Not only will it help you avoid burnout, it can help make your business more profitable in the long run.
Can you afford to take on new staff?
You need to have enough revenue to cover not only salary and benefits for your new employee, but also the costs of any training you may need to provide.
Depending on the approach you take, the recruitment process (adverts, specialist headhunters) can also be a big one-off expense.
A 2017 survey by the CIPD found that the average (median) cost of recruiting a new member of staff is £2,000, rocketing to £6,000 if you’re after a senior manager.
As an outline, if your business has sales in the book for the next two months, you can consider yourself in a good position to take on a new staff member.
For instance, if your new employee has a monthly salary of £1,500, you should have at least £6,000 of monthly income in the pipeline from future sales.
This revenue should be in the books before your new employee signs on the dotted line. These figures will depend on other factors too, so do seek advice on your specific circumstances.
Obviously, if your revenue significantly exceeds this, you could consider taking on more than the one new worker.
What hiring options do you have?
If budgets are tight, one option to consider is taking on an apprentice.
By law you have to pay your apprentice at least £3.70 an hour in 2018/19, so long as they are under 19 or in their first year of employment.
A 22-year-old apprentice with a year’s experience under his belt is entitled to a minimum hourly rate of £7.38.
Employees over the age of 25 must be paid at least £7.83 an hour.
Another option to consider would be to take on an employee on a zero-hour contract.
The latter has been controversial in recent years but there are cases where they work for both employer and employee.
They can be useful if you want a workforce to suit fluctuating demand, such as if your industry is seasonal.
You can bring people in when you don’t have the in-house numbers or skills to cope, and arrange contracts to finish once your busy period ends.
We can help
Hiring new members of staff is a far from straightforward for any business owner.
If you lack the time, take advantage of our Love My Business service and let us help you look at your business strategy.
Get in touch for more information.