As a small business owner, seeing your company grow can be exciting. Whether you're hiring your very first employee or your fifth, this is an important benchmark in your small business's success. But making the decision to expand can be nerve wracking enough to make any entrepreneur sweat.
As you approach this big choice, it helps to create a checklist and look at the decision holistically. The truth of the matter is, many startups fail because they cannot find enough capital and hiring is an expensive investment. If you're unsure whether or not it's time to open up new positions at your small business, here are seven red flags that may signal it's time.
You're turning down work.
Ultimately, deciding whether or not to hire often boils down to your workload. If you're finding that your plate is so full that it's affecting your productivity, it may be time to seek help. Landing clients is always exciting as a small business owner, but taking on work you can't handle can lead to angry customers and less-than-stellar work. Take a look at your workload and decide if more help will pay off in sales.
You're losing solid business.
Similarly, if you find that customers are turning their backs on you because of frustrations with your process, you may want to consider bringing another member onto your team. You can't please everyone, and losing a customer or two is a normal part of any business.
But if you find that it's happening consistently for similar reasons (slow turnaround time, disorganization, etc.) then it's time to figure out what part of your process is slowing you down--and whether or not you can hire someone to specialize in that task.
You're getting negative Yelp reviews.
The Internet has opened the floodgate for customer feedback. If you feel you've noticed a decrease in business, but need tangible confirmation, online reviews are a great place to start. Bad reviews can be a painful read, but you can use them to focus on how you can improve. If you're noticing reviews about slow service or disorganization, it could be a hint that your business is understaffed.
You're able to write a detailed job description.
A good indicator that your company is ready for a new team member is if you can write a very specific job description. Describe your employee's day-to-day tasks. Is it enough to fill-up an eight-hour shift? Do they need a specific set of skills, or is it all over the place? If your would-be employee has more than enough duties to fill an entire day, it's probably a good time to hire.
You need someone with a specific skill.
No small business owner can know it all and there are likely areas of your business that could be done better and more efficiently with a pro. Perhaps the accounting side of your small business is slowing you down, or you need someone to manage customer service issues and your needs haven't been met with a freelancer or contractor. If you find that the task you would otherwise hire a freelancer for is an ongoing responsibility for your company, it may be more beneficial to invest in a full-time employee.
Here at Fundera, we often prefer to hire internally rather than using contractors. Our brand is important to us, and we have found that investing in an employee and teaching them the Fundera ins-and-outs usually has a better payoff than using individual contractors.
You (or your staff) is making more mistakes.
It's natural to make a few, but if you've noticed more and more small, avoidable mistakes happening, you may simply be overloaded. Signs of an overworked staff include forgetfulness, a heightened emotional state, and a decrease in the overall quality of work.
Company morale is important and happy employees make for a more pleasant office environment. It's important to take care of your staff, especially when you're a small business.
You haven't taken a vacation in a year.
Your mental health is as important as your staff's, and the same goes for overworking yourself. Your small business is your passion, and probably takes up a significant portion of your life. The issue comes when it's no longer enjoyable, or cutting into things like sleep and time with loved ones.
A good indicator of this is looking back to the last time you took a personal vacation. If it's been longer than a year, you may want to consider finding a way to outsource some of your responsibilities.
Sometimes, it's not just about hiring.
Sometimes fixing a rut in your business's growth is as simple as adding a new member to your team. However, it's important to note that some of these issues could be caused by more than just needing an employee.
Problems like negative Yelp reviews and diminishing customers could be the sign of an issue from within the company--and investing in a new hire may not fix that. Before you make that hire, it's a good idea to dive into your product and business plan as a whole to ensure you've worked out any lingering kinks.
Hiring employees means that your company is healthy and growing. Hiring is a big investment, and you should always be sure the value justifies the cost, but bringing in the right people can be extremely valuable in the overall growth of your business. If you're low on capital, but sure that a new employee (or two!) will increase overall growth and revenue, a small business loan could help bridge the gap. Just be sure to crunch the numbers and calculate whether that hire will truly be worth the cost of the loan.