As a business owner, one of the major pitfalls you should avoid falling into is attempting to grow too quickly. This is something that trips up a lot of companies, to the point where they overextend their resources and lose all control of their operations. Rapid growth, of course, can strain your cash flow, leading to a diluted company that struggles to cope with the increased demand and service quality, and this usually happens because, while the companies are looking to scale, they don’t have the budget to invest in a bigger workforce.
Even if you’re just thinking about branching out to a smaller, side-market, it’s essential that your internal capabilities can keep up – and this means investing in a bigger workforce that can keep those internal processes running. With this in mind, you’ll only know if you’re ready to grow as a business when you know you’re ready to invest in scaling your team. So what are the signs for this, and how can you tell if your business is truly ready to take that next step forward? Here are 3 indicators that show you’re prepared to take on new recruits.
Your Cash Flow is Healthy
The first sign, quite simply, is that your business is generating a healthy profit! Growth eats cash, so if you want to grow safely and sustainably, you’ll need to have a positive, predictable cash flow already in place. This won’t just help you invest in hiring, but it will also help you cope with the added costs that come with a larger team.
Insurance, for example, is an expense that can scale quickly as your headcount grows. Because more individuals are going to be added to your space, workers compensation insurance and general liability premiums are likely to increase as well, so it’s your job to ensure you have sufficient financial reserves to give you room to breathe, and attain all the necessary premiums to protect the company.
Your Demand is Growing
There comes a point when running a business where not growing is going to be just as detrimental as keeping things the same. When demand for your product or service consistently exceeds your ability to deliver, it’s a strong signal that your business is not only ready, but needs to grow in order to keep afloat. For instance, you might notice a growing waitlist of customers, an increased order volume or inquiries, or even loyal clients asking for more products, services, or locations.
While this kind of demand is exciting, it can also create fiction if your internal systems just aren’t equipped to handle it. There are many things that can lead to customer frustration, but delays, declining quality, and bad customer service are some of the most damaging, so make sure you respond to that demand by hiring new employees and beginning the process of development.
Your Team is Reliable
One last thing to remember is that, while you’re responsible for making the decision about hiring a new team, it’s your existing team members who will be responsible for their integration. If they’re not quite ready to do this, there’s every chance the new hires won’t succeed as effectively as you’d like, as they won’t have the information, nor the motivation, to hit the ground running.
A successful onboarding experience depends heavily on the support and structure provided by your existing team, so if you know they’re strong and organised, you’ll know the company is ready to bring some new members into the mix. Once this has been done, however, it’s important to take advantage of this structure. Don’t just hire more people and hope everything falls into place. Use the momentum to refine your processes, delegate effectively, and empower your existing employees to take ownership. By doing this, you’ll create a culture of collaboration and, even more importantly, continuous improvement that makes all your scaling efforts smooth and sustainable.