When To Start Hiring Employees
While hiring employees is a big milestone for any up and coming business, it's important to do your research on when it’s the right time to do so.
Whether we like it or not, starting a business involves far more than one good idea followed by millions in sales. While this isn’t entirely impossible, doing well in business is more so about consistency, organisation, and of course - hard work. Once you’ve started to build a consistent revenue stream and have a better idea on what the path forward looks like, it’s inevitable to start hiring employees as a means to free up your time and grow the business - but what should business owners know before taking the plunge?
Five Signs You’re Ready To Hire An Employee
Make no mistake, hiring your first employee is a big deal. While the prospect is exciting, there’s more to hiring employees than just finding the right person for the job. Aside from working out when the time is right, just a handful of other factors include navigating payroll, tax and a medley of other legal requirements.
According to the Australia Bureau of Statistics, more than 60% of small businesses cease operations entirely within their first three years of trading. Given that a lack of cash flow is often sighted as one of the key reasons why a business goes under, it’s crucial to ensure that you don’t add additional wages to the mix until you’re ready - but how will you know when it’s time to start hiring employees?
Wait Times Are Too Long - One of the best indicators that it’s time to hire some help is when you’re turning down opportunities for extra sales on your product or service, for no other reason than the fact that you can’t keep up with what you’ve got. If this happens over a period of time longer than a few weeks, it shows that your income stream is steady.
You’ve Hit The Wall - Hiring employees to grow your business is a bit of a catch twenty two. If your business isn’t growing, it’s a sign that you’ve maxed out your capabilities as a lone wolf, but if you take on someone without having thought about more income opportunities, you risk a dangerous middle period in cash flow. Either way, moving forward requires help.
Quality Is Suffering - If you’ve built a reputation on providing a top notch product or service - and that standard is starting to slip because you’re too busy - then it’s a sign you need more hands on deck. If you fail to identify this yourself, there’s a high chance that your existing customers will do it for you.
You Can Afford To - Even if the numbers say that you’re doing just fine steering the ship on your own, consistent income over a reasonable period of time means that your business is stable enough to start hiring employees. This way, your time can be freed up to brainstorm expansion methods while someone else handles the day to day tasks.
Paperwork Is Falling Behind - It’s the responsibility of every business owner to ensure they meet their legal obligations linked to tax and tackling the bookwork. Although somewhat of a necessary evil, this chews into the valuable time that you have to serve your clients. If you’re not ready to hire someone for this, consider outsourcing.
If understanding the legalities linked to your business finances isn’t your strong point, then it may be reassuring to know that you’re not alone. In fact, brands of all shapes and sizes enlist the services of an accountant to free up their time, while knowing that their financial obligations are already taken care of by the professionals.
Partner With The Ultimate Business Advocates
Whether you’re starting a business, purchasing an existing one, or even reevaluating where your current one stands - all require some form of financial know-how if you hope to successfully navigate your legal requirements as well as hitting your business goals.
What you choose to invest in or shy away from as a business owner can have a domino effect that ripples through your entire team - so are you confident in your financial choices?
At Muro, we are more than just accountants. We offer our clients strategic business advice and ongoing support to help them reach their business and financial goals. Get in touch with us at Muro today to ensure that you’re on the right path for success.