A 7-Question Quiz to Help Determine Business Readiness
Most contract accountants encounter a time at which they must decide whether or not they are ready and willing to grow their business by hiring a support staff. Some are satisfied with their current workload and income. Others realize that an influx of clients means more demands on their already limited time. These accountants realize that by hiring even one employee they may be able to increase their capacity and their bottom line. But how do you know if your business can sustain one or more employees? Here are 7 questions you can ask to determine if your business is ready for a support staff:
1. Can current cash flow sustain a new employee?Are you making enough money to actually pay an additional employee? Obviously you’re hoping that with some help you could earn even more money. But if your current cash flow doesn’t provide that wiggle room necessary to add someone to your payroll, you may consider increasing your clientele before you increase your staff.2. Is your business stable enough to assume the risk?You must look at more than just cash flow to determine whether or not your business can sustain a new employee. Weigh current debts against your income in order to determine whether or not your business is stable enough to assume the risk a new employee would bring.3. Does your current work load require additional help?The last thing you want to do is hire someone who doesn’t have enough work to keep them busy. If you or your current staff is collectively managing a workload that could keep another person busy than you should consider hiring additional help. Also, if your personal life is suffering as a result of overtime, you should consider lightening your own load by hiring someone to share that burden. Otherwise we suggest waiting until your workload justifies the additional help.4. Is your current need for help long-term or temporary?As you question your current need for help you should remember that a full-time, long-term employee will still be on your payroll when your practice hits a yearly slump or encounters a lull in business. Is a temporary employee more practical? It’s easier to make a temporary employee permanent than it is to make a permanent employee temporary.5. Are your competitors hiring?If your competitors are growing their businesses by hiring support staff you may consider joining them, especially if you want to maintain a competitive edge. And depending on the type of talent they’re looking for, the sooner you place that want-ad, the better. If hiring, you want to ensure you have the prime pick of the talent pool.6. Can you pin-point exactly what type of help you need?Before you begin the hiring process you must first determine the type of help you’ll need. An administrative assistant will come easier than an entry-level accountant. Assess your needs to determine exactly what type of position you’ll be “opening.” Also, list the specific tasks you’ll expect them to perform; this will better enable you to define the position and what skills will be required.7. Is there a sufficient talent pool from which to draw applicants?Now that you know what type of applicant you’ll be looking for, do a little research to determine whether or not your area has a sufficient talent pool from which you could find a qualified employee. Waiting (even a number of months) to hire just the right person is better than rushing to hire the wrong one.
Growing your business by hiring a support staff takes time and considerable forethought in order to ensure you’re taking the necessary precautions as you move forward. If you’ve decided that you do indeed need to hire a support staff, come back next week when we will be discussing how to ensure you pick the right applicant.