Small businesses – considerations and concerns when expanding your team

Mponeng Seshea & Yolisa Tshabalala| Founders | Imizizi | mail us |

How small businesses manage growth, and the expansion of their teams is always a hot topic.

We are often asked how best to go about it as many businesses make the mistake of thinking growth and expansion is directly linked to their staff complement, yet this could not be further from the truth.

Each business is unique and so each business’ needs are unique. There is no one size fits all approach, yet there are certain factors to consider which are broadly relevant.

Capacity

The first factor for consideration is the capacity required to provide a service to the client. If you can do it alone, keep it that way for as long as possible.

Then you need to consider what capacity is required internally to keep the business running. One of the things we did right was to keep our operations internally very lean, which meant our cost of running the business was low.

In turn, this meant that during the hard times, we didn’t need to go through a process of letting people go because we had no work for them.

Outsourcing

Outsourcing is still very much a go-to solution. The business owner would need to be very clear on what their core business or services are, and thereafter evaluate which components they can outsource, especially if outsourcing works out to be more budget friendly than hiring a permanent resource.

For instance, as we grew, we considered partnering with smaller service providers who could assist with certain support services, which gave us the time to start considering how we grow and diversify, but also allowed us to focus on our core services.

At the time, instead of getting an accountant or IT person inhouse, we outsourced these functions to other small to medium businesses, resulting in lower costs than having a person on a full-time basis internally. We find that outsourcing non-core functions is a better solution than trying to oversee everything internally.

Skills

The business owner would need to compare the required functions with the existing skills internally by identifying any additional functions that need to be addressed resulting from gaps identified.

Then they need to assess the scope of the functions and evaluate if they are a permanent or a temporary need. Following that they would need to consider if there are internal staff who can be upskilled to fulfil those tasks at the correct capacity levels, without jeopardising the client’s requirements.

Financial

The most crucial part is the financial and non-financial consideration when deciding to expand the team. Does the small business have enough budget to cover the salary?

A lot of small businesses make the mistake of only considering in their budget the cost to company of an additional employee, however there are many other costs directly linked to an additional person.

For example, training costs, work equipment, additional workspace, and consumables. The biggest non-financial consideration is time; time to onboard and train the person on the company’s ways of working, introducing them to the culture, mentoring and performance management.

However, you look at it, expanding a team must correlate to a direct need in how best to service your clients.

An example of the gates of thought to go through could look like:

• Can we offer a better service with existing staff?
• Can we offer a complimentary service to an existing client with the same staff complement?
• Can we offer the same services to a new client with the same staff component, or do we need more people?
• Where will the new employee’s salary come from?
• How does this fit into the goals set for the year?
• Is the need short term or long term?

If a small business can comfortably answer these questions and be certain that expanding the team by getting additional resources is still the right decision, then often it is the right time.