The need for talent grows as your business grows. But, can you afford to hire a team at this time?
Cash flow is a common issue when hiring. Money’s unpredictability makes for a delay when it’s time to add new hires. Your company may lose money because of lost opportunities if the delay prolongs. This affects the company’s hiring process, which ends up too rushed and risky — resulting to a bad hire.
“Taking a business through growth cycles requires owners to be patient about the plan.” — Vanessa Graham, a consultant in Baton Rouge, Louisiana. She provides strategic business advice to growing companies.
Graham recommends to treat the endeavor as an investment. If done right, growing your company’s operations will result in a positive cash flow, she says.
Here are tips that can help you stay on top of your cash flow while adding to your team.
Smart budget
Forecasting the revenue and growth of your business is an indicator if you can afford to hire.
It’s too risky for the business owner and the potential hire if the current cash flow plus reserves will run out before hitting the 12-month mark.
Graham says you may need to get your company leaders and HR or hiring managers on the same page when it comes to keeping cash flow a priority.
Graham also says, “Make sure that financial performance is measured not only in terms of profitability but in terms of cash flow. Keep financial partners in the loop so they can be there and provide support when needed.”
Temp, contract, & part-time options
Do you have to commit to a full-time employee or to try more flexible options?
As you grow, part-time employees can increase your bandwidth proportionately, while temporary or contract employees can be additional labor and respond to short-term needs.
Do it gradually if you’re unsure of taking on a full-time person. Build up from part-time to full-time, or from temp to perm, to give your cash flow some breathing room.
Compensation
You may need to get creative with your compensation model when you add to your staff on lean cash. Performance-based incentives and other aspects of the work can be more important — other than base salaries.
For new employees, establish goals based on their performance and how the company is doing overall.
Your business can attract employees with a well-defined employer brand, while the culture in the company can retain them. In place of a high salary, both can help you attract talent.
Startup loans in Australia
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