Growing your business will require more people and resources but honestly, most business owners lose money when growing because they need to consider what we will discuss today, like;
1) Capacity planning
2) A budget for hiring and
3) A Hiring ROI calculator
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Episode Show Notes :
Growing your business will require more people and/or resources but honestly, most business owners actually lose money when growing because they don’t consider the things we are going to talk about today like; Capacity planning, A budget for hiring, and a Hiring ROI calculator. Also, stick around for the Tax Tea of the week - a man arrested for impersonating an IRS employee and filing false tax returns
The Meat :
Capacity planning - how do you know if you need to hire?
Understand what is your team currently spending time on
Understand what the customer is actually paying for
Understand what you NEED to do to meet the customer's desires
What’s your budget for hiring?
How much are you willing to spend on a good employee
Consider taxes, benefits, training, new hiring supplies, etc
What is the cost of a bad hire (don’t rush the process with a bad hire it will cost you more money to replace bad people)
Where do you find people - full-time vs. part-time vs. contractor vs. outsourced?
Your capacity will help you understand what type of employment you need
Full-time - if the demand is more than 25 hours consistently
Part-time/contract - tend to be similar
Dedicated outsource - they don’t work for your company but they are dedicated to supporting your business
Part-Time Outsourced - (the person can work on multiple clients besides yours) if the task is repetitive and the information is not highly confidential
Hiring ROI calculator - how do I know I am getting the value back for my hire?
Have a plan to know how much additional revenue you need to generate for this person’s cost to be covered - breakeven
Profitable return how much additional revenue or new clients are needed to generate 2x, 3x, 4x this person’s cost
Here is an example of what Restaurant - if I hire X and my average sales price is Y how many more customers do I need to have a 2x, 3x, 4x, and is that realistic.