If You Want To Grow Your Company, You Need To Hire
There comes a time for most entrepreneurs when they consider –however briefly– the thought of taking on an employee. For most, however, this idea is quickly dismissed, due to the perceived hassle or responsibility. In truth, the majority of entrepreneurs prefer to keep it simple by either turning down work when their schedule is full, or outsourcing additional work straight to other freelancers.
In other words, the majority of the self-employed would prefer to stay one-person shows, responsible only for themselves, a payroll of one, and no headaches that come with managing a team of different personalities.
And this is perfectly understandable. Providing you have enough work to keep you going, then there is no reason why you should be looking for more, right?
Yes, it is right, if you don't want to grow. But if you do want to grow, if you do want to build something that leaves a mark on this world that lifts you up to true entrepreneurial greatness (and that makes you a rich individual in the process), then you won't be getting there alone. A team is needed. You need to build, and you need to have that "team work" mindset from day one.
So how do you go about doing this? How do you weigh up the mechanics of taking on employees, such as your required personal time and investment, the additional fixed costs the company will incur, measuring return on investment (even though it can be a broad mix of tangibles and intangibles), etc.? The answer, as always, is that there is no easy way to do this, but there are some basic rules to follow.
When you feel it is time to take on the first employee (or the second or the third or the twentieth), "why do I need to make this hire?" is always the first question you must ask yourself.
But be warned: if the answer is “because I or the team are just too busy”, that, on its own, is actually not good enough. Your mindset is to grow a company, and yes, that is about manpower, but equally that is about growing through complementary hires. You want to (as often as possible) bring in people that add some sort of value that does not already exist.
So make a list of what you hope to achieve with this hire. On the left side of the list it is a good idea to have the basic job description as a reminder, with that being the practical stuff this person will be doing.
But on the right side is the much more important stuff, because this is what makes this potential hire stand out or not. Here you have to list how this person is going to contribute to growth. Be very specific. It could be through ideas, a certain skillset they possess that might not be needed for the actual job role but one that will benefit your company growth in a different way altogether, or it can even be due to their personality or raw intelligence which you believe will add a whole other level of energy directed towards company growth.
Once you have done that, get back to the practical. Yes, you filled out that left column of the list for a reason. While I love hiring and expanding so as to build and grow, there is only one way to get final approval for the new hire, and that goes back to the basics of making sure that the job description details an actual position with a real need.
Spend a bit of time mapping out a typical working week and assigning tasks to your potential new hire, tallying up how much time you think they will have to invest based purely on the work you currently have in the pipeline. (I have seen so many people hire based on those future projects that "might" come in but never do– so do not make this mistake!)
As a general rule of thumb, if you are able to hit on paper at least 20 hours per week worth of work –yup, just 20!– then chances are it’s time to say “welcome aboard” to that full-time hire. Those other 20 hours usually fill in really quickly once on the job.
Finally, it’s time to crunch the numbers, and sorry, but "ruthless scrutiny" is the order of the day. The cost of hiring an employee does not begin and end with their salary. You’ll also need to consider any additional benefits such as sick pay and paid leave as well as any equipment they need to do their job– computers, mobile phones and so on.
Taking it a step further, you should even factor in the cost of a quick dismissal if things do not work out or if one of your key clients quits on you, thus affecting revenue to the point that you have to reduce costs. One can never really be too cautious, and the entrepreneur who prepares for all main potential scenarios is usually the one who takes good care of the company.
Listen to your gut
Now let's break a bit from the analysis talk and add a little complexity by presenting what is the ultimate reality when it comes to hiring: the final decision comes down to your gut. If you sit and wait for the conditions to be absolutely perfect before making that first hire, then there’s a good chance you’ll remain a lone wolf for a very long time. It's like those who have the mentality of waiting for that "perfect" partner to come along or waiting for the "best time" to have kids. It just doesn't work like that.
There is no way around the fact that there is an element of risk involved in taking on staff, but there is no reward without risk, and again, in terms of accelerating the growth of your business, this is what it is about. Without people, there is no building. To quote Walt Disney, “You can dream, create, design and build the most wonderful place in the world, but it requires people to make the dream a reality.”
And make no mistake, there is much more to this quote than meets the eye. Those people are needed to transform the kernel of an idea into something much bigger. That core idea you envisaged on your own is just the starting point, but what it becomes when others get involved is something much better, more real, and more practical. I have seen many times just how amazingly a product evolves once complementary minds get together on it.
So how to listen to your gut? This is not so black and white, of course. Nor is it grey. It's just an instinct, and from my experience, the true entrepreneur gets it right more than wrong. It often has at its foundation the fear of "missed opportunity," and that is the ultimate driver for the ambitious. Those gut instinct decisions, in other words, are made based on the perceived risk of missing out on something by not taking an action, such as not making that hire.
Are you a natural builder?
There are, of course, also a number of other advantages of taking on employees when it comes to the day-to-day running of your business. For example, with paid staff on the books you no longer have to scramble to find support when your workload increases, nor will you have to pay a premium to find a freelancer at the last minute. And by removing the need for you to wear several hats at once –sales, marketing, accounts, operations and so on– you can properly lead, and believe me, a capable, focused leader is needed.
But really those are all secondary, common sense hiring needs and benefits. The bigger picture always has to do with building to greatness, and that is what hires –or rather people– let you do. The true entrepreneur is a natural builder, and natural builders know very well that the credit always goes to the team, because without the team there is nothing to give credit for.
Related: How To Be A Better Boss
Neil Petch actively assists over 300 entrepreneurs and startups to conceive, plan, and build their businesses on a monthly basis.
After launching Virtuzone as the first private company formation business in the region over 10 years ago, Neil has led the company to set up more than 16,000 businesses, making it the largest, fastest-growing and best-known setup operator in the Middle East.
As the chairman of the holding company, Virtugroup, Neil also leads VirtuVest, an in-house angel investment vehicle; Virtuzone Mainland, a provider of directorship services, corporate sponsorship and facilitator of local Dubai and Abu Dhabi company setups; and Next Generation Equity, a citizenship-by-investment firm. Virtugroup has invested in and supported the growth of multiple companies and delivered passports in over 10 different jurisdictions. Virtugroup also enjoys partnerships with Dubai FDI, the Chamber of Commerce, Dubai Holdings (ARN), VFS, Regus, Etisalat, KPMG, Aramex and Beehive, and has received awards from Arabian Business and Entrepreneur Magazine, among others.
In addition to starting up businesses, Neil has held leadership roles in several companies. He helped establish ITP, the largest media publishing house in the Gulf, which he oversaw growing from two to 600 employees. At ITP, he spearheaded the launch of over 60 digital and print titles, including Time Out, Harper’s Bazaar, Arabian Business, Ahlan and Grazia.
As Managing Director of ENG Media, Neil launched the Coast FM radio station and numerous magazines, including MediaWeek. For the last seven years, Neil has also served as Chairman of GMG, the world’s first interbank financial brokerage based out of Dubai, with offices in DIFC and London. Due to his extensive knowledge and expertise, Neil has been appointed a member of the ‘Ease of Banking’ panel organised by the Chamber of Commerce.
Having lived in over a dozen countries and with a career spanning over 25 years in the UAE, Neil has the ability to merge astute cultural insight with fresh thinking, leveraging his seasoned business acumen, intuition and black book to repeatedly bring ideas to living, breathing success stories.
Neil has appeared in BBC (Dubai Dreams) and ITV (Piers Morgan) features on Dubai, as well as programmes on BBC World and Sky. He has participated as a judge on the radio programme Falcons’ Lair, an entrepreneurship reality show loosely based on the BBC production Dragons’ Den, as well as a similar TV competition hosted by MAD Talks. He now hosts Starting Up on Dubai Eye 103.8FM, the only national weekly show for the startup community in the world’s startup capital.
Neil also lends his in-depth market insight to fellow entrepreneurs and helps cultivate Public Private Partnerships as a Task Force Member of the Advisory Council, a coalition of key decision-makers and prominent movers of the UAE business landscape, led by EMIR and the Ministry of Economy.
He is also a regular speaker, panelist, and economic commentator, specialising in the SME sector.