Small business growth and expansion doesn’t always mean employing more staff

Managing growth and expand your team is always a hot topic, and businesses would do well to remember that each company is unique and therefore, so are their needs.

There is no one size fits all approach, but small businesses should consider capacity, outsourcing, skills and financials before making a decision, says Mponeng Seshea and Yolisa Tshabalala, founders of Imizizi, a people management and consulting company that helps businesses with their transformative people management (HR) needs.

Capacity required

The capacity required is the first factor to consider. “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.

Seshea and Tshabalala say one of the things they did right, was to keep their internal operations very lean, which means their running costs for the business was low.

In turn, this meant that they did not need to go through a process of letting people go because they had no work for them.

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Outsourcing for small business

Small businesses must remember that outsourcing is still very much a go-to solution.

However, the business owner would need to be very clear on what their core business or services are and then 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 it also allowed us to focus on our core service,” Seshea says.

Yolisa adds that at the time, instead of getting an accountant or IT person inhouse, they 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.”

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Skills consideration

The small 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, Tshabalala says.

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Financial consideration for small business

According to Seshea, 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 the cost to company of an additional employee in their budget, but they must remember that there are many other costs directly linked to an additional staff member, such as training costs, work equipment, additional workspace and consumables.”

The biggest non-financial consideration is time, Tshabalala says, time to onboard and train the person on the company’s ways of working, introducing them to the culture, mentoring and performance management.

However, Seshea says, expanding a team must correlate to a direct need to best offer service to your clients.

An example of the questions to ask yourself will be:

  • 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 employing another staff member fit into the goals set for the year?
  • Is the need short term or long term?

Tshabalala says if a small business can comfortably answer these questions and be sure that expanding the team by getting additional resources is still the right decision, then it is often the right time to appoint a new staff member.

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