What to consider when growing your team

My sales have grown significantly in the last few years and I'm expecting $X00,000 in sales next year. How many staff can I afford to hire? 

First, congratulations on achieving tremendous sales growth. Contrary to word on the 'gram, I know that growing a business to multiple 6 figures is no easy feat. And if you find yourself at a crossroad and you are struggling with the horse and cart dilemma, I've got you.

Here are a few things to consider if you want to grow your team but you’re not feeling confident in taking steps to move forward:

1) Begin by taking a step back and zooming way out of your business. On a high level, where will your sales be in the next 3 years? If you're not sure how to figure that out, then break it down by each product or service. What volume can you realistically sell - and equally importantly, do you actually want to deliver?  If you multiply these numbers by your sales prices, you can get a pretty good idea on your total sales trajectory. I would recommend running a few scenarios, from conservative to optimistic.

2) Next, can you think about zooming into your staffing needs? How long does it take each team member to deliver one unit of product or service? Can you break down the hours of work and cost by position, and then apply it to the volumes you have predicted above to come up with the total *human* hours required.? This should give you clarity on the capacity required to meet your sales goals.

3) Then, compare the team you need to your cash position and cashflow to figure out the best way to expand your team in a way that doesn't jeopardize cash. This means building your team based on actual trends of sales growth (predict future sales based on the past growth rate of sales) rather than on optimistic forecasts. This might also mean finding alternate sources of funding to ensure you have 3-6 months of runway as a safety net (because sometimes, things don’t go according to plan)

I would then calibrate those decisions against your other business expenses to understand what your cashflow and profitability would look like in total. 

Okay.. if you're thinking "yes, I get it, but I need more help. what can you do for me?"

This is the work I do with my clients in my signature financial strategy package and I have space for one more client this fall. I recently built a full sales model for my client and we figured out exactly how many staff were required at each level based on their predicted volumes. This model was something that they could take away and continue to use in their business as new information emerged.