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Staffing for Start-ups – Why You Can’t Afford to get it Wrong

Staffing for Start-ups – Why You Can’t Afford to get it Wrong

Author: bTa_vantage/Monday, July 30, 2012/Categories: Blog

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If you're like most new business owners, you're probably head down and focussed on running your new enterprise. When it comes to staffing, that simply means getting people in the door to help your new venture grow, right?

Unfortunately, too often the right staffing strategy is overlooked by start-ups in favour of rushing out to hire. It's something we see across a range of industries, and it could result in problems for your company down the track.

In our experience roughly 30% of income goes towards staffing. Provided you get your staffing strategy right, you'll ensure that 30% of your income is very well spent.

To expand or not to expand

Staffing decisions can be difficult because there are costly implications on both sides of the ledger – whether you over- or under-hire.

Without doubt one of the biggest mistakes of a start-up is to overstaff too soon. Some small business owners think they need staff for particular roles, yet later realise they've allocated resources to the wrong parts of the business, or didn't consider the ongoing costs and management overheads associated with additional staff.

If you're a small business owner looking to hire, consider the following:

  • Consider where your time is best spent. Can you justify time spent managing and training new staff?
  • Will you need to compensate for this by hiring additional support?
  • Can your business support the ongoing costs of staff, and their increasing market rates?
  • How much revenue do you need to justify bringing in another staff member?

Staffing for profit vs. staffing for need

Often the difficulty for start-ups is not so much determining how many people to hire, but rather the type of personnel to employ.

Do you need income producing staff, or admin support? What will be best to help your business grow at this early stage?

You don't necessarily need to justify staff via revenue; it may simply be a need. One of the most flexible initial staffing options for startups is an "administration all rounder" who can initially perform many functions under one role and can grow into a future firmly defined role with your business. A part-time bookkeeper to look after accounts and administration and manage cashflow may fit your startup needs.

To help you determine where in the business you need hired help, consider:

  • Are things getting done on time?
  • Are you spending too much time on tasks that don't require your skill or experience?
  • What impact – sales, business development, cost saving, efficiency, customer service – would a new staff member bring?

Do you have personnel policies in place?

Growing your start-up brings added responsibilities. And while there is no law in Australia requiring you to have staff policies, they can be very helpful to clearly establish your requirements and expectations of employees. Think about email and internet usage, or professionalism and behaviour in the workplace.

Get your startup staffing in order

While there's plenty of things to think about when starting a business, don't let staffing fall by the wayside. Giving short shrift to staffing issues might simply cause bigger problems down the track.
Good staffing strategy benefits from a sound business budget – read more in our blog post Business Budgeting for SMEs.

And if you need staffing advice tailored to your business, contact bTa Vantage today.

Disclaimer: This information is generic in nature and provided on a discretionary basis only. You must always seek professional advice regarding its applicability to your own circumstance.

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