Growing a Business Without Busting the Bank

Hiring Employees

If the company is doing well in business but service is lacking, it might be time to ease the strain on human resources. Expanding an employee base, however, is one of the toughest issues businesses face.

For years, Murray did all the work for KISS, but "when you're doing everything yourself, you're limited to taking vacation or ever retiring." But hiring people was a worry because she built her business on service - delivering in a few days instead of months -- and developing the kind of trust among her clients that brings KISS a lot of referrals. "I've been on the other side of the table. I couldn't get anybody to show up on time and those are real pet peeves for me," she says, so she strives to provide the kind of service she had wanted.

But, she learned, "you can't grow the business and physically be going out and do the work. I had to hire technicians." And that took a while. "I went through quite a few employees before I found the ones I work with now," she says.

When business owners make the decision to add employees, Hanson says, they should "look for people who are problem solvers. If people working for you don't have good customer relations, business is probably not going to do as well. . Be more comfortable delegating responsibility," she says. "It will help prevent you from getting burned."

Learning to delegate is one of the biggest problems to growth that Hagan has seen. "Sometimes the original founder becomes a bottleneck, where all decisions need to pass through him or her," she says. That sometimes is compounded by a reluctance to put policies and procedures into writing, which can keep communications flowing when the decision-maker is not available.

"Another problem is developing the workforce that's necessary for successful growth," she says. "Many times, an entrepreneur is great at what he does, but not at training people."

One way of dealing with that challenge is to turn over those personnel responsibilities to an PEO, Kraska says, such as his Employee Professionals. "We replace their entire payroll and personnel departments. . A professional employer organization covers a myriad of services that free up a client to run their business better and make it more profitable."

As for the company's own growth, from 400 to 3,000 represented employees, Kraska says, "that kind of growth has to be managed. You generate a lot of cash but you have to bring on talented people and pay those people well to get the job done."

Specht says, "It's difficult finding qualified employees, because the employment rate is low." A tight labor market therefore adds to the cost of payroll.

In expanding Abby Services, "we've really managed to keep administration costs down," Strachan says. "As far as recruiting, that's a major cost. We're all competing for the same pool. I never had a problem in the Ohio area finding staff. Down here, it's a monumental problem."

With years of background in human resources, delegation is not a problem for Strachan. It's just a matter of "making sure you have the right people in place."

The trick to managing growth is determining when to add staff or invest in resources without outpacing business and getting into a cash flow bind, he says. "It never levels off. It's constantly in motion, and if you take your eye off it, it can get away pretty quickly."

Jill Tyrer is a freelance writer.