For many entrepreneurs, planning growth through spreadsheet analysis is pretty straightforward. Though entrepreneurs may not like numbers, or have a particular affinity towards them; numbers are black and white. Human Resources, on the other hand, are more nuanced, with many shades of gray. I watch my clients struggle with their new roles as managers (instead of practitioners); and I’ll admit, I’ve struggled with this too as I’ve grown my consulting practice: how to balance the “doing” with the “managing.” What is my new role in the business? What roles do new hires play?
When I saw an advertisement for a webinar, “From Entrepreneur to Manager: Multiple Roles, One Goal,” I immediately signed up.
The fact is, as your business grows, you will need to hire people to help you. There just isn’t enough time in a day to do everything. When you hire employees and expand your business, you will start delegating and honing your HR skills — learning how to hire employees that are a good fit your business as well as having the technical skills. You will train, delegate, and sometimes fire. The skills that brought you to this first level of success are not necessarily the same skills that will bring you to the next. As a start-up entrepreneur, you bootstrapped, scrimped and saved. You were in the fields weeding and harvesting, at the farmers’ markets selling and delivering to your wholesale customers. As CEO of your business, you’ll devote less time on the day-to-day and more on big-picture operation. You’ll learn new skills in your new role as well as learning to delegate your old responsibilities.
While growth almost certainly requires more staff, there are a few things to consider before you start hiring.
Money
Employees are “more expensive than you’ll imagine,” says Dr. Ananbel Beerel, management consultant, and presenter of aforementioned webinar. Before you add employees, make sure you have sufficient funds to carry you through until they pull their own weight. First of all, you start paying salaries almost immediately (but really not more than a month out depending on your pay cycle), yet the employees don’t bring in revenue until 2 – 3 months after you bring them onto your team. Second, new employees need infrastructure – whether it’s a desk, uniform or harvesting snips. They need the right tools to start working right away. Finally, new employees require training. Whether it’s your own time or sending new hires to a class, you will need to devote resources to them.
Work through your budget to see if you can, in fact, afford employees. And when you decide to take on employees, monitor your costs.
Independence
Or lack thereof. As a manager, you give up some of your independence to do things exactly as you want, when you want. You become dependent on your employees to get this done and help you grow your business. Hopefully, you’ve hired the right people.
Perhaps, the biggest challenge of managing a team is learning to delegate. You know you can do it faster and better, and you don’t always have the time to train and fix mistakes. The alternative isn’t better: if you fail to delegate then you burn out and lose employees.
Motivation
The passion and effort of an entrepreneur, or a small team, can carry a business considerably into maturity. The motivation comes from within. As the business grows, and you transition to manager, your employees will gain motivation from you. To keep them on track, you not only need to be a boss, but also a coach, mentor, confidant and friend. A good manager has positive energy, patience and empathy. As everyone is motivated differently, you need to meet employees where they are; it’s a science and takes time to master.
No matter your specific product or service, achieving scale means taking on more employees. The dynamics of a business – from its culture to its cash flow – change when people walk in the door. People are an investment; they require physical inputs like desks and computers, capital inputs like wages, and perhaps most importantly, managerial inputs. For employees to provide a high return on investment, they need to have clear job descriptions, expectations, alignment and goals. Setting this managerial infrastructure takes time, practice, and empathy.
I’ve been thinking about this topic for a while and you can read more about my musings here and here. If you have tips or articles to share, drop me a line!