I need new staff but have no money!

Dear Aunty,

We are only a young company, but we have reached a point where we have grown way outside our capacity to manage.

I need a full-time CFO, full-time lawyer, accountant and a PA. I am doing this FY budget and when I put these full-time salaries in my numbers look terrible.

Yet we need their services and I end up paying more anyway buying these services on an ad hoc basis. What do I do? I have already taken them out of the budget and yet I know I will end up spending more on them throughout the year than if I hired them.

And don’t tell me to employ them because I can’t afford it, although we are traveling okay.

Out of control with not enough money

Dear Out of control,

Hmm… Don’t feel out of control because this is your challenge. You have to introduce new processes to get your business to the next stage. This process requires analysis and excellent execution. It can be boring and expensive. But do it you must.

A very interesting story from World Economic Forum that analysed 110 companies in different markets found that those that implemented management processes outperformed those that didn’t.

Management processes are defined by WEF as something that “has a documented process and periodically and purposely executes on that process.”

Of the companies that implemented such processes early on, staff numbers quadrupled and revenues rose by nearly 500% in the first five years.

So when you say you need to hire these people, start off by looking at the processes you need to put in place. Then try and divvy up those processes under existing staff as well as looking at whether technology can assist. For example, can you upgrade your accounting software?

At the end of this you will have a list of things that still need to be done by someone. Often they are more generic jobs. For example, you can hire a CFO who also has an accounting degree who could manage a lot of processes. Or you could hire a general manager with a legal degree.

I do worry though that you are not looking at the option of taking in some capital to fund this next stage of growth. Yes it requires giving away some equity but far better to do that and staff your company properly than to burn out existing staff, act on shoddy advice and worst of all make it up as you go along.

Be smart,
Your Aunty B

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