What financial considerations should I think about when building a team?
Q: Dear Ruchi, I think it’s finally time to hire within my business! I can no longer manage every moving piece of my business alone, but I am nervous about the financial risk of hiring. What are the financial considerations I should be taking into account when building a team? I’m not sure where to start.
A: Yay for you and yay for growth! This is such an exciting time, as building a team is an important milestone that not only brings new responsibilities but also signifies the growth of your business and impact!
Now, let's address the understandable worries that might come along with this process. When I started creating my team at Watch Her Prosper, I was filled with excitement, though I also felt like I had taken on a whole new role. It's important to remember that the key to success lies in not waiting until you're desperate for help, which you're already ahead of! Planning is crucial when expanding your team.
Let's dive into a few financial considerations that you should keep in mind as you move forward…
Have a clear understanding of your income and project out your cash flow. This will help you anticipate the financial impact that comes with expanding your team.
Set aside funds specifically for your new hires. Building an emergency or growth fund in advance of hiring will provide a safety net for your employees, ensuring there is enough to pay them if something unanticipated happens and if they need additional training and support.
Understand the distinction between freelancers and employees. Depending on your business needs, you may choose to hire either, and each comes with its own financial considerations. Take the time to familiarize yourself with the legal and financial obligations associated with both options. (We covered this in a previous Ask Ruchi. Take a peek here!)
And most importantly, trust yourself and money: trust that you have the ability to continue to grow and expand, and make decisions from a place of abundance.
Remember, building a team is an exciting step forward, and with careful planning and consideration, you'll be well-prepared to embrace this new chapter in your business. And as always, we’re here to help
Here’s to your prosperity!
-Ruchi