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Dr. William Osgood is recognized as one of the world's leading experts in entrepreneurial education and small business development. As an award-winning author, scholar, and practitioner in the field of entrepreneurship, he has contributed to the success of millions of ventures, written dozens of business management books, launched a number of entrepreneurial ventures, and consulted with numerous organizations on issues dealing with venture creation, finance, and high growth strategies. He is the cofounder and CFO of the Knowledge Institute for Small Business Development (KISBD).
Your new business is finally starting to gain some traction. Your work pipeline is full and customers are referring your services. Revenue is strong, but you’re beyond the capacity of what you can do alone. It is time to add more people.
Unfortunately, here is where the problems start. Most emerging businesses know that they need more hands, skills, brains, and energy to support growth, but haven't the faintest idea about whom they should hire, when they should hire, and what they should have the new employees do.
Maybe you hire another IT professional to help with the increased workload, but with nobody focused on sales, the work soon dries up and you now have an employee salary to worry about.
Or maybe you hire a sales professional but don’t offer much training, assuming that sales knowledge is all they need. Nobody really knows what to do. Job descriptions are non-existent. Revenue isn’t increasing as fast as it must to support your new hire, and panic is starting to set in.
Sound familiar?
What to Do to Prevent Hiring Nightmares
To avoid the kind of unplanned, haphazard growth that can strangle a business, it’s important to answer three critical questions:
- What needs to be done?
- Who will do it?
- How will you know that it was done?
Here is where you need to step back and take a hard look at your growing business. The first question, “What needs to be done?” is answered through a process of Functional Task Analysis.
Functional Task Analysis is the process of identifying the many functions required for your business to operate and breaking those functions down into individual activities and tasks. You can start out with a simple worksheet that identifies…
- Every task that needs to be performed.
- The skills needed to perform each task.
- The amount of time per day or week needed to get each task done.
With this sheet in hand, you not only have the outline of what tasks are required to run your business, but you also know what skills are required and how much time is needed for each. Laid out on a task form or matrix, you can group tasks and activities by skill into specific jobs that can be assigned to specific individuals. As the business grows, this grid also provides a visual way to understand how to regroup tasks to keep a job manageable for the existing employee and provide the requirements for creating a new position to support growth.
While the process of creating a Functional Task Analysis may sound straightforward enough, it’s usually more complex than it seems. For example, say your goal is to increase the number of clients you have to boost revenue. In order to do this, you’ll have to…
- Work more hours to serve these clients (aka increase production).
- Allocate more hours for service support, billing, and other administrative functions.
- Recruit, select, hire, orient, and train people to help you (either with administrative work, sales efforts, or completing client projects).
All of these will take time and energy from other activities, and even negatively affect your cash flow until your new hire(s) get up to speed enough to at least cover their own costs. The more clear you are in laying out exactly what they need to do and the skills they’ll need to complete those tasks, the more you will avoid hiring the wrong person or hiring the right person and having them flounder.
The best way to be clear about what you want in your new employee? A great job description.
The Essential Job Description
If you don’t have job descriptions that spell out what task a job entails and what skills are needed for that task, you are very likely to wind up with the wrong people and a chaotic business environment. Job descriptions help everyone in your business: they provide you with the specific guidance you need to recruit individuals with the skills, aptitudes, and attitudes needed to get the job done. Once you’ve hired these “right” people, the job description makes it perfectly clear what they need to do and how they will be evaluated for their work.
The format for a job description is far less important than its content. There are many forms and guidelines available on the Internet; just pick one. The important part is to make sure that it includes…
- A description of the work the job includes.
- Skill set requirements to complete that work.
- Expected performance outcomes.
A Quick Summary: Scaling Up by Hiring
In a small business, employees are the most important component of business success. To achieve that success, you must have a clear vision of how your business functions and an equally clear picture of who you need to achieve that functionality.
To get that clarity…
- Identify specific goals you hope to achieve.
- Create a rational growth forecast that outlines how your business will reach those goals.
- Use Functional Task Analysis to identify the skills and amount of time needed to support the growth forecast.
- Create job descriptions that clearly state the work that needs to be done, the skills and knowledge required to do that work, and how performance will be measured and evaluated.
- Use the job descriptions to recruit the right people, orient and train them, and guide their work. Also, provide a fair and equitable basis for managing, monitoring, reviewing, and evaluating their work.
Having the right people with the right skills and a clear understanding of how their work contributes to the business’s progress makes it possible to have an efficient operation that supports growth and profitability. A true win-win for all involved.
For more information about Dr. William Osgood and the Knowledge Institute for Small Business Development, visit the KISBD website.
Image may be NSFW.
Clik here to view.
Clik here to view.