Taking on staff
StEP 15
Your business is growing so it’s now time to evaluate whether
you should take on staff. We look at:
1 Which bits of your job you should stop doing.
2 Cheap ways to outsource work.
3 Where to find good employees.
4 How to interview.
5 Legal issues for employees.
How to know when it’s time to employ staff
You have to work out your own cost to your business by follow-
ing these three steps.
1 Work out where you are ‘adding value’
Write out a timesheet, and fill it out for one week. At the
end of the week, go through the list of things you’ve done,
and rank where you add the most value. This is the area that
will advance your business the furthest in the long term, and
couldn’t be done by anyone else.
Then work out what percentage of your time you spend doing
this really productive stuff, and how much of your time is just
spent doing work others could do.
186 brilliant start-up
2 Work out your ‘opportunity cost’
The trouble too many owners fall into is that they treat every-
thing in the business as a cost, except for their own time. The
cost of your time in the business is not what you are saving by
doing work yourself, it is the long-term value you could be build-
ing. You want to grow your business to £150,000 in your first
year? Your opportunity cost therefore is roughly £90 an hour.
3 Outsource everything you can
If it costs less than your hourly rate to get someone to do a job
for you, then you should get them to do it. This frees your time
up to grow your business. So, out-
source as many of the non-essential
jobs from your timesheet as you can,
for example, book-keeping, couriers,
manufacturing. This should leave
you free to concentrate on the tasks that really grow your busi-
ness long-term, such as sales.
brilliant definition
Opportunity cost
Opportunity cost is the alternative cost of what you could be doing
with your time if you were not doing your current task.
this frees your time up to
grow your business
brilliant example
I was listening to someone who wanted to set up an Italian bakery. ‘Where
will you get your supplies?’ I asked. ‘I’ll drive to Italy to pick them up
because that’ll be cheaper,’ came the answer.
Taking on staff 187
And for those jobs you can’t oursource, you’ll need to take
on staff.
Mojo meter: take time off
Have you had the following conversation with a fellow small
business owner recently?
You I’m knackered, I had to get up at 6 this morning…
Friend That’s nothing, I got up at 6, but only went to bed
at 2am.
You Lucky sod! I may have got up at 6, but now I’m going
to work a 28-hour day, and my next day off is in
three weeks.
There’s no doubt it took you long hours to get your business to
this stage. But that doesn’t mean you have to become a com-
plete masochist about things. Nobody can work at full capacity
for long periods (in fact, the maximum length for full concen-
tration is only 40 minutes). You’ll find your decision making
gets worse, as does your creativity and passion. It’ll start to rub
off on your customers.
More often, you’re chaining yourself to work out of a sense of
guilt. And work has a nasty habit of expanding to fit the time
available. So, it’s essential to give yourself a break. The whole
point of working for yourself is being able to control your
Having picked myself up off the floor, I pointed out the maths. That’s three
days of driving. He’ll save perhaps £125 in courier costs. I can’t believe he
couldn’t generate 10 times that if he spent the time going out and visiting
customers, finding other suppliers, checking the competition and looking
for savings.

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