How to justify a new hire - catch 22

g.Roseng.Rosen subscriber Posts: 2
I run a small business with my husband. Our demand is growing significantly, but we feel stunted in terms of growth because the two of us cannot physically work any more than we already do. We've hit a plateau in production because of this, and need to hire someone as soon as possible.

The problem is that right now, with current inventory and other bills, we barely take enough pay home for us to live on. I'm not confident that we could pay even an hourly rate consistently to a new hire right off the bat. Sales would have to ramp up with this new employees help on the production front, which would ultimately lead to our projected profits and ability to pay them. It feels like a catch 22 because we need the new hire to be able to produce enough product to fill demand, but since we currently can't produce enough, we don't have the income to pay this new employee yet. I'm not sure how to justify hiring someone, and how to figure out exactly where their paycheck would come from. Any thoughts?

Thanks!

Comments

  • tinbugtootinbugtoo subscriber Posts: 12 Bronze Level Member
    Hello! The glass ceiling of time and resources is such a common dilemma. I'm not sure what kind of business or customer you have, so I can only throw some general ideas out there, so here it goes.

    Scenario 1: You may have customers that sign a contract to receive product on a regular basis. If so, you can obtain a deposit to fund the new employee. Your contract will guarantee the work and funding will be there for the duration of the employment.

    Scenario 2: Free interns. Perhaps you don't have customers that contract with you and your business is of the sell-as-customers-find-you variety. There is a good chance that college folks may need to get summer credit by interning for a company. Contact your local colleges and ask what programs are available and what qualifications you must meet. Personally, we've always paid our interns because we like them not only to have the great work experience, but also bank a little money toward school. Snoop around and see what's available.

    Scenario 3: If you have consistent growth that you can prove with hard numbers and project a continuation of that growth, you may decide to make more money, you must spend more money. Perhaps it's time to see what options your business banker has available for you. Another option for quick growth is a private investor. Maybe it's a friend or relative who wants to multiply their money or even get a small sliver of ownership in exchange for money that doesn't need to be paid back. There are dozens of ways to work this. You might want to sharpen your Powerpoint skills for making some convincing presentations to help solidify your position.

    These are just a few high-level general ideas I hope might spark something.

    Which ever way you decide to go, I would highly recommend some advertising to drive as much traffic as possible to your sales front. That could include increasing your interactions on social media, collecting email addresses and sending your email blasts (regarding sales, news, new items for sale, etc.), maybe vinyl signage on your vehicles, increase SEO efforts if you have a website, that sort of thing. Local sales through mailers and events may help too although this requires an advertising budget as do paid online social advertising efforts.

    Lastly, I would recommend keeping up on your networking. Join groups and meet ups with other like-minded people, industry peers, anyone who you can talk too about what you do and what you have to offer. You never know who happens to be looking for just such a thing. There may be uses for your product you never even had thought of that may be discovered by talking to other entrepreneurs and potential end users.

    I hope my rambling is helping. Best of luck to you in your efforts!
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