5 Things to Consider Before Hiring Other Workers

As a 3X founder, I’m no stranger to hiring. My startup company grew from zero to 5M in just a few years, meaning we were hiring new employees every few weeks to keep up with the growth. There was constant pressure to stay ahead of the curve, but not too far.

I learned some important lessons during this time, especially about when to hire and when not to hire. It is not an easy decision. If you hire too little, you may overwork your staff and lose your edge in acquiring new customers or maintaining existing customers. If you hire quickly, you can be ahead in terms of profitability and cash flow. It’s always a tough journey, and there are no easy answers.

When founders ask for my advice in this area, I recommend that they take a thoughtful approach and avoid making emotional decisions. While hiring a new hire isn’t a permanent decision, it can have permanent consequences if you make the wrong choice. Before you start recruiting, interviewing and hiring more employees, I suggest you consider these five things.

Related: Avoid Costly Hiring Mistakes With These Five Important Tips

1. Defend your bottom line

Entrepreneurs are not usually risk averse. Every morning we leave the body in the morning when we walk out the door. Ask yourself this simple question: Does the new hire immediately put you in a negative cash flow situation? If so, it’s probably best to wait. Without enough of a cash flow cushion to cover additional expenses, you could quickly be in over your head. Consider waiting until you have at least six months’ worth of cash in the bank to cover all new rental expenses. If not, you risk putting a lot of financial pressure on the entire organization, and especially you.

2. Look closely at growth trends

You can avoid dead-end hiring decisions by taking a good look at your revenue growth trends – and not over the past weeks or months but over the past year or more. Are you experiencing steady growth or a temporary bump in sales? Find something and try to identify where you see sales going next quarter, the quarter after that and the next 12 months. Be brutally honest with yourself. Entrepreneurs can sometimes be very confident about the future (it’s what keeps us going!), but don’t be so confident that you make blind decisions. Try to make a data-driven decision, not an emotional one.

3. Assess the real need

Sometimes it’s easy to believe that a new hire will solve all your problems. Try not to fool yourself into thinking that way. Although you and your team may feel overworked, bringing on new employees is a job. Negotiating, training and managing takes time. Creating new roles and positions takes time too – sometimes (but not always) more work than if you were doing the work yourself. Again, it can be a tough journey about how and when to make a decision. Think carefully though, don’t be so quick to assume that your problems will end with a new hire. Take the time to evaluate why you need more help before hiring more help.

Related: Think you need to rent? Think Again.

4. Talk to your team

Before making new hire decisions, spend some time talking to the people on your team who will be directly affected by the new hire. Try to get their honest answer. Sometimes you get your best answers from those at the forefront of your business. You may not need more staff. Maybe you need some reorganization or better deployment of technology, or you may find that certain members of your team need more training. You can’t think too much, and if you make hiring decisions without consulting your team, you’re putting yourself and the team at risk.

5. Remember that you are dealing with people

In the day-to-day hustle and bustle of running a business, it’s easy to forget that you’re hiring people and not moving on. Every hiring decision you make affects a person’s health. If you make the wrong decision and end up letting someone go, remember that job loss is a real hardship and affects all families. Think carefully about your hiring decisions. We have obligations as employers to the people who work for us. People are not numbers on a spreadsheet. They are mothers, fathers, young people and others who are struggling to make ends meet. If you must hire, by all means, hire, but don’t forget to consider the lives of the people you hire.

Related: 5 Signs You’re Making the Wrong Hire (And How to Fix Them)

Business growth always requires you to hire more staff, and sometimes you have to stretch things a little to reach your goals. I know I really did. But do your best to make informed, data-driven and smart hiring decisions that will benefit your organization and the people you hire.