Scaling up sustainably: Grow your team without overcommitting

Scaling up your business

Growing your small business into a team enterprise can be daunting. The amount of work coming in will tend to surge and retreat, leaving you alternately overworked and underworked – you don’t want to commit to an employee when you’re not certain of your workflow.

How can you manage workflow surges and get the help you need, without overcommitting to staff costs?

Start with on-demand assistance

The first step might be to outsource some of the jobs you least like doing, or during your busiest periods. That might mean using a local freelancer or finding an offshore service to take over your social media, for instance, or your invoicing. Those services can be an affordable way to get on-demand help when you need it, giving you the ability to drop that cost at any time if your workflow drops away.

Can you take on an apprentice?

An apprentice can be an extremely cost-effective way to get an extra pair of hands. A wide range of trades can participate in apprenticeship schemes, including construction, engineering, beauty, farming, tourism and sports. Apprenticeships are currently free for apprentices and subsidised for employers by the Apprenticeship Boost. You’ll need to train them and pay them at least the minimum wage.

For those who aren’t in a trade, an intern could be an option to help over the summer or uni holidays.

Contractors and part-timers

Using contractors and part-timers also gives you some flexibility when it comes to growing your workforce. Contractors are usually more expensive, because they need to pay their own employment costs of ACC, holiday pay, sick pay and so on. The advantage of contractors is that you can pay for the expertise you need, when you need it.

Part-time employees are more of a commitment, but you can build in some seasonal or work-based flexibility on their hours – and they’re less expensive than contractors.

Once you are successfully managing contractors or part-timers, you’ll have a better understanding of when you can make that jump to a full-time employee.

Managing the team as you grow

When you’re responsible for a team, particularly when they’re working on diverse projects for a range of clients, you’ll need a way to manage them effectively. SME is partnered with simPRO project management software, which is designed in New Zealand to meet the needs of local businesses, and lets you do your invoicing, quotes, field management and project management all in one place.

If you need some advice about sustainably building your team, we’re here to help. Get in touch and we can run the numbers, consider the pros and cons, and give you the information you need to make the best decisions for your business.

Planning how to navigate seasonal dips in income for 2021

Cashflow Management

In any normal year, seasonal dips in income can be highly challenging when you’re a small business. But, fortunately, SME Financial has some proactive ways to predict, plan for and overcome these dips in revenue.

The key to dealing with seasonal dips is to know when they’re most likely to occur, and to have measures in place to spread your income and revenue pipeline over the course of the year.

Understanding seasonality in your sector

If your business is seasonal such as pool supplies, or a ski gear specialist, you’ll be used to the peaks and troughs, but many ‘non-seasonal’ businesses experience times during the financial year where sales and revenue peak – and, on the flipside, where sales and revenue experience a pronounced dip.

When income is low at certain times of the year, it makes for challenging times.

So, what are the key ways to plan for this kind of seasonality?

  • Forecast your seasonality – it’s vital to know WHEN you’re most likely to experience any seasonal dips. Looking at benchmarking reports for your industry is one way to predict the seasonality in your niche or sector. But you can also use your own accounting data to great effect. Look back through your profit & loss reports and spot where the peaks and troughs have occurred over preceding years.
  • Charge a premium in peak time – one straightforward approach is to apply premium pricing for your products/services during the busy season. By increasing your pricing, you boost your overall revenue, giving you more working capital to see you through the leaner months when sales and income are at their lowest.
  • Offer additional peak-time services – offering added extras and other additional service lines during peak time is another way to maximise the season. In the months where customers are most engaged, look to upsell these premium services and offer more value. Satisfied clients will be more inclined to pay for added extras, giving you an increased revenue stream from the same number of customers.
  • Target other markets – exploring other related markets is another useful tactic. When you’re experiencing downtime, look for other ways to monetise your existing assets, products or services. For example, if you’re a hotel where sales peak in summertime, offer discounted conference space in the winter months to boost revenue.
  • Diversify your products/services – if one product/service has a known seasonal dip, look at adding an additional product or service to offset this downtime. For example, a a ski resort could promote bike-riding or hiking breaks during the warmer summer months to keep revenue constant. Likewise a pool maintenance firm could establish an outdoor fireplace business for the colder months.
  • Have a regional e-commerce strategy – If you’re dependent on a small local market, broadening your marketing and e-commerce strategies can help to attract a wider customer base – and bolster sales. Paid advertising through Facebook, LinkedIn or Twitter can easily target new geographical markets, bringing in new customers and giving your revenue a much-needed uplift during seasonal troughs.

Talk to us about planning for seasonality

If your business is struggling with seasonal dips, and the resulting impact on cashflow, come and talk to us. We’ll help you identify the timing of your seasonal downtime, and come up with a clear strategy for stabilizing your income across the year.

Get in touch with us today and talk to one of our experienced business advisors.