Planning for Growth: When is it Time to Expand?


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Are you a very small startup (or just you) working on a new product or service, and things are getting a little too busy? Are tasks becoming too much for one person, and you feel you could really use the help? Has your income or funding recently scaled? And has the demand increased for your product/service? Making the decision to grow your team and business can be very rewarding, and at the same time very challenging. You've built a great company, and now it's the next step: making it bigger. 

Expanding your company depends on a few factors.

Money money money

There is a necessary balance of bringing on people when you know you will be able to pay them, and maintain the flow of income after hiring new talent. Especially for startups, the decision to hire is heavily influenced by funding. Can you afford to pay a new person? And what can they offer you that would be worth the cost?

The reality of hiring new people is that you will inevitably slow down the speed of production within a company, especially for startups looking to launch a new product or service. This is due to training and other factors when onboarding team members. Gearing up for the next steps after bringing in new team members is an invaluable investment in time and money. Rand Fishkin from SEOmoz says that doubling the team halves the team (temporarily). "In January (2012), the Moz team was 52 people. At the end of this year, we’ll be close to 110. Growing the engineering team, in particular, from ~18 to 50+ seems like it should mean a lot more bandwidth and ability to build great stuff, but the reality’s more complex".

Furniture or beer?

Business Week recently explored how startups spend their money and it was discovered (not surprisingly) that new companies that are tight on money tend to go without furniture, or come up with creative ways to fill the gap. For example, a company in Florida called Fracture didn't have the funds for décor AND operations. So they had to make the tough choice, choosing to spend money on R&D instead of ergonomic chairs (one employee was using a lawn chair).

Fracture isn't the only company that has to wait for the furniture they really need. Dumpster diving is oddly common (beware of bed-bugs!). A well-designed office is essential for thriving culture and productivity, but when should start ups buy furniture?

Should you expand? And when?

Many issues with expanding can arise from bad hires, expanding too quickly, or trying to grow on a very limited budget. Here are some things to consider when you start thinking about expanding and planning for growth:

  • What is your funding situation like? How much extra money are you pocketing each month that could go towards office space, employees, new product research, etc?
  • Are you feeling overwhelmed by tasks that could be delegated to someone else?
  • Are you spending too much time handling aspects of the company that aren’t utilizing your strong points?
  • Is it common to turn away clients because you don’t have the time?
  • Do you work around the clock? Is your phone always buzzing with emails, phone calls, and texts from clients?

If you have the funds, and you are feeling like your career needs a helping hand, bring on the right person for the job. Before bringing in someone new, make sure you detail a job description so the tasks are clear. Also, make sure you set reasonable expectations for yourself, and create a goal for a year from now, and two years from now, and so on. It helps keep things in perspective.

Have you expanded your company? What advice do you have from a first-hand experience for someone who is considering growing their business? Please leave your comments below!


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