Small businesses: big ideas for scaling up
SME leaders know that growth means hiring more staff, a survey by QuickBooks reveals, yet fewer
than ever have the confidence to do so. Fortunately, help is at hand.
For confident small businesses, taking on new staff can be a stepping stone to the next stage
of growth. A larger workforce can deal with more customers, as well as give founding entrepreneurs
greater freedom to focus on innovation and new ideas. However, new research from small business
software specialist Intuit QuickBooks suggests many small businesses are nervous about recruitment
in the current climate.
Just 35 per cent of decision makers at small businesses surveyed by QuickBooks expect to take on
a new member of staff this year. That is a drop compared with the recent past; more than half of
firms that took part said they added to their workforce in each of the preceding three years.
"There is apprehension among small businesses," says Pauline Green, compliance manager at
QuickBooks. "They recognise that hiring a new employee is a significant commitment and
responsibility, and they want to be absolutely sure they're making the right decision, particularly
when they're hiring for the first time."
For many decision makers, concerns about hiring fall into two categories. First, they're worried
about whether their business will generate sufficient growth to support a new hire. Some 61 per cent
of the small businesses in QuickBooks' research say they worry about being able to pay additional
salaries, while 60 per cent are concerned there might not be enough work to keep employees busy.
Second, many businesses worry about the practicalities of hiring. For example, 62 per cent are
concerned about whether new recruits will be up to the job; 49 per cent say employment regulation
and administration has put them off expanding their workforce.
Yet the benefits of recruitment are widely recognised. When it comes to the skills and expertise new
employees might bring, 72 per cent of small businesses are excited by the prospect, while the same
number think hiring could improve productivity. Other benefits that are mentioned include the
potential to expand services to new customers, spread the workload, free up leaders for strategic
work and improve diversity of thought.
How, then, to square the circle? How do small businesses go about securing the benefits that taking
on new employees could bring while overcoming some of the hurdles that stand in the way
of recruitment? For Intuit QuickBooks' Pauline Green, it's all about equipping the business for
future growth, ensuring that any plan for expansion is founded on a hard-headed assessment of
current performance and the opportunities that lie ahead.
"Above all, decision makers need complete visibility," says Green. "They need to be able to see
exactly what is going on in every area of the business in real time. Once you've got that clarity,
you can make better-informed decisions about how to move forward, based on the data."
Many entrepreneurs start out with manual processes and simple Excel spreadsheets. But as they
scale up, they need a way of working that keeps pace: good business management software will
make it easier to stay on top of what is happening in the business, tracking more variables and
providing a constant readout of costs and revenues, as well as crucial forecasting tools.
Payroll software can also help with the day-to-day hassles of managing the workforce, directly
addressing the fears of entrepreneurs about the administrative burden of taking on new staff.
For example, QuickBooks' payroll software links with the rest of its accounting package, so you
can instantly do jobs such as calculating take-home pay, managing tax and national insurance,
pension contributions and generating payslips.
"The idea is to reduce the stress of future planning," says Green. "Once you have a clear picture
of what's going in your business and what is likely to change, then key decisions, including taking
on new staff, are no longer a leap into the unknown."