Making IT Profitable:
A Guide for New Businesses & Freelancers

Chapter 12: Scaling Up

Look at you. You've gotten all the way through the book and here you are at the part where we talk about growing your business so it's bigger than you. That's pretty exciting. After all, if you're in need of tips for scaling up and hiring new people, that means your business is successful and you're making a living doing the IT work you set out to do. Congrats! While we won't say that this guide was the only reason you're doing so well, we'd like to think that it was at least one of them. Right? Maybe?

Anyway, now that it's time to hire an employee or two, it's important that you do it right so you don't end up with more work on your hands than before. , an expert on entrepreneurial education and small business development (as well as the husband and business partner of Dr. Deborah Osgood New browser window icon.), spoke with us to offer some tips on choosing the right people to help your business grow.

Before we launch into his recommendations, take a minute to picture what could happen if you hire the wrong way:

Scenario 1: You have scads of work and enough cash flow that you can finally justify hiring someone to help you. Hooray! You bring on another developer and the two of you are busy as bees for a couple of months, but then, with nobody focused on sales, the work dries up. And you now have a fulltime employee's salary to cover in addition to all your other expenses.

Scenario 2: You have scads of work and enough cash flow that you can finally justify a new hire. Hooray! Plus, you read Scenario 1 and were smart enough to hire a salesperson instead of a developer — duh. You're a developer. You're so relieved that you don't have to sell anymore that you stop thinking about sales entirely — but suddenly, your pipeline dries up. Why? You didn't offer your sales pro any training. Because she wasn't familiar with exactly what you do or who your ideal clients are, she wasn't able to bring in the workflow you were hoping for. And now you have a fulltime employee's salary to cover in addition to all your other expenses.

Obviously, these are both nightmare scenarios. But with a little help from Dr. William Osgood, you can avoid them both.

Pre-Hiring Strategies to Prevent Hiring Nightmares

As we mentioned in Chapter 9, your growth needs to be planned to be effective. Start the planning process by answering these three questions:

  1. What needs to be done? Answer this question through what Dr. W. Osgood calls, "Functional Task Analysis." This involves identifying every function required to operate your business (e.g., lead generation) and breaking those functions down into tasks (e.g., emailing prospects, following up with phone calls, etc.). Here's a Functional Task Analysis worksheet New browser window icon. you can use. You may also want to note specific skills a person needs to do each task.
  2. Who will do it? Once you have everything broken down into tasks, you can assign those tasks to yourself or an unidentified third party. Once you see what you're not capable of completing on your own, you'll be able to see which skills you need to hire for: maybe a part-time bookkeeper and a part-time salesperson. Maybe another fulltime techie.
  3. How will you know it was done? Remember, when your business includes people other than yourself, you'll have to devise a system for verifying that all the work is getting done.

When making a Functional Task Analysis, it's important to include interim tasks, such as training a new hire. That way, you'll have a realistic timeframe for when your employee will be up to speed and able to bring in enough revenue to cover the cost of their salary.

While time to complete a Functional Task Analysis may seem like a luxury you don't have, you'll be much better off in the long term if you're thorough in the planning phase. The more specific you are about the various tasks a job requires, the better prepared you'll be to filter candidates and choose one who's a good fit.

Dr. W. Osgood, like Marc Prine, agrees that writing a good job description is essential to finding the right employee. In addition to echoing Prine's advice to include a "realistic" description of what daily work will include, Osgood suggests listing required skills and expected performance outcomes. This sets the stage for good communication and makes it clear how the employee will be measured.

Hiring: Start to Finish

To summarize: when you're ready to bring in outside help, follow these steps:

  • Identify specific goals you hope to achieve by hiring (e.g., increase revenue, serve more clients, serve clients faster, focus less on administrative tasks, etc.).
  • Create a growth forecast that outlines how your business will reach those goals.
  • Use Functional Task Analysis to identify the skills and time needed to support the growth forecast.
  • Create job descriptions that clearly outline what work needs to be done, what skills are required to do that work, and how performance will be measured.
  • Use the job descriptions to find employees, train them, guide their work, and evaluate them in an ongoing manner.

Bottom line: careful preparation got your business where it is today. Whenever you prepare to move into a new phase of development — whether hiring new employees or offering new services — remember that a little planning goes a long way.

Next: Resources

Grab-n-Go Information

IT Contracts eBook
Get It in Writing: The IT Professional's Guide to Essential Contracts
Browse eBook
Sample certificates
See a sample Certificate of Liability Insurance, the proof of coverage you need for most contracts.
View Sample
Sample Quotes & Cost Estimates
See what insurance really costs: actual quotes by policy & specialty.
Get Estimates
Ask A Question
Submit your questions about construction insurance and get answers from our experts.
Read Answers