From the course: Creating a Business Plan

Determine how many people you need

From the course: Creating a Business Plan

Determine how many people you need

“

- Your business plan needs to lay out your people plan and that people plan needs to be built from the bottom up. You need to look at the demand factors that are going to drive how many people you need. What job families do you need and where will you hire them from? Do you need operational folks? Do you need finance, HR, IT? Will they be employees or will they be contractors? How are you going to use vendors to augment your internal personnel strategy? You have to think through what are the ramp up times and the training requirements for somebody. Just because you say you need someone doesn't mean they're going to be effective in the role on the day you hire them. You need to work backward and say, "It's going to take us three to six months to find this person. And after we have them, it's going to take two months to train them." This all needs to be part of your people plan. How are you going to staff as you grow your business and what's going to drive that staffing growth? So if you take on new customers, how many new customers do you have to have before you hire an incremental person? And when do you achieve those scale benefits? When is that hiring going to flatten out while the business continues to grow? You'll also need to lay out how much do these people cost. What's the turnover going to be? How much are the benefits you're going to pay them? All these numbers are going to feed into your financial plan. And by building your people plan based on the demand factors as your business grows and laying out that plan on a quarterly basis, you're going to be able to more accurately predict what your financials will look like. In the beginning of your business plan, you'll even want to lay out your staffing forecast on a monthly basis. For example, I started a technology startup at one point. The initial staff was just the management team. All IT, legal, finance was outsourced, and we had no support functions, no sales staff, and we didn't need any service given where the business was. Now, our business plan called for as the business grew, we would need to add certain personnel. As it scaled, we said at this point, we're going to start adding sales staff. And then at this point, we'll add marketing staff. And when the business gets to this point, we'll add technology staff. So the business growth drove the staff growth and we had a clear picture of what those personnel needs would be. So as you lay out your business plan, think through all the different job families and what's going to drive their growth, how much they're going to cost you, and what the pace of hiring will be.

Contents