Dear Aunty B,
I started a wholesale business several years ago and while the first year was a struggle, I have been growing very quickly.
I now have 10staff but I am wondering what is the perfect number of staff for a business? Should I sit on 10 staff for a bit and consolidate, or should I resource up and go for 20 staff?
Of course 10 is the perfect size, but I am a woman so you would expect me to say that.
Look, the moment you move beyond 10 staff, your life starts to change.
On the one hand, 10 staff are a delightful number of people to manage (usually). You are close to the coalface, still dealing with customers, still providing terrific service. You know your niche and you are in control!
On the other hand, you are chained to the wheel, forced to spend every day working in the business instead of on the business. A staff member is sick, often it is you who take their place.
You have to work at a relentless pace with limited resources and people, and you have to be jack-of-all-trades because you are overseeing all function.
You are always worrying about the wages bill because the level of profitability the business is capable of producing at that size will always be capped. You are also reliant on a handful of customers, a handful of suppliers and a handful of staff. That means the financial risk is always very real. You stop, the business winds down.
You also have to keep growing or you become a me-too business and will get squeezed out of the marketplace.
So is 10 a bloody awful size?
Well just try growing to 20.
Many of the things you loved about work such as creating jobs, training people and them develop – you have to let go of a bit. Once you get towards 20 staff you need the same infrastructure you need for 50. You also start to need economies of scale.
And a whole lot of other things start once you have more than 20 employees, but that’s for another column.
But can I give you a warning?? Throw off your confusion. Decide quickly if you either want to stay small with all its advantages – and disadvantages – or you are going to grow quickly with the aim of getting acquired or becoming a big business.
The last thing you want is to grow and then plateau. It can be hard to take off again both physically, financially and organisationally.