What to do when… business is picking up!

You open your email. There’s 3 emails — all from prospects who have accepted your proposal. You’ve been writing proposals like mad the last few weeks, and now they are all getting accepted! Your heart begins to pound. It’s happening, business is growing. But wait… Who’s going to do all this work?

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The best moment in every business owner’s life is when your client accepts your proposal. The worst moment follows right after that — when you realize how much work you have to do! But don’t fear, winning new business is a time to celebrate — and get help. Here’s a few points on what to do when your business is experiencing growing pains.

Do you have the capacity?

First, let’s get our arms around exactly how much work we have to do. Take out all the contracts you have sold and try to forecast just how many hours you are going to need to complete the work for each one. It’s best to break this down by week (if possible, but at least by month) and by person who can accomplish the work. Put that into a spreadsheet with weeks along the top and people down the side, and you’ll see how many hours of demand there is for each person’s time. If your people are delivering services full time, they can “bill” about 85% of their work hours — so in a 40 hour week they can produce about 34 hours. If your demand is for greater than that, they are going to need overtime, or you’re going to need to hire.

Now let’s look at the pipeline. What new business proposals are out there? What’s likely to come in? You can add those deals to your capacity spreadsheet too. Of course these aren’t sure things but it’s likely that some of that work will come in. What’s you confidence factor? You can scale the hours you forecast from deals that haven’t closed by your confidence (e.g. if you have a deal that will require 200 hours and you have a 50% confidence that it will close then book 100 hours into your forecast).

Get more help!

Now you have a clear view of just how much trouble you are in! How much overtime is it going to take with your current people? Can they give you that? If not, it’s time to hire.

If you have a short term need, say you need to deliver services in the next two months, it’s time for a freelancer. Freelancers are great . Whether it is 20 hours per week a for a distinct period of time, or a specific project that you could easily pass off to someone else, you can’t really justify making a hire. But you can reach out to a freelancer who could conceivably start the same day. You might pay more, but this is incremental revenue (over and above what you need to pay your fixed costs) so you can live with a little less profit.

If your need is longer term, or if it looks like you might need someone full-time it’s time to get hiring. It takes 2 – 3 months to get someone in house and productive, so you need to be planning ahead and start looking at candidates before your need is critical. Hiring is an investment of your time — as much as a day a week over that time frame (less if you work with a recruiter) — so be prepared. But that work will pay off when you have another team member who’s making money for you.

Raise Prices

One other thing to consider when sales are taking off is pricing. When work is coming in faster than you can deliver, you can always control that by raising prices. If you raise prices then only the prospects that really need your help will buy and it will help you weed out those pain-in-the-butt clients that are using up your capacity but not really making a difference (and sending you referrals).

Once you’ve done all of that, make an appointment for a massage, and a nice dinner with a bottle of wine. You need to celebrate! It’s finally happening.

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