#25: Laying the Foundation to Build a Team

Growth and profitability can accelerate or be bounded by the ability to expand your team. That’s why in this episode, we are discussing the foundation you need before building or expanding your team.

What we cover in this episode:

0:33 – Intro
04:00 – Why are we, as CPAs and business advisors, talking about building a team?
08:34 – Discussing Traction, by Gino Wickman
14:20 – Step #1: Define your vision and direction
19:52 – Step #2: Establish triggers that signal when it’s time to build your team
24:28 – Step #3: Figure out where you’ll find your team
26:21 – Step #4: What is the scope of work being performed?
28:44 – Step #5: Understand it’s not always easy
30:55 – Step #6: Focus on the positive impact and exciting growth that new team members bring

Why are we, as CPAs and business advisors, talking about building a team?

Despite what you may think about CPAs, we’re not JUST number geeks. We get firsthand experience with business owners from a variety of industries and sizes to understand how their teams make them and break them. Even in our own business, we’re small business owners too who have similar struggles and successes with building teams. While we don’t have degrees in Human Relations, we have seen raw, live, experience with understanding how valuable people are, and how they can impact growth or decline in business, so we want to share that insight.

We are growth and profitability advisors and your team plays a large role in your ability to grow and increase profitability. We become very involved in our clients’ businesses, not only in the accounting side, but with the business strategy as a whole. We are able to take a step back and look at the business, big picture, asking questions like “How’s your business running?” and “What are your goals?” Inevitably, we incorporate that HR component into the overall plan for the business. You as the owner cannot plan to do everything by yourself, on your own, with no help ever, and reach your goals. We are giving you the foundations we recommend because we’ve seen it enhance and catapult business owners into a whole new realm.

On the flip side, we have seen lack of direction and action make the business stagnant, because they can’t get the right people, or they don’t know what to look for and these business owners don’t put in the necessary work to fix the issues they keep seeing. Our goal is to help you be aligned and understand what your core values are, what your vision is, what your mission is, and where you want to go strategy-wise.

Discussing Traction, by Gino Wickman

Jami was introduced to the book Traction, by Gino Wickman, by the Vice President of the McKinney Chamber of Commerce, Katherine Blank. Jami was so intrigued by the conversation and the dialogue that she had with Katherine that she went out and bought it. This book focuses on the traction that you get as business owners, and what you need to really define who you are. One of the aspects of defining your business is the people component. The book states “You have to have people that are GWC”, which means “They’ve got to get it, they’ve got to want it and they have to have the capacity to do it.”

Get it
Want it
Capacity to do it

All three of these components are so crucial when it comes to looking for people to join your team. Any team member really needs ALL THREE components because if any one of them are missing, it will lead to issues in productivity, quality of work or a number of other possibilities. We also talk about the diagram that helps analyze a team if you already have one. Or alternatively, maybe you start outlining the things that you want to look for in a team, if you haven’t built your team yet or you want to expand your team.

This book, Traction, also asks questions about time, which always makes us quantify what we want to do, and it really pushes us outside of our box. Three of the eight questions they pose, which really captivated us, were:

What is your 10 year target?
What’s your three year picture?
What’s your one year plan?

We like the dynamic perspective of these questions and the fact that you may not have considered your future goals framed in this way. You have to dream first before you can even consider goals as a possibility. Then, you have to be very clear, and intentional, about what your strategy is as a business owner, and where you want to g0. Now, that doesn’t mean your roadmap doesn’t change and you won’t take detours, but when you have a goal in mind and you’re held accountable, those are the components that will make a successful business.

Step #1: Define your vision and direction

The first step when building your team is going to be defining your vision and direction as a business. You need to define your strategy. If you haven’t spent the time to do this, please take some time to go through our 10-part introductory strategic planning series.

If you’re going to build a business and become a leader, you need a direction, otherwise, you’re getting ready to lead a team out to no man’s land. You need to define a clear vision of who you are, and establish core values and your mission. Then, you can find a team who aligns with you. By clearly defining those aspects of your business and hiring and leading with those top of mind, you will be much more aligned when they have to make decisions on their own. There will be times you’re going to have to let them take the wheel. But if you don’t have any direction, and you don’t know where you’re going, and you’re not really clear on how you’re going to do it, how do you tell them what to do and where to go? So it’s really important for them to be very streamlined, and on board, with who you are as a business. If you would like more information about finding your why, Katina and I discuss that in episode #12: What’s Your Why. In addition, episode #01: Vision & Long-Term Goals, episode #02: Goals for the Next 12 Months, and episode #03: Goals for the Next Quarter, talk about setting up your vision and goals for your company, and then breaking that down into actionable steps.

Establishing your goals is a really important aspect of having that strategy together. Because if you don’t have clear goals, and you’re just hiring people because you feel busy and you want to offload work, you have no real sense of if that’s helping you get closer to reaching the goals that you have as a part of your strategy, which is really important in the overall picture of your business. Having clear direction allows you to ask the questions like, “Is hiring this person really helping me advance my business?”

If something is broken or you haven’t invested the time necessary to lay these foundational steps, your company will lack the direction you need to make the big changes you dream of and desire. It’s important to take care of your team. When you give people purpose for work, and they feel ownership in the process, there’s a different outcome. So taking that time to really make sure to hire that person who is aligned with who you are as a business and where you want to go is so important. You don’t want to get so sick and tired of doing the work, you just need somebody to take it off your plate. The last thing you want to do is give it to somebody, who may be unqualified, doesn’t understand, or has no idea what they’re doing. Those are not the people you want to just offload to, because a lot of times that’ll create more work than what you initially had in the first place anyway.

It’s important to note, we know it’s not a perfect world, but it’s about taking the right steps. It’s not about finding perfect people, it’s finding people who get it, want it and have the capacity to do it. This is less about perfection and more about finding a great match in someone who is going to grow with you.

Step #2: Establish triggers that signal when it’s time to build your team

Triggers can be extremely helpful when it comes to managing your team and relating it back to growth trends and goals. When we talk about triggers, we are talking about establishing thresholds that you reach, or signs, that you need to bring somebody on to your team or expand out your team. Obviously, those are going to change with each individual business, but we are going to walk through some helpful guidelines to help you as you try to navigate or set up triggers for your own business.

Revenue. One type of trigger could be focused on revenue. For instance, most companies have a need for sales people. Depending on your product or service, one salesperson may not be able to handle $2 million of revenue. It can be helpful to establish a threshold or range in which a salesperson can be expected to operate. Maybe you expect $500k per sales person, annually. Then you know how many additional sales people you need in order to reach a new sales goal.

Number of Clients. Another trigger could be the number of clients. And this could vary depending on the size of the client as well. How much time would you need for a client that does $5,000 of annual revenue, versus a client that does $50,000 of annual revenue? So then you can set thresholds like 3 clients of this size per salesperson or per professional. This trigger again can help you in estimating your needs when you’re looking to grow and setting goals.

Why establish triggers? Essentially, you’re establishing these triggers so you can understand when you could expect to have to build your team. For example, every time I’m hitting a $60,000 threshold in my revenue, I need another person. You can also set goals for your team as well, based on these triggers. You can be transparent with these to help everyone understand and have clarity. Both you and your team are working toward a common goal, knowing the expectations of both parties.

How do I do this? You may be asking, well how do I develop these triggers? This is when it’s critical to have an advisory team who can help you develop and set triggers. You need to be involved as the owner as well to really develop your strategy based on what’s best for your company and what’s giving you the most value.

We have discussed budgeting in other episodes as well, but another good measure is to set up your budget or forecasting for the year and determine what costs are associated with that additional revenue. That could be in people or they could be hard costs, but it will allow you to get a better big picture of how that growth will impact your company as a whole. It will allow you to truly see what the possibilities are. A book that we’ve talked about is The Art of Possibility, in episode #13 What’s the One Thing We Wish More Business Owners Knew. By hashing out these thresholds and other numbers, we can allow ourselves to dream a bit as business owners with the facts laid out in front of us.

Step #3: Figure out where you’ll find your team

Because of the rapid change we see in the world and different platforms, this is constantly evolving and depends on the industry you’re in. The most success we have seen is when people find us. This is where your website, social media and story come into focus. It is important to communicate your why, values and mission effectively so you attract the right type of people who are aligned with your beliefs and direction as a company.

There are a multitude of job boards available to post job openings:

You also need to make sure you know what you need. Is this position seasonal? Full-time? Are you looking for an employee or independent contractor? We break down the differences between employees vs. independent contractors in more detail in episode #06: Strategic Planning – Digging Deeper – HR Plan.

Step #4: What is the scope of work being performed?

Next, it’s very important to understand the scope of work that you want to be performed. In addition, making sure that the person you hire is able to do that for you has the capacity and background to complete what needs to be done.

When we talk about capacity here, this spans capacity in experience, education, time commitment, etc. Sometimes we think of capacity in a limited extent but it really encompasses more. You must understand what you really need as a company and in the role for which you’re hiring. Then you must understand the candidate’s capacity as a professional. You want to set people up to succeed, and sometimes there are certain aspects of the job that are more demanding than others. You want to understand that the capacity that they have as a professional aligns with, and complements, the needs you’ve established in this role.

Step #5: Understand it’s not always easy

Let’s be honest, people will disappoint you. There might be people you really thought were in it for the long haul with you that end up leaving. As a professional, the willingness to be agile and to flex when things don’t exactly go as planned will not only lend to more success in business but also less stress for you as an owner. Things happen, life changes, and circumstances change, but if you have that vision we discussed in Step #1, and you have that strategy, it will help you stay on track and keep the big picture in mind when you hit bumps in the road. Don’t expect that even if you do everything we said in this episode, that you will get the perfect person, because that person doesn’t exist. You’re not striving for perfection. You’re looking for a really great fit for your business.

Try to take what you can from the disappointments you face, and apply some type of learning or meaning from them if you can. Your goal is to refine your processes every time you go back to the drawing board and you need somebody else. As long as you take those challenges and move two steps forward, it’s alright to take a step back every once in a while. So stay encouraged. You’re fine, chin up, things happen. People will disappoint you, but stay clear on what you want, and what you can do.

You have to know how to persevere. Part of our genetic makeup as entrepreneurs is to push through and to find a solution. It is never the easiest course ever, but there’s something about victory on the other side of that struggle that you can’t get in corporate America.

Step #6: Focus on the positive impact and exciting growth that new team members bring

Building your team should be an exciting and celebratory time in your business and your life. This is a huge accomplishment that you should be very proud of reaching. We’ve talked about the ripple effects of business ownership in other episodes before but want to bring that back to the forefront during this discussion. You will have effects on your team’s lives, and the people that are coming in contact with them. You’ll never know just how far reaching your impact may be, which is so rewarding. The fact that we’re constantly improving the waves of society, and that the waves that we’re making are positive ones, is so impactful and can help push us forward even when the going gets tough. So stay the course, and stay encouraged, press on and stay clear.

Conclusion

Growth and profitability can accelerate or be limited by the ability to expand your team. That’s why in this episode, we are discussing the foundation you need before building or expanding your team. Despite what you may think about CPAs, we’re not JUST number geeks. We get firsthand experience with business owners from a variety of industries and sizes to understand how their teams make them and break them.

The book Traction, by Gino Wickman focuses on the traction that you get as business owners, and what you need to really define who you are. One of the aspects of defining your business is the people component.

The first step in laying the foundation to build a team is to define your vision and direction. You have to get crystal clear on your mission and values as a firm, so you can give clear direction to your team and so you are able to attract the right type of people who are heading in the same direction and believe the same things.

The second suggestion we make is to establish triggers that will signal when it’s time to build your team. Those can be based on revenue or number of clients, but this will assist you in planning as well as goal setting.

Next, you want to determine where you’ll find your team. Ideally, you will attract enough candidates who want to work with your company based on word of mouth referrals and the story your company tells through your communication, but if you do end up having to advertise, there are plenty of popular job boards you can try.

In our fourth suggestion, we recommend defining the scope of work that needs to be performed. In addition, you want to make sure you’re setting your team up for success. Aligning their capacity with your needs as a company is crucial.

Next, we address the fact that building a team is not always easy. People will disappoint you and you will have challenges, but the point is that you take those challenges as learning opportunities and continually improve your processes.

Lastly, we want to focus on how exciting it is to be able to build your team. The impact you can have on the world is so much greater. You will have effects on your team’s lives, and the people that are coming in contact with them. You’ll never know just how far reaching your impact may be, which is so rewarding.