You know your business plan is working when revenues steadily increase. But unless you also have a game plan to scale your business, either profits or your sanity will eventually take a hit.
Chris Clegg, owner and senior research manager at PortMA, a marketing analytics firm, recently shared how he’s been able to grow upward and outward with help from a team of freelancers.
When Chris first started PortMA in 2010, he was a one-man company. Since then, his business has grown dramatically: he now employs six full-time employees and four regular contractors.
The path to growth started as Chris began to drum up analyst work through online portals such as oDesk. “I first discovered oDesk when I began looking for contracts for myself. After starting my firm, I worked hard in order to get leads. As I gained clients, my business began to grow.”
Scale successfully by managing capacity
As work increased, so did Chris’s need for help. “I knew the marketing industry well, but sales was a challenge. For me, building the right team was a critical part of growing the business.”
But growth wasn’t always consistent, and for Chris, this caused a dilemma. Making a new full-time hire to handle increased workload was fraught with pitfalls. Sometimes the increased workload was just a temporary spike and within weeks, the new hire wouldn’t be needed anymore.
“Billable hours are my inventory. And this inventory expires instantly. I’m trading time for dollars and that time expires right away. As soon as I hire someone, I now have 40 hours a week that I’m paying for and am not necessarily making money on. Managing capacity is a constant challenge.”
Chris’s solution? Engage freelancers to ease the process of scaling. “We bring in contractors that can help pick up the extra hours of work. When we have sufficient, consistent work, we can then swap out those contractor hours in order to hire a full-time employee. Freelancers are our insurance policy to make sure we do it right without having to lay people off because we hired too aggressively. They’re our safety net.”
How to approach hiring remotely
Since he was working remotely himself, Chris felt comfortable building his team online. Even so, he soon discovered that the real challenge was not with the hiring process itself but with his own perceptions.
“The biggest learning curve to overcome was how I thought about working with an online worker versus working with someone in person. My perception of working with an online freelancer was that I could just throw money at any hire and expect to get a great product automatically.”
However, Chris quickly discovered that that approach didn’t work. “I first started to look at the interview process more seriously. I stopped interviewing just three to four people for a position and hiring the person that was cheapest. Instead, I began interviewing up to 15 people. Then I would test them and be very, very cautious about the whole process.”
He also began paying attention to a freelancer’s past projects. “I learned to focus on those who have an established work history. If they’ve worked for a long time at a good rate, that’s a promising sign. I’d rather let other employers take care of the vetting process.
“I also learned that I can’t expect to pay an online freelancer less than an on-site employee,” he added. “A good freelancer knows what they’re worth and at times, they might even be more expensive because they need to make up the cost of working solo, such as covering their own benefits, workstations, etc.”
This new approach to hiring paid off quickly. “I began to hire great people, people that became the backbone of my company. The key was that I had to build the job descriptions and take the time for the interview and testing process — I had to do it right.”
Even with a virtual team, training and team culture matter
With both employees and freelancers joining the PortMA team, Chris invested time to develop an onboarding processes. “We need to get new hires into our fold. We have an orientation guide as well as training materials to help them understand who we are and what we do. It was an investment to build these processes so we could effectively use online contractors.”
Part of that process has also been developing a workflow that effectively incorporates both in-office and remote staff. “Having these things in place was a part of preparing to scale. We use Google Apps, so we give them access to our shared calendar system. We also share a Dropbox directory with them for file sharing and bring them into Basecamp as contractors so they can see the projects we are working on and where they plug in with the milestones and delivery schedule.”
Scaling can be a risky process for any startup. But as PortMA found, by hiring strategically online and creating a workflow that incorporates team members from wherever they work, the whole process can go much more smoothly. As Chris noted, “These investments have been pivotal to our growth.”
As your business has grown, how have your hiring practices changed? Share your thoughts, tips and questions in the comments section below.