How to Build the Right Small Business Team

Line up of diverse people. Represents building the right team for your business.
Kody Wirth

Kody Wirth

Kody Wirth

10 min. read

Updated April 11, 2024

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Can you afford to bring on new employees? What roles will lead to the most significant growth? How do you navigate the hiring process?

These are critical questions you must answer when building your team. 

This guide will help you answer those questions and think beyond hiring—so you can retain and grow the capabilities of your team.

1. Determine if it’s the right time to hire employees

Here are four signs you need to hire employees.

  • You turn down work: If you’re declining projects due to a lack of time, it’s a sign that you need more hands on deck to capture all available revenue.
  • You can’t pursue new revenue: You’ve discovered new revenue opportunities but lack the necessary skills to capitalize on them. Hiring the right employee could make it possible.
  • Decline in customer satisfaction: If customers complain about your work’s quality or timeliness, you may be stretching yourself too thin. Hiring additional staff, even for administrative tasks, can help you focus on delivering quality service to clients.
  • You have steady revenue: You’ve reached the point where your business has consistent revenue and can cover a new employee’s salary.

Weigh your options carefully when hiring. If unsure, you can start small with a part-time employee to assess the needed help and how a new employee will fit into your business. 

Hiring is a significant step; you must be honest about your business’s needs and capabilities.

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2. Define the roles you need

Here are some key considerations to help you define the roles you need and decide who to hire first:

  • Identify immediate needs: Consider the tasks essential to business operations that are currently neglected or not performed optimally.
  • Prioritize: Rank your needs based on potential business impact. Will it increase revenue, improve customer satisfaction, or reduce your workload? 

For example, if customer service complaints and cancellations are increasing, hiring a customer service representative may improve retention.

  • Create a personnel plan: Forecast employee costs, including salary, benefits, taxes, and any additional training or equipment needed. Consider the expected return on investment (ROI) by evaluating how the new hire will contribute to your business.
  • Consider your budget: Determine if you have the financial capacity to cover the costs of hiring new employees. A financial forecast can help here.    

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3. Select employee benefits

A comprehensive compensation package, including competitive pay and meaningful benefits, is critical for attracting and retaining top talent. 

When selecting benefits, you need to understand:

  • How they impact your personnel costs
  • What your competitors offer
  • What benefits your employees want

The benefits you offer should be competitive and fit the expectations of your employees. The potential financial return from hiring a given employee should also offset the cost. 

Do your research and explore what benefits are necessary for your business. You may find less costly options are far more valuable to your employees.

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4. Be thorough and particular when hiring

You must be careful and thorough when selecting candidates to interview and ultimately hire. Here are a few ways to improve your chances of choosing the best candidates.

  • Expand your hiring advertising: Utilize multiple platforms such as job boards, social media, and your company website to reach a broader audience and attract a diverse pool of candidates.
  • Screen every applicant: Review each application thoroughly to select candidates with the required skills, show growth potential, and align with your company culture.
  • Dig deep during interviews: Prepare a list of questions for the interview that assess the candidate’s skills, experience, and fit for your company. Consider conducting multiple rounds of interviews with different team members to get a well-rounded perspective.
  • Follow up with contacts: Verify the qualifications and work ethic of the candidate by contacting their previous employers or other references.
  • Consider a trial period: Offer a temporary or probationary period to assess the candidate’s performance and fit for your company before making a long-term commitment.

Remember, hiring employees who will help your business grow is the goal. Being thorough and particular during the hiring process will increase your chances of finding the right fit.

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5. Explain your vision and purpose

You need employees to be invested in your business. To feel like they are making an impact in their role. To make this connection, you need a mission statement that clearly explains the purpose of your business. 

Your mission should be present in every other business goal or vision-setting aspect. How you talk about culture, your customers, and growth plans—should all reinforce how you and your employees will pursue this more significant purpose.

Be consistent and keep these ideas front and center. The more the mission is supported and represented in day-to-day aspects of your business, the more likely employees will connect with it.

Dig Deeper: Why you should focus on more than making money

6. Set performance goals

Think of your mission as the shared goal for your team. You must break this goal down for each employee to make it attainable. These individual goals should support the broader business goal and lead to personal growth.

When setting these goals, use the SMART framework (Strategic, Measurable, Achievable, Realistic, Timely). Be sure the employee understands exactly how their work contributes to company success, and set up regular reviews to provide feedback.

Ensure you have a system in place to measure and report on performance. While these metrics will likely be specific to their role, you should explore how to connect them to revenue at some point. You should be looking to grow; if the work isn’t impacting the bottom line, it may not be all that important.

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7. Foster a healthy work culture 

Don’t establish your company culture as you run your business. You should have the environment, values, attitudes, and practices you want your business and employees to represent. Without any sense of your culture, you’ll struggle to establish a vision, hire, and set goals. 

But that doesn’t mean your culture shouldn’t evolve.

No company is perfect. The environment, desires, and interactions will change as you add more employees. You need to clearly state what your expectations are and be willing to listen to your employees’ concerns and ideas.

Try to foster open communication and establish a structure for feedback that makes it easy for employees to voice their needs. The more you include them in the process, the more likely your business culture will thrive.

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Plan for the right team

You should plan for what roles you need on your team long before hiring. By knowing what gaps you need to fill and how much you’re willing to pay for those skill sets—you’ll be prepared to build your team at the right time.

To help you document current employees and planned hires, check out the company overview section of our business planning guide. You can also learn to forecast personnel costs as part of a larger financial plan. 

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Content Author: Kody Wirth

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.