There are times when you should consider expanding your payroll in anticipation of a growth spurt. This strategy can set you up for a dramatic upgrade of your staffing business.
But making this investment can come as a scary experience. How do you manage your staffing company when payroll is growing faster than the underlying business?
The situation should be temporary. After all, the purpose of the move is to jumpstart revenue growth by first enhancing your staffing levels. However, protecting your company against unexpected bumps in the road can be stressful.
Don’t start pulling out your hair just yet. There are steps you can take to mitigate the risks. Here are some tips to keep in mind.
3 Options For Staffing Firms With Fast-Growing Payrolls
Dip into Your Emergency Fund
Ideally, you’ll take advantage of good times to build up a financial cushion. These emergency funds can come in handy when an unexpected crisis emerges (as happened when COVID struck in 2020). They provide an excellent safety net for disasters.
However, these funds offer other uses as well. During times of growth, you can use your emergency fund to smooth out the bumps in your expansion. Dip into these resources to lower the stress of meeting regular commitments, like payroll.
Look for Productivity Improvements
You add workers to get your daily tasks done. But what if your daily tasks took less work to complete? Suddenly you don’t need to expand your payroll as quickly.
That’s the beauty of productivity improvements. You get more output with the same staffing levels. Here are a few avenues to explore as you try to boost capacity without increasing ongoing expenses:
- Add new technology: Giving your employees the right tools will help them work faster. Find the tech upgrades that will let you get the most out of your current staff.
- Improve processes: Streamline the procedures you use to operate your staffing agency. By skipping unnecessary steps, you’ll increase your overall capacity.
- Focus on high-margin activities: Sometimes you have to make hard choices. You can’t always expand on every front at once. Instead, target higher-margin activities to get the most out of your growth investment.
Consider Funding Options
You might not have an emergency fund. Or maybe you’ve already run it dry during an aggressive expansion. Or perhaps it just doesn’t have the resources you need for a particular moment.
In these cases, you should explore outside funding options. A loan or line of credit can help you meet your commitments.
Fast-growing companies can also take advantage of invoice factoring to even out their cash flow situation. In this technique, you use your pending invoices as collateral for a cash infusion, allowing you to make your necessary payments.
This lets you support a quickly growing payroll, even if, in the moment, you can’t quite keep up with the costs. In this way, factoring and other funding options become the bridge to a larger, self-supporting operation.
Need Funding To Support Payroll Demands? Frontline Funding Can Help!
Ready to explore your funding options? Frontline Funding can help. You’ll get the information you need to make the optimal decision for growing your business.
Contact Frontline today to start your next phase of growth.