Head count planning for a growing start up - any processes, books, templates?

I would put it as a ratio of the effort you expect to get:

• Each department has a volume of work they can reasonably do.
• What is the expected bounds of doubling your client base?
  • Is it all automated? In which case bring on more clients means buying 1 more server to do the processing.
  • do you have a ratio of 5 clients to 1 staff member
  • do you have a ratio of average cases per client per month VS average cases 1 person can close off per month.

Finding these metrics within your organisation for each department is key.

• Sales. Average number of proposals put forward per sales person per month/quarter. This is pretty easy to work forward how many sales poeple you need.
• Average conversion rate from proposal to Client.
• Given you have this many sales people, what do they need to have in order to support them. 1 Support staff per X proposals.
• Once you have a client what does it take to sign them up and get them going? For us it takes install/training about 2 weeks to bed a new site down. How many new sites per month do you need in your doubling? This will tell you how many new install/training people you need.
• Engineering. Normally we need to integrate product into the surrounding environment. This could take 1 to 2 weeks of effort on average per site. Thus you have a load on integration development.
• Forward development. Do you need to add more features. Will you be working with each new client to improve the product with their suggestions. You can get a feel for the cases here.
• Support. Your current client base generate X cases or phone calls per month now. You can expect the volume change to have more like an expodential effect rather than a liner one ... so you can plan the high and low volumes based on this.
• Management. The first few people are great, work hard and you know them personally, as you scale beyond 8 - 10 people you have less time to juggle it all ... your current staff should move up and have new people put in under them, these key people will now be less effective as part of their time will be spent holding the new peoples hands. I would run with a 1 in 5 or a 1 in 10 ratio to start with and adjust to your specific need.

Is this kind of what you were looking for. IF you can add in a bit more detail about your specific business model

• product or service
• Price range and revenue models
• Involvement level

Then we can start to understand more what your specific scalable metrics are going to be.

I know it may not exactly be the answer you are looking for, but one of the main things I have learned in 14 years in startups - planning headcount is like planning revenue - wasted effort.

I have been part of the fun of building 100+ person teams in less than 3 years. I know I get a certain "high" every time I get to bring on another great team member, but here are the realistic things to consider: 1. Your headcount will highly depend on every person you bring on. 2 people who work well together can often finish off work of 3. That is why I say first 20 employees will make or break your company. 2. You keep your pipeline of candidates full, but hiring plans lean. If you see folks running at 90% or so capacity (depending on your risk tolerance) - get more help. I personally don't like seeing 100% utilization and not having candidates in the final round. Overworked people create more mistakes that require more effort to clean up. 3. Eliminate BS tasks with fervor! Before anything new is assigned to someone, ask the question: "is there a particular activity this person is doing not worth the $ I am paying him/her". From what I have seen, 10%-20% of the day is often wasted on BS you could eliminate.

So here are just a few things for you to consider. Hiring in a startup is an art, not science.

Unfortunately I don't know of any simple ways. Like you mentioned I just do monthly projections and quarterly summaries. You just have to know what's an input and what's a result. With my business I have to go the other way, from how much I expect to hire to how much revenue that creates. There's not much more to it but you'll probably have a few more dependencies.

If there is a process, I would put it something like this - none of these are concrete facts so it's just a starting point for discussion:

1. Map out the causes (time/money invested) and effects (resources needed) in your business process
2. Plan what you expect to put in at the start, and the range of outcomes you could see at each following step
3. Identify the potential hiring needs and urgency for each department so you know what you're looking for and the priorities
4. Try to get more applicants than you expect to need, and keep them interested until you're ready to hire them
5. Identify signs that tell you to update the plans

Now to explain that: Like Apollo says, you need to be flexible. If you can, use contract/part-time work to get extra help and get to know people before you need them full-time (but find people who are actually good and have long-term potential so you can make them full-time later). Not being able to give firm commitments to everyone makes things more difficult but it also lets you prepare a lot further ahead.

Are the sales projections proven? Not just in the total revenue/customers but in when it will happen? If you're absolutely sure how much business you're going to get in the next quarter that's one thing, but if there's a range make sure you understand it and prepare for the full range of possibilities.

As a planning exercise, there are two things that stand out here:

• Each department may be different. For example if your support can't keep up to the new customers you could quickly lose them, but if development lags behind a bit you can probably catch up later with little disruption. On the other hand sales may be an area you only grow when you have the extra cash to invest in hiring salespeople.
• It sounds like this will be interconnected with most or all of your top priorities this year; reviewing the hiring plan quarterly may not be enough. Not that you need to do it every day either, but I would want to watch closely and if things have changed sufficiently, re-examine the assumptions and plans. When you're growing rapidly, planning doesn't have to happen on a fixed schedule.