Taking over my family cleaning company and I want us to hire one person more than we need, vs the bare minimum # of people. I also want to pay them 18 instead of the 17 we currently do.
This will result in at least 1 but maybe 3 months where my family barely makes any profit, but I argue if they and we just tighten up the hatches for that small period of time, use our comfortably sized nest egg, then we can have a team thats stable for more than 3 months at a time AND we can finally grow by being able to aggressively pursue new clients
My family’s very against this and thinks I’m a naive socialist, basically. I’m a little out of arguments
Socialism is when you hire people and exploit their labor for profit.
A mentor told me you should always have an extra person on staff, as it will ensure you are motivated to sell. If you have exactly the right amount of staff, you won’t be as motivated to grow since you would be out of capacity.
I’m sure that doesn’t fit every situation, but I thought it was interesting.
How long does it typically take you to get a new person online and profitable?
Can you use any forecasting to prove you will need the extra body within the time needed to make them profitable? (In my world it takes at least 6 months for an employee to be producing results so we are looking at what we might need mid next year and planning our hiring for that now).
What does the 18 vs 17 do for the business? Do you get better hires or is it the same hire earning more? How does this compare to the rest of your staff’s income? Are there any headaches you can cause by bringing this person on for a different wage?
What’s your staff utilization like right now? Can you bridge that gap between now and 3 months with overtime? Does your staff like it when they get overtime or no? (Mine doesn’t so work backlogs until hiring evens things out).
Does bringing them on early free up a higher value resource? Ie can your sales person spend less time on operations and more on growing the business if you bring a new employee on? And just important- will they?
How comfortable are you with laying someone off if the market changes and you don’t need them in 3-months?
Have you thought of hiring a new person and allowing people to go part time or reduced hours in winter, as well as identifying winter as the time to take time off? Depending on how you do it you can get better efficiency and you might find your employees appreciate the flexibility.
Lots of good suggestions. Maybe you can hire the extra person first and see if that pans out. If it doesn’t then you’ll have to lay them off or just not rehire if they leave at the end of the following year. Small risk for moderate gain
I know too many business people like this, small minded, myopic, and nickel and diming stuff but losing out or dollars. Zoom out and get creative - find someone thats down to do the work and also open to doing some outside sales for commission. Then during those 3 months they can be getting new clients instead of sitting there. Boom, you solve both problems.
Before hiring another person why not find some work for your team to get through the slow time and not lose all of your employees?
Then what you are saying would be step 2.
How in the world is wanting to expand ones business a socialist endeavor, wtf?
You can’t retain people because it’s a shit job.