Recently I spoke with a client of mine and while he was talking about his own business the message rang true to me as he said something along the lines of he’ll never get rich trading his time for money as there’s only so much time in the day and he can only dedicate x amount of time to each of his clients even if he continues to raise his pricing model up. Now I understand that’s a very basic concept of business/finance but up until this point, I feel like I almost forgot to think about that while I’ve been busy trying to grow my own business.
I mean currently, I manage a handful of clients including him where I do SEO for them on a month-to-month basis and things feel very manageable now where I’m comfortable bringing on new clients and feel I can dedicate the appropriate amount of time to each one of them but I’ve started to ask myself at what point would I actually be able to hire an employee to help me out? Is it at a certain number of clients or maybe a certain amount of revenue/profit? and then I have to be able to afford salary, benefits, etc… because I don’t want to be a terrible employer when and if that time does ever comes around. So I guess what I’m asking is when should I be looking to hire?
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Hey there, I would recommend you hire freelancers at first. They should specialize in exactly what you need so you don’t have to train them. And you only need to hire them on a per job basis and not have to worry about employee headaches.
Market until you absolutely can’t keep up with all the work. At that point, hire someone to do what you’re worst at and they’re great at. Rinse and repeat.
You could also hire a virtual assistant. They’re freelance and don’t require benefits. You can use as many or as few hours as you need to take over those pesky tasks that take away from the parts of your business that only you can do. They can give you your time back!
You should honestly be looking to hire someone as soon as you can consistently afford too. Depending on what field you are in there are about 2-5 specific tasks that you do that bring in the vast majority of your revenue and everything else in your business is built around supporting the critical tasks.
The best thing you can do is quickly create a set of repeatable steps for every task that is not critical to making money and then hire someone else to do them while you focus on the important things. Others are right about finding a VA and having a clear system in place will make it easy to train them and give you good metrics to evaluate if they are doing the job properly.
I highly recommend reading the e-myth revisited, if you haven’t already, as it explains everything in better detail.
The key issue is that can you find an employee that will produce more value than what you are paying the employee and the time you spend teaching and guiding the employee (employee may leave after getting trained). Besides simple economics, there are several risks with adding people than yourself: (1) if interfacing with clients, they may offend your client, (2) they may leave you and take your clients with them, (3) steal from you, and (4) get you into lawsuits. If you can isolate portion of work for a suitable person and prepared for the risks, then try it.
You should hire as early and often as possible for the thing you’re most needing and worst at
when you have enough revenue to pay for one and when doing it all by yourself is getting too much
Bring on an employee when the time you save by offloading tasks to that person can be used to generate revenue in excess of the costs associated with that employee.
Example: You spend 10 hours per week doing administrative tasks for your business and 30 hours per week prospecting, selling, and servicing accounts. You can pay someone $20/ hr to take over those administrative tasks, which gives you an additional 10 hours to prospect and sell. With that 10 hours, you generate one additional $1000 sale each week. You just added $40k in annual profit while working the same number of hours.
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