“When is the best time to make your first hire? When you’ve got so much work that you’re up to your eye balls.”
Show Segments:
That First Hire Can Make or Break You
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Summary
Hiring the first person to help you expand your business is difficult. It is expensive and the wrong person can drain critical resources. This show covers hard lessons learned like knowing who to hire, what to pay them, how to limit your potential losses and how to structure the deal.
Transcript
Betsy: Renee, in your experience when is the best time to make your first hire?
Renee: When you’ve got so much work that you’re up to your eye balls. That is the time to invest some hard earned money and hire the right person. The tough part is who is the right person?
Betsy: First you should decide if the person is a producer or if the person is going to support you and actually write out the responsibilities and the experience needed in that person.
Renee: It might be someone who can follow though or it might be someone who is strong on the outside as a sales person.
Betsy: So how do you know how much to pay somebody?
Renee: Before you bring someone in you want to think through “What is the job they are going to work on?” “How much can you bill for that?” You look at the salary you are going to pay that person and it should be a factor of three in terms of what you collect versus what you pay.
Betsy: Most people think they need a whole year’s salary in the bank before hiring someone but it is really not true.
Renee: The other thing we recommend is projects. Limit it. Let them know that this is just a two month or one month project they are going to be working on so they are striving to impress you and you are gauging how well they fit in with your values and your personal work style.
Betsy: You can always tell if that person is going to work out after three months so that is the investment you need to make. Bottom line you must hire other employees in order to grow your business. You simply can’t do it all yourself.