188 - When Should You Start Hiring Help And For What?
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In this video, I want to talk about my experience with hiring my first team members for my business. Before I was able to bring on additional help, I had to work extremely hard and make sure that I was financially set up for success. I knew I needed to have six months to a year's worth of salary saved up before hiring my team members. So I worked hard for eight months before I hired my first employee, who I paid a salary of $37,000 a year. Regardless of how much revenue was coming in, I made sure that he got paid. However, I didn't quite have a full year in the business and didn't fully understand the seasonality of the industry and how it slows down towards the end of the year. I made my first hire in August, and when the end of the year came around, we didn't have a lot of orders coming in. Luckily, I had that money set aside and was able to pay him as promised. This experience reinforced the importance of having money saved, especially for unforeseen things like business seasonality.
Scaling the business was always important to me, and I knew that the revenue I was able to generate would be what fueled business growth. I kept my cost of living very low for the first four to five years and used the majority of our business revenue to grow. I didn't go out and buy a big fancy house or a new car. Instead, I was focused on working hard and saving as much money as possible.
When it came to hiring my first team member, I looked for someone who could fill the role that I preferred not to do. It's important to know your strengths and weaknesses and know what you like and don't like to do. If you really enjoy talking to customers but not so much shooting homes, it's probably a good idea to hire somebody that can shoot homes. While you can stay focused on responding to customers and building relationships. I personally enjoyed all aspects of the business, so I trained my first hire to do everything. We were both Swiss Army knives for the business and could pretty much take on any customer request.
The amount of money you should pay for your first hire will depend on how much revenue you're bringing in and their specific role. This is why it's important to make sure that you're pricing your products appropriately to support additional team members. The contractor model is also something you may want to consider. Contractors can help, but they may not be as committed to your company as an employee would be. You usually pay them more, but it is something to consider as you only pay them for the jobs that they do. This is what we do in all our markets outside of Arizona and Nevada. We hire contractors since daily workloads can fluctuate quite a bit.
In conclusion, hiring your first team member can be a daunting task, but it's important to focus on the financial aspect and ensure that you have enough money saved up before hiring them. Look for someone who can fill the role that you prefer not to do and make sure to pay them appropriately. Scaling your business can be difficult, but with the right team members and pricing strategies, it's definitely achievable.
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