If you’re like me, I guarantee you’ve read in at least one book that you have to take on employees in order to scale.
Now, at a certain level, that becomes true. But I can practically guarantee that this level is a lot further off than you think. Additionally, there’s one thing in particular that you should be focusing on instead of hiring—something that will make you WAY more money in the long term (and the short term too).
About a year ago, I hired my first employee for my freelance web design practice. And believe me, the guy was awesome. But I had absolutely no business hiring him. The business just wasn’t ready. We had an offer that only half-worked, a book of business that could barely support a new employee, and no recurring revenue to speak of.
All of these things were because of my shortcomings as a “business owner,” and I was only able to keep him on for a few months before the operating account ran dry and I had to let him go. Not only was it completely unfair to my employee for me to put him in a position where success was basically impossible… but it was also completely unnecessary for me to achieve the goals I had at the time.
Think of it—what’s the point of hiring?
To replicate yourself and amplify your output.
Think of your business as a simple math formula.
Your productivity as the business owner is the multiplicand, and the productivity of your employees is the multiplier. The resulting output is the product.
If you’re at a 10/10 for output and hire a team, even if they’re only 50% as effective as you, the product will be substantially higher.
But if you’re only at a 3/10 for output, hiring an employee will make little to no difference, and you should focus on increasing your base productivity instead.
How can you increase your base productivity?
There are three primary levers for increasing your productivity and amplifying the ability of future employees to add to it:
Marketing systems, sales systems, and fulfillment systems.
Marketing and sales systems are immense topics of their own, and are the first keys to the puzzle. 80% of it comes down to having a great offer and an audience that wants it (read this article for more on that).
But the final lever is the most relevant for this letter, because it’s the one that most often requires additional hands on deck to amplify.
Sales and marketing are considerably easier to amplify. There are dozens of ways to outsource sales tasks without hiring full-time employees—virtual assistants and call centers being two of the more common options. Marketing is the easiest of all, since all you need to do is throw more money at your ad budgets (again, assuming you have a winning campaign).
But fulfillment is more of a challenge, particularly with service-based businesses. And it’s where your business lives or dies.
If you can get clients but your garbage fulfillment process prevents you from keeping them, you’ll find your market disappearing once the word gets out.
If you can get clients and fulfill their orders well, but it takes you WAY too long or costs WAY too much money to do it, you won’t have the time to take on more clients or the margins to hire help.
This is where systems come into play
I’ve met so many freelancers and small agencies who are so good at fulfilling their service that they can basically do it in their sleep… but are at the same time completely unable to train others to do it for them.
I don’t care how well you know your craft—you will benefit by going through it and breaking each component of your fulfillment process down into discrete, recognizable segments and creating SOPs for each one of them. Even if you don’t ever hire employees, this will make your job easier.
I’ve been building websites for 8 years, and I still occasionally come up on a stumbling block that leaves me staring at my computer for 15 minutes or more, wondering what to do next. Having my systems in place makes it so much easier for me to avoid this, because I always know what the next objective is. It’s significantly easier to plan a side route past a roadblock when you know where the road is leading.
Additionally, that’s why I have been able to hire out design and development work when the workload gets to high. Because I have systems in place and can effectively train and coach people with minimal experience to get passable work done.
Conversely, part of the reason my sales employee couldn’t make it work was because I didn’t have very many sales and marketing systems in place. I didn’t have scripts prepared, I didn’t have a training manual with possible objections and their responses—nothing.
Don’t assume that hiring someone—regardless of how skilled they are or what results they’ve gotten for other companies—will be a cureall for your business’s shortcomings. If you aren’t able to succeed with the systems you have in place, what in God’s name makes you think that someone else will be able to?
Get your house in order before you invite other people into it. If you’re thinking of hiring for fulfillment, make sure you have systems and SOPs in place that detail every part of your fulfillment process. If you’re hiring for sales, make sure you’re able to sell or market your offer yourself. If you know your offer is solid but you’re truly unable to sell or market it yourself, at least hire an agency before you hire an in-house team that will depend directly on you for their paycheck.
Do these things, and if you’re like me, you’ll probably find that you can accomplish all of your goals (and then some) without even having to hire anyone. A one-person business operating at peak efficiency can generate mid-6 figures a year, even low-7.