TMBA 247: How Do You Know When It’s Time to Hire?

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TMBA 247: How Do You Know When It’s Time to Hire? post image

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We’re back this week, answering a bunch of listener questions about when it’s the right time to expand your business and hire some new employees. We’ll talk about why there’s no magic bullet for getting through the hiring process. It’s different for everyone, but there are ways to know when it’s time to step up and start bringing in some help.

Listen to this week’s show and learn:

  • Why patience is a virtue when starting a new business.
  • What percentage of your profitability you should be spending on staff.
  • How to use SOPs and SODs as a means of “shedding your skin”.
  • The two ways you can get out of the predicament of understaffing.
  • Some of our favorite entrepreneurial hot spots around the world today.

People on this episode:

Mentioned in the episode:

"Low Flying Airplane or Weird Roof?"

“Low Flying Airplane or Weird Roof?”

Listening options:

Thanks for listening to our show! We’ll be back next Thursday morning 8AM EST.

Cheers,

Dan & Ian

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Published on 06.05.14
  • http://www.adventurous-soul.com/ Shayna

    Super timely episode for me, as I’ve been debating this in my own biz (although it’s a completely different model than the one mentioned on the show).

    This ep actually reinforced my conviction that I don’t need to hire at the moment. I’m not losing money from not having help, nor do I have a solid 20 hrs of stuff that can be handed off yet. Will revisit the question in six months or so.

  • http://www.linchpin.net/ Damian Thompson

    Great episode guys.

    You guys “pulling numbers out of your ass” are as always pretty spot-on.

    v2 of Linchpin was 50% revenue to staff to deliver hourly work

    v3 is 30%-35% to COGS (any resource allocated to sales & service delivery) which should allow a truly scalable biz (layers of employees) and still achieve a Net Profit margin of 40%, super sexy for a “services biz”.

  • Maciej Godlewski

    Really enjoyed this episode. I’ve been talking to a few DCers who within the last month hired people to help with their business. So it seems that many of us are progressing from just hiring a VA for projects to full time employees. I hired 2 people this year full time and have been able to delegate more to them this year and do more strategic things for the business. Going to dig into your SOPs a bit more to make sure I’m leveraging them the best way possible. Thanks!

  • http://empireflippers.com/ Joseph Magnotti

    I think you should do a follow-up episode “How Do You Know When It’s Time to Fire?”. ;-) Many of us overlook that crucial part of the employer-employee relationship. Sometimes it is just time to move on.

    And yes, NYC chews people and spits them back to wherever they came from.

  • richardpatey

    Great episode guys, I really need to take on my first hire, just need the cashflow cushion first. Question about legal status of the hire. I have a UK company and would look to take on a UK member of staff first (remotely) but having an actual ’employee’ is a massive pain in terms of working out PAYE / tax / insurance and the fact that European law makes it hard to fire. Take it you guys would advocate giving that 20 hours to someone on a self-employed / contract basis? Cheers!

  • http://www.tropicalmba.com/ Dan Andrews

    great question Joe, I think we did one way back in the day but probably time for a re-set. Nice to hear a real New Yorker corroborate with bossman :)

  • http://www.tropicalmba.com/ Dan Andrews

    I would absolutely! You can frame the legal and relationship elements differently, of course as long as your contractor sees benefit in that for them.

  • http://www.tropicalmba.com/ Dan Andrews

    Congrats on stepping up Maciej!!! It’s good to see DCers steaming along this path, I see it as a truly sustainable way to do business.

  • http://www.tropicalmba.com/ Dan Andrews

    very good to see your numbers in line with what we were thinking. this stuff is an art, really fascinates me how to construct this stuff from the ground up. “spreadsheet warriorship” is still important but no substitute to getting out there and getting banged up. Nice interview on Matt’s show last week!!!!

  • http://www.tropicalmba.com/ Dan Andrews

    it’s a fun process, i would be like Sherlock Holmes trying to track down those profitable 20 hours!!!! I think it’s because I don’t have many hard skills that over the years I’ve relied on repeating chains of actions (processes) and defining them in order to build businesses.

  • http://www.linchpin.net/ Damian Thompson

    Thanks Boss, from spreadsheets to the streets son!

  • http://firedupdigital.com/ Maciej Godlewski

    Thanks, Dan. Got to keep evolving or actually get a job. Now that’s a scary thought. I recommended this post on a mastermind this week. Thanks for putting it together.

  • Wave Tribe

    Dudes. New listener, you mentioned a link to the SOP doc put don’t see it . . . pls send. FYI lived in Bali . . . go surf!

  • http://www.tropicalmba.com/ Dan Andrews
  • Wave Tribe

    thanks Dan, much appreciated!

  • http://www.LimitlessMindset.com/ Jonathan Roseland

    Who would like to see your the TropicalMBA’s blog marketing plan? Me! Me! Me!

  • http://www.tropicalmba.com/ Dan Andrews

    haha something like “shut up and write”

    we don’t do anything after we post stuff except tweet it and put it on facebook

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