Your First Hire
Hiring your first person is scary.
How will I bring in enough money to pay for them?
What if I have a lapse in contracts? How will I cover their salary?
What work would I give them? I like having my hands in all aspects of my projects.
Do I have to supervise? How does one actually manage?
What if they do something dumb and wreck my business?
It’s going to take me forever to train them and I don’t have that spare time.
What if I become reliant on them and they leave?
Then these worries link hands and dance in a circle in your brain and you push off hiring yet again.
At this point in my career, I’ve gone through seasons of hiring a bunch of staff and times when I scale back drastically.
Throughout, Komani Lundquist Cedano has been my go-to resource for growing and shrinking your team with ethics and heart. She’s a co-owner at Via Evaluation and has largely been responsible for Human Resources including hiring and managing staff. Like, the things that scare most of us about hiring and managing? That’s her full-time job.
Let’s pick her brain, shall we?
When to Hire
Stephanie: Most solo practitioners who eventually hire someone will say that they wish they’d done it sooner. So what kind of metrics should we be looking at to help us determine when to hire someone?
Komani: I suggest using an Eisenhower matrix. Draw a simple 4-cell table and fill it with the following:
1. what you’re good at
2. what you’re not good at
3. what you enjoy doing
4. what you don’t enjoy doing
Use this Eisenhower matrix to determine how much is in the ‘not good at’ or ‘don’t like’ – these items are the things to delegate.
Then, create an estimated employee budget (total estimated cost) of an employee to do the job you believe will best aid you in your growing business. Knowing this estimated total cost helps you set a baseline for the revenue you need to bring in to support them.
This cost should include expenses like their salary, benefits, and equipment, but also factor in the time spent managing them (instead of doing project work yourself) and related administrative costs. An old framework I heard about 15 years ago was $125k of revenue per employee. I suggest using a minimum revenue target of 2x their base salary or 1.5x their total estimated cost.
Then, determine a future revenue projection. You should know what you made in the past year, which can serve as your baseline, and then write up a list of what you currently have or expect to have in revenue for the coming year. This analysis will give you the information needed to determine if your revenue will cover both you and your new staff member.
Also, make sure you’ve exhausted outsourcing your other resources, such as your professional bench of an accountant or bookkeeper, lawyer, business coach, and financial advisor. Ensure you’ve maxed out the capacity of folks you’ve contracted to support your work.
Employee or Contractor?
Stephanie: I’ve only ever worked with contractors to fulfill the various roles in my company. When do you advise taking on employees versus working with a bench of contractors?
Komani: Taking on employees, versus contractors, should be a strategic, practical, or ethical decision.
Strategic: If you’re planning on having more than one employee (eventually). The return on investment is there to build the systems employees require. Or, based on your Eisenhower Matrix, you see that there’s a clear, full-time role you need to have someone else do.
Practical: You’re swamped and cannot complete work, or are already effectively using a single subcontractor nearly full-time. This is a clear indicator that they really should be an employee.
Depending on which US state you are in, you may be required to make this person a W-2 employee. This might also apply to having an intern that you realize you want to keep.
Ethical: You care about equity and see that employing folks and providing them access to a place to do work (an office), health insurance, paid time off, and other benefits is actually about equity. Not everyone can/is able/has access to be able to set up their own business/work from their house/pay for their own health insurance/manage the wild world of taxes/negotiate contracts.
Employers are required to provide many things for your employees, where contractors are really on their own. Second to this, it’s an ethical concern to ensure you can keep your promises to your clients – be reliable – even if an emergency arises.
When to Hire a People Manager
Stephanie: Say you’re one of those entrepreneurs that loves to do the actual work and, while you want assistance via contractors or employees, you don’t want your role to shift entirely to managing them. At what point do you need to hire someone to manage your employees? It seems like this type of hire would be a big step in organizational complexity.
Komani: Ultimately, knowing your own highest and best use (as a visionary? meeting with clients? writing reports?) is key. Recognize that you can choose what that is as you grow in your business. Your role in your organization will shift if you intend to bring employees in, and getting a manager will help, but won’t take away the burden.
When you make your first hires, seek folks who are great at taking high-level direction and can run with your ideas and plans. As your organization grows, you’ll find the need to bring in people with a greater variety of skill sets and increased specialization. You will need more guidance and structure for them, which is something a manager can help with.
Often, organizations get (or promote someone to) a middle-type manager after the first three employees. Someone who enjoys creating systems and processes and ensuring quality work products.
Three employees isn’t a hard and fast rule, but it’s often when I see small business owners struggling – keeping up with project oversight, business development, administration, and management of employees. This seems to be a challenge spot and time for a greater strategic move, which could be the hire of a manager.
It’s a big step in organizational complexity, and I suggest each entrepreneur know and be able to share what their organization’s overarching strategy (short and long term goals) and values are to help guide a manager.
With these elements in place, and a good deal of trust, and an ability to let go, someone else can help create a great structure for your growing team.
Reader, Stephanie is back. Isn’t it so helpful to get this kind of insight? Good news: Komani teaches an entire guest lesson on hiring and managing staff inside my Boost & Bloom course.
Even with Komani’s guidance, it’s still gonna be a bit scary to grow. It’ll be so much easier if you can run your thoughts and plans by a group of fellow founders. We’ve got your back.
Entrepreneurial Seasoning
When I taught a free class on making more inclusive data visualization, I got a TON of responses that fell into one of three buckets:
- This class was AWESOME!
- I missed the class, where is the recording?
- This class was terrible, you were wrong on all these points, being exclusive with these suggestions, and neglected to mention these ideas.
It’s how I respond to the third bucket of comments that let’s me know what season I’m in with my business.
Expand or Contract Audience Season
My response, at that point in time, to the five paragraph paper of an email with bolded headings and numbered lists detailing my misgivings… was a chuckle. It’s nice that people are so passionate about such an important topic, I thought to myself.
I was in a season of wanting to expand my audience by offering new content, pushing people’s thinking, and getting comfortable being a lil controversial.
Without a doubt in my mind, I have also offered new, lightly controversial content in the past, where I got responses in all 3 buckets and my reaction to bucket 3 was fuck this shit.
I had been putting myself out there when I was in a contracting season. Good intentions, wrong timing for my spirit. All I wanted to do was scream I’m trying my best and If you don’t like it, go elsewhere – this was a FREE class.
That’s vastly different than a chuckle.
As important as it is to show up in the world with consistency, I’ve learned that I also have to watch out for changes in my seasons. Heck, I had to learn that I actually have seasons.
We all do.
Audience growth seasons are one version, but we go through others, too.
Expand or Contract Staff Season
When my staff finish a workshop and get an email like “It was truly one of the best and most practical training courses I’ve taken during my career.” it feels SOOOOoooooo good. Me and my staff just doing this at each other over in Slack:
I freakin LOVE having a team that can help me reach more people and get more good data viz out there in the world.
Teams bring a bigger impact.
You know what else teams bring? Problems.
Needs.
Management.
Which – of course! They need guidance from the boss. Makes total sense.
Despite ever better systems and procedures, from time to time I still end up being an absolute bottleneck for my business.
One option is to hire more help, like a COO, and expand even further. This is what Nina did.
It’s also perfectly ok to decide that sounds like too much work.
I’m not a great manager. I don’t even want to manage. I want to be the one in every workshop, passing out the high fives to my students. I have my seasons where I want to shrink the team and be a one-woman show.
But then I think about all the people I wouldn’t be able to help… And it’s like that, back and forth, forever.
Entrepreneurial Seasoning
You can probably identify other areas of your business where you catch seasonal feelings. Like growing or whittling the services you offer.
If you’ve only been in growth mode so far, hang on – winds will shift. That’s not a bad thing. Mary Poppins came in on a change in wind direction, after all.
Jereshia Hawk made a great point on her podcast: If you’ve only seen growth mode and your revenues have been jumping more than 30% each year, you might need to make yourself take a maintenance season.
Seasons can last months. Or hours.
It’s so tricky. So here’s what to do:
Recognize when a season is changing. You can usually tell by your reactions to common events.
Recognize that this is just a season. It won’t last forever. Take advantage of the season you’re in, while you’re there.
Do you have different seasons than the ones I listed out here? What season are you in right now? Email me – I can relate.
Staffing Up
Entrepreneurs who have the seed of an idea for a business ask me questions like How do you take the leap? and How do you get your first client?
Entrepreneurs who are sprouting have cleared those hurdles. Looking back, those seed stage questions are heart-warming: they’re real and sweet and entirely solvable and my gosh how quickly those worries morph into other pressing questions.
Sprouting entrepreneurs wanna know how to manage the massive incoming workload and how to staff up – carefully.
Nina Sabarre‘s sprouting business must have been sprinkled with Miracle Gro. Intention 2 Impact is only 4 years old but she’s already amassed huge clients like the Chan Zuckerberg Initiative and a deep bench of team members. In this quick interview, I wanted to ask Nina how she staffed up with care, while all that growth is still fresh in her mind.
STEPHANIE
Who was your first hire? And how did you know it was time to hire them?
NINA
My first hire was myself! After three years in business, I transitioned Intention 2 Impact from a Single Member LLC to an S-Corporation — which required me to become a W2 employee with a salary. In addition to tax benefits, this helped me prioritize paying myself monthly.
My second hire was equally important. I realized that I cannot sustainably scale I2I alone, so I brought on a business partner and Chief Operating Officer (COO).
STEPHANIE
Say more about that. What exactly does your business partner and COO do that you couldn’t do on your own? How, exactly, are they helping you scale?
NINA
My goal is to build a premiere, next-generation social impact consulting firm, and I have always known that I cannot do it alone. My business partner, Dr. Kathleen Doll, is the yin to my yang! As COO, she oversees the internal, daily operations, which allows me to focus on the big picture strategic vision of the company.
Stephanie, remember in 2020 when you encouraged me to take the Clifton Gallup Strengths Finder assessment? That is when I realized that my core strengths are in vision, strategy, and influence, and I am lacking in execution. Kathleen’s strengths are complementary to mine – which makes us an unstoppable team!
STEPHANIE
Yes! Ok but can you give some specific examples of internal daily operations vs big picture strategic visioning? You aren’t sitting around just thinking all day, are you?
NINA
I wish! At the beginning of each year, I put together our annual business plan (leveraging last year’s data and in alignment with longer term goals). In the plan, we identify SMARTIE goals for five categories of business: products & services, operations, finance, business development, marketing.
Kathleen owns the products & services and operations goals (i.e., what we do and how); and I own the finance, business development, and marketing goals (i.e., how we build to sustain what we do — rooted in our ‘why’).
In addition to BD & marketing, I tend to play a lead role in the beginning and end of projects. This typically means building client relationships, setting overall project design and strategy, facilitating sensemaking, and designing final products.
Kathleen is the real mastermind keeping the work on track and on time. She manages projects and consultants, and is incredibly skillful at high-quality execution.
Although we have our different strengths and distinct roles, we practically share a brain + heart! I am so lucky to be leading I2I with one of my best friends.
STEPHANIE
Your company has been growing tremendously over the past few years. Besides you and Kathleen, I know you’ve got a bench of associates. And an assistant? How did you know it was time to hire each of those people? And tell us if they’re contractors or employees.
NINA
In 2018-2019, the “company” was just me, myself, and I – working mostly as a sub-contractor for other firms. In 2020, I started bringing together independent contractors to go after direct contracts with ideal clients and grow I2I into something bigger than myself.
Over the past three years, we have had more than a dozen consultants work across ~30 projects. We have three types of engagements with our consultants:
(1) One-time consultants who work on a single project because of their unique subject matter expertise
(2) Go-to consultants who have worked on more than one I2I project and can be tapped in easily because they understand our values and expectations. These consultants have other priorities, but I2I is a major part of their consulting portfolio
(3) Integrated consultants who work across several I2I projects at once and are committed to growing I2I together.
We are in the process of transitioning our integrated consultants to full-time employees, which requires ensuring our finances and HR systems are in place for long-term stability. This is a major focus of 2023. Eventually, we’ll mostly rely on FTEs rather than contractors, but we are taking our time to scale sustainably.
In January 2022, we hired an assistant, Maria, and she has been a major asset to our team! We found her via Peachtree VA – a company for small businesses like ours to share virtual assistants. I first realized I needed to hire an assistant when too many things were falling through the cracks. I was tired of responding to emails “in my head,” forgetting to send calendar invites, and letting bright ideas die on the back burner.
At first, I felt guilty about hiring an assistant. I thought I wasn’t “important enough” to have one. Then, I realized that doing everything by myself (and failing at it) signaled that I2I wasn’t “important enough” to invest in the right support systems to succeed. In fact, administrative tasks are just as important for the success of our small business as our project work and business development.
STEPHANIE
All growth comes with some growing pains. Can you share one pain and one unexpected win?
NINA
Here’s one pain AND win: We are turning down opportunities because we do not have the bandwidth to take on more projects.
(It’s just Stephanie, talking to you Dear Reader, from here forward.) That kind of growth in just a few years is only possible when you have a team.
I remember making my first hire – it took me years to figure out the confidence, the logistics. But once I did, I wished I’d have made my first hire sooner. Matter of fact, every entrepreneur I talk to says the same thing.
In the conversation above, I bolded Nina’s comments that reflected critical decision points that led to growth. While everyone’s path is different, I hope you’ll begin to recognize when you’re having similar thoughts and identify those as signs that you’re sprouting beyond the terracotta you’re currently in.
PS. Nina’s also a guest speaker inside Boost & Bloom!