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Chris LoCurto

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September 20, 2011

When To Hire Team Members

September 20, 2011 | By | 29 Comments">29 Comments

Here’s a question Charlie sent in after listening to the EntreLeadership Podcast:

I’m a one-person e-commerce company working from home. I feel like I could keep two or three people busy full-time, but I don’t have enough extra money to hire even one person part-time.  I have so many ideas on how to expand my business, but I hardly have time to work on any of them after doing all of the other things that have to be done day-to-day.

Maybe it will be covered in the (EntreLeadership) book or in a future podcast, but I’d sure like to know how I can get my business to the next level.  I have considered outsourcing my marketing,  but don’t know if that’s a smarter move than hiring a “team member” even part-time.

 Any advice or feedback would be greatly appreciated!

This is the age-old question for a one-person shop. When do you add a team member, and what if you can’t afford it? While the answer seems as though it must address both questions at the same time, it technically does not. The reason? You can actually tackle the first question without having to worry about the second. This early in the game, I am ALWAYS going to try to hire a salesperson first. There are two reasons why:

  • Without sales, your business doesn’t exist—no matter how amazing your product is. Obviously, Charlie has sales. But to grow, he has to sell more. In the early stages of a business, you should be looking for ways to add salespeople way before you hire administrative people. Get the product out the door into someone’s hands, so you can put more money in the bank!
  • Salespeople pay for themselves. The great thing about a sales position is it’s not a fixed expense. If they don’t sell anything, they don’t get paid. Therefore, it shouldn’t cost you much more than a few hard costs, like phone/space/bad coffee, to have someone selling your product. If you hire admin, you have a fixed cost that you must pay—no matter how many sales occur.

Where you might have to answer both questions at the same time is if it will take some time for the salesperson to get the “pipeline” full. If so, then you might have to supplement them a little until the sales start rolling in. It doesn’t need to be a lot, just enough to put food on the table and keep a healthy sense of desperation, so the sales do roll in. Pay too much, and the feet go up on the desk.

This time period shouldn’t last longer than 90 days if possible. By then, a good salesperson should have money coming in the door. If not, you need to ask yourself:

  • Is this the right salesperson? Have they done everything possible to make a sale? Are they selling to the “why” of the potential purchasers? Have I done everything possible to set them up for success?
  • Is it my product? Is there something wrong with the delivery system? Is the product something that is not needed?

The great thing about Charlie’s product is it’s already selling, so this should be an easier process.

Question: When did you know it was time for your first hire?

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  • http://virtualteam.ph/ Steven

    Really great post. If someone is looking to offload some of their extra work, hiring staffs can really help them.

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  • http://lgthaxton.wordpress.com Louise Thaxton

    I knew it was time for my first hire when I had to personally process ten loans – and I knew if I had to do that again – I would look for another line of work. It ended up less expensive to give up some of the revenue for someone to do what I HATED to do – and then I actually brought in more business. Since that first hire – I haven’t quit! 16 people now – all operating in their giftedness! AWESOME!

  • http://twitter.com/mahez007 Uma Maheswaran S (@mahez007)

    We can begin hiring, when we feel that there will be value adition out of hiring. The cost benefit analysis will justify the action of hiring.

    • http://Chrislocurto.com Chris LoCurto

      Right on.

  • http://www.cabinart.net Jana Botkin

    Another way to get help when you are too poor to pay is to trade with a customer/friend/student. I used to have my drawing students do my print framing and notecard packaging in exchange for free drawing lessons. It took the edge off the endless lists of busy work.

    • http://Chrislocurto.com Chris LoCurto

      Great idea Jana!

  • http://ericspeir.com/ Eric Speir

    That makes a lot of sense. As leaders our tendency is to get overwhelmed with the administrative details but without sales we have no administrative tasks to do. A good salesperson will definitely pay their own salary and then put money in the bank for you. What types of incentives would you offer recruiters for a college?

    • http://Chrislocurto.com Chris LoCurto

      Great question. Are there any limitations? Like money? :-)

  • http://twitter.com/AccuContrive AccuContrive (@AccuContrive)

    Charlie,

    I had exactly the same dilemma as you have now. I’ve read “4 Hour Workweek” and followed Timothy Ferriss’ advice about delegating to a “virtual assistant” most of the repeating and daily tasks.

    This took my business to the next level. It will bring the magic to yours as well.

    Good luck.

    • Charlie

      Good reminder, I actually started looking into a VA about a year ago but didn’t get to the point of handing off any of the day to day tasks. I did “hire” a couple of guys on elance.com to write a couple of articles. I used them for content on my site and also on blogger to get another incoming link to my site. I had planned to have them write some product descriptions but both ended up being too busy with school/work. That was unfortunate since they were both somewhat familiar with the parts that I sell. Maybe I’ll end up revisiting them for some work.

      I’m going to start tracking my time and tasks so I can get a better idea what I might hand off, at this point I don’t even know.

  • Teresa Duke

    Great answer, Chris!

  • http://gravatar.com/operationparts Charlie

    Chris, thanks for answering my question. I just about deleted it before I sent it thinking that I probably wouldn’t get a reply.

    I understand what you are saying about a salesman but currently I only interface with about 1-5% of my customers, by email or phone. I sell gun accessories (tactical, not hunting) so it is a very niche market. It would take a long time to educate someone on the 1400 sku’s if they were new to the industry. I have also interfaced with customers on forums but not often with having to do things like purchase orders, advertising, packing orders, pricing research, site content, and about 100 other things.

    Most days I feel like I spend half the day figuring out what I should do so that hurts my productivity as much as anything. I’m not sure if I should cut back and work on a few things like site content (most of my business comes from search engines) and the daily “must dos” or get some help and try to do more like newsletters, promotions, etc. We’re looking to move across the country in about a year so I would only do outsourced/contract help until then.

    • http://twitter.com/tbric Tom Brichacek (@tbric)

      Charlie, go back in Chris’ blog archives and read every post. There are a couple that will help you. One that I can think of off the top of my head is Goal Setting. (I’d link it, but not sure how!) Start off your morning with a list of things that HAVE to be done that day. Don’t leave till those are done. If you get to more tasks, BONUS!

      If your orders come in through the web, concentrate your efforts to make that as smooth as possible with little to no interaction from you. This will free up time that you are spending doing work twice. (re-entering orders in different systems, etc..)

      Another thought is to have a high school kid that could come in after school to package your items for shipment. Low cost and only when needed.

      • http://gravatar.com/operationparts Charlie

        Tom, I’ll do that. I recently ordered Entreleadership, First Things First, and 7 Habits of Highly Effective People so I’ll have a lot of reading to do. I do think that not having direction is one of my biggest problems.

        Between entering orders (ave 10/day) in Quickbooks, boxing, shipping, and book keeping I probably only spend an hour on average as I have it pretty well streamlined.

      • http://Chrislocurto.com Chris LoCurto

        Hahaha…I should have read your response first Tom. :-)

    • http://Chrislocurto.com Chris LoCurto

      You have to make the decision of what’s going to make money today. If most of your work is online, then what is the next step that will grow you enough to pay someone to do it.

      Since most of your sales come from search engines, I would focus a great deal of time there. Start by taking every step that your customers do to make a purchase from you. What ways can you be more visible and what ways will close the deal better.

      And make a list of things that news to be done tomorrow at the end of every day. That way you don’t waste time wondering.

      • Charlie

        I’m working on getting a couple of guys that I know go through the “experience” on my site so I can get some fresh eyes on it.

        I’m going to try to get one of them to do some article writing for me and the other one to do some graphic work so I can focus on writing product descriptions. Most of my products are using the same description as the manufacturer (and a lot of the competition). Hopefully with unique descriptions I will get a boost in the search engines.

        I did start a simple excel file with tasks to do the next day, I have it in the startup folder so it opens up first thing the next day. Whenever I wonder what I should be doing I just take a look and I’m back on track.

        I am also doing a trial of RescueTime which tracks how your time is spent on the computer, email, facebook, quickbooks, etc. I expect to get a better idea how much time certain tasks are taking so I can evaluate the possibly of handing them off.

  • http://twitter.com/tbric Tom Brichacek (@tbric)

    Spot on advice Chris. One thing I might add is to outsource the accounting to a good CPA/book-keeper. That would also free up some time that doesn’t add to the income.

    • http://Chrislocurto.com Chris LoCurto

      Great point!

  • http://www.thedaileygroup.com Alyce Dailey

    I’m with Dave. We have don’t sell a product but a service (real estate) and found that by hiring people that could do “$10/hour work” made us more productive as sales people. By building an administrative infrastructure first with solid systems, we were much better off than hiring another salesperson initially.

    • http://Chrislocurto.com Chris LoCurto

      Definitely the way to go. If YOU are the one selling, and admin can get you selling way more than the admin cost, do it and quickly!

      Sent from my iPhone

  • http://joelfortner.wordpress.com Joel Fortner

    Dang, I hate when you give consistent advice. I was hoping for a gap to exploit! As you know, we’ve discussed this and this is exactly what I plan to do as my business grows. Thanks for the education then and now.

    • http://Chrislocurto.com Chris LoCurto

      Hahaha….sorry? :-)

      • http://www.joelfortner.com Joel Fortner

        I’ll keep looking for other opps! Don’t you worry.

        • http://twitter.com/tbric Tom Brichacek (@tbric)

          Maybe that should be a new commenter “goal”. Catch Chris giving inconsistent advice. First person to find something gets a auto bump to #1 commenter for the month! :)

          • http://joelfortner.wordpress.com Joel Fortner

            Oh, Chriiiiiiiiiis! Brilliant idea, Tom!

  • http://www.burkholderbuilidngs.com Dave

    I have a service company where I am my brand. Would it be a smart idea to hire a part-time administrative assistant so I can double the amount of time I am out selling my product?

    • http://Chrislocurto.com Chris LoCurto

      ABSOLUTELY!!! If you selling MORE than pays for that person, then it’s no question.