You should do a break even analysis for your business, then add in an employee or two to determine how much more work you’re going to need to sustain the added expenses of employees.
So, for example if one employee with payroll, uniforms, worker’s comp, etc… costs you $2,500 a month and your average job revenue is $275 then you will need to do 2 - 3 more jobs per week, every week, just to break even.
Once you do that you can formulate a plan to increase revenue which is a must when you hire someone.
A few years back I hired someone just because I was “so busy” and then hired again because it was pretty cool to not have to kill myself in the field everyday.
However, it came at a heck of a price. Like having a large pizza all to yourself and then inviting 2 guys over to watch a game with you and suddenly you realize there’s no pizza and you’re the one who’s still hungry.
You’ll need more pizza if you plan on sharing yours.
Good thread! This is definitely my biggest struggle. I never want to hire too early in the season, for fear that the weather won’t break soon enough and I won’t have enough work to get them started. Then by the time I need a new guy, I’m desperate, which is not a good mode to be in when hiring.
I hate to be the guy that rags on “Millennials” because it’s too easy, and every generation says the generation after them is awful, but the young guys we have hired have all been very high maintenance in different ways. When I was young working for a company, we all at least tried to be a little tough, but the young guys seem like they can’t handle any adversity or challenges whatsoever. And while I want to be tough on them, I feel like there is a fine line, and if I go overboard, they will just say F it and quit when I need them.
I’m going to check out some of this book suggestions, and work on new training systems myself this winter, because I could use the help for hiring!
I started doing a couple of things differently this year, which have helped a lot. I train the new hires on their first day, before they go out with anyone else. I never used to do this, but I have found that it really helps get them on the right track.
I’m also going out again with them after they’ve been cleaning for a couple of months, to help correct the bad habits they’ve picked up. I really didn’t think this would make that big a difference, but I’ve been amazed at the small corrections that I’ve made in a guy’s technique that make him so much better at the job. I’ve had three guys go out of their way to thank me for taking a day out with them to make them better.
As a solo guy, you can always hire your first person on a part-time basis. You might be surprised how many people are looking for part-time or on-call work. That’s why so many people drive Uber.
It’s an expense, for sure. But if it allows you to put more work on your books, then yes, you can make more money right away. Just keep in mind that if hiring someone allows you to book an extra $300, you are going to keep a much smaller percentage of that $300 than you’re used to working on your own.
This is, without a doubt, the hardest part. You have to talk to so many people to find one that you want to hire, and most of them won’t work out anyway. Whoever posted here, hire slow/fire fast is dead-on. Take lots of time hiring. The worst thing you can do is panic hire. You will always end up regretting it.
I use Quickbooks Assisted Payroll, which figures out all that stuff. It’s part of the expense of having employees. I basically figure that my total labor costs, which is wages, taxes, and insurance, is about 50% of each job price. Then all the other expenses come out (truck, supplies, etc.).
I look at hiring employees as watching the game and the two guys you invite over, each bring a pizza, share one and after they leave YOU still have one left all to yourself
You’re saying the exact same thing I said except that I’m just adding the fact that you should know precisely how many extra jobs/customers you will need before you hire. Just bringing on an employee to “help out” will cause a decrease in your profitability not an increase.
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The biggest thing is we use a payroll company and a bookkeeper if you don’t have an accountant as many of us can not afford to hire a staff if you have a large enough company then you don’t need this kind of advice anyway. However I’d rather not deal with the headache of payroll taxes let a professional handle that its like 90 bucks a month with one company and like 60 bucks a month for bookeeping and filing personal and business taxes with another company I got a great deal on that last one for sure anyway its worth the money to know its getting done right but as a business owner I still have to make sure they are doing their job right from time to time you cant always trust everyone all the time.
Anyway having this out of the way allows you to factor in this, if you don’t have time to answer the phone and call everyone back that leaves a message or lose business because you can’t answer the phone in the first place so they call someone else I think you can not afford to not hire (*also its time to raise prices). Then it just keeps repeating itself, once I got too busy I hired one guy then when I got too busy again I hired another guy. Then you need to keep several thousand per employee as payroll taxes are very expensive since you only pay them part of their check and send the rest plus extra for each employee every month to the tax collectors (not to mention quarterly taxes). I say as long as you can’t keep up with the phone hire more then if you want to keep building keep advertising and soliciting until you reach your limit.
I’m good with me plus 2 for now and I don’t see myself going over me plus 2 anytime soon. Eventually I may run the operations and do outside sales for another company as sales are becoming an integral part of my DNA as the only way to grow a business is to be a salesman but selling for someone else can pay more and be less stressful than just relying on your own business so in other words I’m open to diversifying and keeping all options open as I don’t want to be climbing ladders into my 50s but I’m not counting on Social Security to pay my bills either.
Just make sure whoever you hire cares about satisfying customers as much as you do because to justify paying your prices over the competition your employees must understand that your customers could get a crappy job done for less money by hiring a bucket bob, so “anything less than perfection is stealing” ( I should TM this.
