How to get past the fear of hiring full-time employees?

My company does both consulting and products. In the past, I have been able to hire sub-contractors on an as-needed (per project) basis when my workload increased (have large client projects, launching a new product etc.). I also handle a lot of the creative/production work myself. Now I want to grow my company and build a small team of full-time employees. My dream is to build a cohesive, collaborative team that produces amazing work together. Contractors work out great for short bursts of work, but not ideal for a longterm growth strategy. My dilemma: I don't know that I have the consistent revenue to support FT salaries quite yet. My products alone bring in barely enough to pay my own (small) salary. My consulting work has lots of ups and downs and doesn't have a predictable revenue stream. I think the answer is to refine my marketing strategy to make my consulting work more predictable (develop the flywheel that brings new clients in consistently). I also need to work on growing the product income. But it's hard (and slow) doing these things without a team around me. So it's a chicken or the egg question. I've been wrestling with this hurdle for a couple years now, thinking at some point the revenue/predictability issue will be resolved, signaling it's time to hire and grow. But maybe I'll never truly be "ready" to hire until after it's done? What am I missing? Would I benefit from speaking with a business coach (and what specific type of coach)? Are there any books you'd recommend? I think I'm going to give E-Myth a 2nd read soon...


Growing up from 1+subs to a team like you're saying is a classic problem in consulting. The financial math is not in your favor until you get a consistent team.

Here's an article of mine detailing the issues and also detailing solutions:

Having said that, I would also say you're trying to do too many things at once with not enough resources, which means the chance of being successful with each one is diminished.

For example, you could focus on consulting revenue so you can build up your bench, so that you truly can self-fund the development of a product without distraction.

Or you could focus on product, investing time/money there with consulting only to pay for that, even using subs for that, until the revenue there gets to the point that it's scaling (which will be hard, as you can already see).

Building a product or a successful consultancy is individually very hard -- most fail. So trying to do both at the same time means you'll almost certainly fail.

Which is a shame, because that's "failure due to time-management / strategy" as opposed to actual market forces. i.e. something fixable!

I hope some of this helps, although I agree with you that talking through the details would probably be more helpful. The specific details of your situation matter.

Answered 9 years ago

Jason's answer is right-on. A rule of thumb that I've used when considering the big move from 1099ers to employees is if the employee's effectiveness in year one could recoup a 3x return on the investment of their salary. In other words, does the employee free you up to bring in more consulting clients, or generate sufficient product sales to justify their salary?

The issue you raise of not having a predictable revenue stream as a consultant is exactly what led to the creation of the Seal the Deal Success Kit, which we created for coaches, but works as well for any consultant who wants to level out the ups and downs of the unreliable in-flow of revenues. It's essentially a fully-stocked kitchen of information about essential mindsets for integrating leveraged action across three domains simultaneously: Networking, Marketing, and Sales. Do you feel you have a sustainable system for generating new consulting work/ revenue?

A business coach could make sense for you...there's a great article out recently citing Stanford research into the value of having a coach for your business. Here's that article.

Books I'd recommend include: Seal the Deal (by me), Upside Down Selling (by Ian Altman), Beyond Referrals (by Bill Cates), Made to Stick (Heath brothers), and Dynamic Laws of Prosperity (Catherine Ponder).

Hope this is somewhat helpful!

Answered 9 years ago

E-Myth offers a good model for businesses that fit the "machine" metaphor well, but does not work as well for businesses that are better described by a "people over process" organic metaphor. For the latter kind of business, even if you can afford it, the wrong first hire is far worse than no hire. E-Myth is dangerously biased towards highly legible business models where the machine can be automated using a mix of process and training for interchangeable people. If you are building a business model that needs unique rather than interchangeable people at this stage of growth, E-Myth is the wrong model for you.

Date before marriage, and make sure the person is The One. Then consider finances.

Your "fear" is not something to just get over. It is a valid signal that you should pay attention to. If your revenue volatility is so high that you cannot smooth it out with savings/credit to pay an employee, perhaps you should not hire one. It's a huge level-up in terms of complexity of running the business.

Beyond this, there are no general answers. All "machine" businesses (a la E-Myth) are alike, but every non-machine business is non-machine-like in its own unique way.

Answered 9 years ago

As far as I can read, your question is divided into three parts:
1. How to avoid hiring full time employees
2. What are the benefits of speaking to a life coach and what are their types
3. Any books to recommend
Let us tackle these questions one by one.
1. How to avoid hiring full time employees: As you have mentioned earlier in your question that you have hired sub-contractors, I suggest you do it again. Here are the reasons why:
a. Subs Can Help with Large Projects: There will probably come a time when your business needs to take on bigger projects to grow. Subcontractors or team partners can be a valuable resource in these scenarios and allow you to take on new, larger clientele. This allows you to find those additional “helping hands” for larger or specialized contracts and create a custom team for every new client or project.
b. It Is Cost Efficient and Risk Adverse: When your business needs some extra hands on a large project, hiring subcontractors is often much more cost effective than bringing on new, full-time employees. It also helps avoid risk by hiring a reliable and safe firm with substantial niche experience. Even though subcontractors are typically cost more than self-performing in-house, it is still more cost-effective in most cases. Subcontractors do not get benefits, office space or equipment. Hiring contractors also relieves you of having to pay employee taxes and a full-time salary. When all is said and done, hiring a subcontractor is about 20 to 30 percent more cost effective than hiring full-time additional staff.
c. Subs Provide Expertise: Subcontractors will often offer a superior service and provide expertise that you cannot get from your staff. In most cases, they have been working in a specific field for several years and have had ample opportunity to hone their skills. Furthermore, a subcontractor is likely to have done similar work before and will be able to get the job done quickly and efficiently.
d. Increased Productivity: Increasing productivity is probably the biggest benefit of working with a subcontractor. Rather than bogging your employees down with simple but mundane tasks, you can outsource these projects to a third party. Doing so will allow your staff to focus on core business needs and may actually get the job done faster if your subcontractor has expertise in this area.
e. No Long-Term Commitment: Hiring subcontractors allows your business more flexibility than if you were to hire new, permanent employees. Rather than bringing them on for long term work, you hire the contractors to work on a few short-term projects and then part ways. Be forewarned, sometimes they turn into a lifetime business relationship. With full-time employees, however, ending the relationship can be more complicated, can create considerable time and costs (unemployment, severance, etc.) and may end in legal disputes. This means there is a good chance you will end up paying someone a salary even if you do not require their services anymore.
f. Subs Have Specialized Knowledge: There may come a time when your company will need to take on a project that will require the services of a qualified specialist that can add value for your client and be "part of your team." If your company does not have a specialist on staff or if you do not have an ongoing need for one, it might be best to hire one for a short-term basis. This is preferable to hiring a full-time staff of engineers, architects, or legal professionals. Find a reliable and flexible partner.
g. Fewer Legal Obligations: In the eyes of the law, subcontractors are the owners and operators of their businesses and, therefore, are not entitled to the same legal protections as employees. For employers, this means that they have fewer obligations to subcontractors than they do to their employees. In addition to the previously mentioned cost benefits, employers will not have to send payroll taxes and deductions to the government.
2. What are the benefits of speaking to a life coach and what are their types:
Coaches are usually consultants from outside the organisation. They often have a background in psychology, business, training, or education. Ideally, they should have a professional qualification from a reputable coaching institute but more important is their track record and experience as coaches. They may be drawn from firms of coaching consultants, retired CEOs, or other experts from universities, think tanks, and government. The coach’s aim is to improve and develop the potential of the coachee. They do this by helping the coachee achieve their personal and professional targets, to become more confident and self-aware, and to become successful in their chosen field or simply in their life. In any event coaches should be dedicated lifelong learners devoted to acquiring skills, models, and tools from other disciplines such as neuro linguistic programming and positive psychology that will enhance their ability to coach effectively.
There are various types of coaching:
1. Sports coaching: Consider the sports coach. They help you with extrinsic and intrinsic motivation. The extrinsic motivation comes from the coach. You want to improve, and you don’t want to let them down. They vigorously direct operations from the side-line. They are passionate and committed about their sport. They develop objectives and implement a game plan and get great satisfaction from watching their players develop, excel, and grow. Intrinsic motivation comes from within – the love of learning, need for personal growth, fulfilment and self-actualisation and the desire to satisfy a curiosity. The sport coach plays back DVDs of the game to learn from their mistakes and continually improve and learn. They hold players personally responsible for their performance and provide constructive feedback to them in order to improve their game. While accepting that individual stars are useful, they realise that it is teamwork and team spirit that wins the game. This was proved when a mediocre Greek team defied all the odds and won the European Football Championship in 2004. It was also proved when Iceland against all the odds beat England in the European Championship in 2016. Similarly, nobody expected Portugal to beat France to win the championship in 2016. Sport coaches are now a feature of all competitive sports and athletic events. One would not expect a person to compete in the Olympics or professional sport without the guidance of a coach. It is now accepted that even the best athletes can improve with the expertise, experience, skills, encouragement, and guidance of a good coach. A competent coach can inspire, motivate, and challenge good players to even better performance. They exhort players to try harder and remind them to maintain their focus in the rough and tumble of competitive sport. Even people at the top of their game have a coach. Teams usually employ a sports psychologist and health and sports scientists to help them reach peak performance levels. Elite performers engage in deliberate sustained practice to hone their skills. They must work diligently at what they are not good at. They must go from unconscious incompetence to conscious incompetence to conscious competence and finally to unconscious competence. They need the eyes and ears of a coach to make them aware of where they fall short and bring them to the stage where the necessary skills becomes a habit. Coaches have a variety of approaches to achieve their objectives such as showing what other elite performers do, reviewing DVDs of the client’s performance or just pointing out to them where they need to improve.
2. Business coaching: Unlike sports coaching which has a win-lose orientation, business coaching has a win-win philosophy. In sport it is all about winning at the expense of your opponent. In contrast your company does not have to win at the expense of a competitor. Two companies collaborating might achieve more than two competing. There is also a difference in approach between sport and workplace coaching. Sports coaches coach their athletes, using technical skills, experience, and a ‘telling’ style of direction. By contrast, questioning and reflection are often more important in workplace coaching. Another vital difference between the two is that athletes spend most of their time training, and comparatively little time working. This contrasts with the business world where executives spend all their time working and truly little time training. Nevertheless, both types of coaching need to understand how people work together harmoniously to maximise results and to achieve the overall goal. Finally, when it has achieved its goal the coaching continues as it takes the learner from its current performance and plans for the future. It is important to instil a coaching mindset in the team, whether a sports team or a business team. The primary purpose of a business or executive coach is to improve business results. The primary purpose of a sports coach is to win at games or in competition. A business coach needs a deep understanding of the business and industry issues the coachee must cope with in each situation. Because of the substantial cost involved business coaching is usually reserved for senior management or those highflyers with senior management potential. BASF Corporation in the USA offers three types of coaching, executive level coaching, transition coaching for first time leaders and accelerated coaching for staff with high management potential. Every time an executive goes into a new role the company offers three-to-five-month transition coaching. The company offers longer periods of up to nine months for accelerated coaching – coaching that is not tied to a new role but rather is intended to prepare staff for the next step in their careers.
3. Peer and personal (life) coaching: The primary purpose of a peer coach is to develop themselves and their fellow employee through sharing expertise and helping each other on specific tasks and problems. Peers can provide emotional and psychological support that helps individual learning and career success. In peer coaching the emphasis is on the voluntary non-evaluative and mutually beneficial partnership between two individuals of similar experience. It helps individuals develop their self-reflection skills and identify areas in need of skills development. Peer coaching is widely used in business and education. The primary purpose of a personal coach or life coaching is to develop the individual and improve their personal performance. However, executive coaches may also address the personal growth and development needs of the individual such as communication and presentation skills. The personal coach will focus on relationships, life decisions, career choices, stress management and lifestyle issues such as fitness, diet, and health. Many people have been inspired to become life coaches because of the visibility and financial success of the industry’s superstars such as Tony Robbins. Originally an American concept, personal coaching is making inroads on this side of the Atlantic.
Benefits of speaking to a Life Coach are as follows:
1. Provides Clarity and Direction: The first thing a life coach is going to want to do is understand who you are and what you want. Sometimes you may know exactly what you want in your life, and other times you may have no idea. If you are feeling a sense of unhappiness or dissatisfaction and can’t quite put a name to it, a life coach can help. Clarity involves being clear about who you are and living a life that is meaningful and purposeful to you. It means knowing what you want, why you want it, and how you can go about it is getting it. Coaching is a process that can help you uncover your gifts and talents and discover what gives your life meaning. There may be blind spots or hidden gems below the surface that you are unable to uncover yourself. With a help of a coach, clarity and direction can unfold, leading you to a fulfilling, intentionally satisfying life.
2. Helps with Goal Setting: Setting personal goals is not always easy, and long-term goals can be particularly difficult to visualize. You may be used to setting goals in the near term but setting up goals and understanding where you want to be in the future is extremely valuable. For some people, this can be a daunting and anxiety-inducing task. A life coach can guide you through the process of setting goals by helping you understand your immediate and future wants and needs. They can provide you with leading questions that can help you to discover something profound about yourself and what you want out of life. They can also help you stay organized and plan to get results. Sometimes the hardest part of achieving goals is to make a plan that is realistic. If your plan is overly ambitious, you might get discouraged and sideswiped from your journey. A good life coach will make sure each step in your plan is attainable and specific enough so that you are crystal clear on what you need to do and by when you need to do it.
3. Provides Unbiased Feedback and Support: Unlike a friend or family member, a life coach is there to help you in your personal growth journey by giving you true and honest feedback, free of any bias. A life coach will focus on providing input that will lead to your overall goals rather than simply trying to make you feel better (or sway you toward their personal agenda). Their advice will also be backed by relevant professional life experience gained from helping others with similar goals. They will be one of your biggest cheerleaders, celebrating every milestone on your journey and firmly putting you back on track when you have swerved astray.
In the process of working with your life coach, you’ll most likely be pushed to learn more about yourself than you would have normally. They will ask you questions you may not have thought of and provide you with deeper insight into your life and your aspirations. Here are just a few personal areas they can help you improve:
a) Work performance
b) Relationships
c) Work-life balance
d) Time management
e) Communication skills
Additionally, by helping you become more successful at meeting your goals and sticking to your plan, you will inherently become more confident in yourself and your journey. You may not become a life coach yourself, but you can learn the techniques that they use and apply them to your daily routine even after you have finished working with your coach.
4. Holds You Accountable: Accountability is important to achieving dreams and goals. It means you are being held responsible for your own success. Rather than seeing it as burden or added stress, see accountability as a sense of ownership and pride over your life. When you share your goals out loud with your life coach, you will be held accountable for your goals and are more likely to make them a priority. In fact, having a coach to check in with regularly will help keep you from straying too far from your goals at any given moment. They will know your roadmap as well as you do (if not even better), so you can rest assured that someone is there to help you stick to it.

The process of understanding yourself and what you want out of life—and setting goals to achieve that reality—can be done without a life coach for many people; however, a coach can help you attain those results faster. It is time to go after what you want in life. If you are struggling to achieve your goals, try hiring a life coach. Having a life coach will help you clarify your goals, create a solid plan to achieve them, support you along the way, and perform at your highest potential.
3. Books recommendation:
1. The 22 Immutable Laws of Marketing by Al Ries and Jack Trout
2. Work Rules by Lazlo Bock
3. Launch by Jeff Walker
4. High Output Management by Andrew S. Grove
5. Master your Emotions by Thibaut Meurisse
6. The 15 Invaluable Laws of Growth by John C. Maxwell
7. It works by R.H. Jarrett

Besides if you do have any questions give me a call:

Answered 2 years ago

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