Strangely enough, this is one of the most common questions I get. In the past, before answering, I’d ask a bunch of questions related to their practice, backlog, etc. etc, etc. Lots of questions. Based on what I was told, I would advise on whether I thought they should hire or not.
Nowadays, here’s how that conversation tends to go:
Practitioner: Do you think I should hire?
Practitioner: But you don’t know anything about me. You don’t even know what I’m dealing with? Don’t you need more information?
Practitioner: Then how could you possibly know that hiring is a good idea without even knowing anything about what I’m living?
Me: Because I already know.
Practitioner: How can you?
Me: Let me guess. You’re working extraordinary hours, and still, you’re barely keeping your head above water. Your team is either overwhelmed, tired, demoralized, or all 3.
Practitioner: Okay. Go on.
Me: Your clients are starting to lose patience and their constant demands is starting to wear on you and your team.
Practitioner: Yeah, yeah. How did you know?
Me: Come here into my back office and I’ll show you my crystal ball.
Me: No. Of course not. (This is where I roll my eyes and snicker to myself). The reason I know is because that’s what almost everyone in practice is living, regardless of whether you provide accounting, tax, consulting, auditing or bookkeeping services. If you’re any good, everyone wants you and there’s just no keeping up. Too many of “them” and not enough of “us”.
Practitioner: But you didn’t ask me if I can afford to hire. Right now, my cash flow is not the best. I’m not sure I can afford to hire and pay them.
Me: Can you afford not to? The only thing that’s certain is that unless you change strategies, things won’t change.
Fact of the matter is this: Have any of you EVER heard anyone say, “I have too many good people working for me”. Nowadays, you can NEVER have too many people. As soon as you hire, and you have them somewhat trained, the level of service you’ll provide will go up. As a result of the better service, the demand for your services will go up, and you’re right back in the same boat again. NOT ENOUGH PEOPLE.
As for your ability to afford it? Consider this. You hire someone new, without experience. As green as healthy well watered grass. You negotiate a starting wage of say $20 per hour. Odds are EXCELLENT that after the initial first 2 weeks of intense training that is admittedly expensive, this same John Deere colored employee will be somewhat productive and able to earn you an effective charge-out rate close to $30 per hour. Nowhere near the 3.5 times wages of $70 per hour, but hey, they’re learning, improving, and already paying for themselves. Within 2 weeks! Another 12 weeks, this person will be earning you closer to $35-$40 per hour. In 6 months, if you’re very intentional in your training program, they’ll be earning you very close to $50 per hour. But here’s the best part. Work is now being pushed out the door, billed and if you’re smart about it, collected. So, can your cash flow handle this?
No doubt, your cash flow will suffer a temporary hit. Especially during those first few weeks of intense training and the time it takes for their first engagements to be completed, billed, and collected. But you either learn to change tires in the mud or remain stuck. Pick one.
I’ve been warned to keep my newsletter short. It really does need to be MUCH longer to cover even some of the bases that should be discussed in a newsletter that starts with such a question. But I’ll stop here and more to come. Or heck, why don’t you simply call me if you want more.