What I Learned From Hiring My First Employee

This story is for entrepreneurs who want to scale their business but are feeling stuck in being overwhelmed by doing everything themselves. I share from my own experiences of building companies for over 25 years, including building a $50 million business and selling it to a public company.This is about my first employee and what I learned.In the beginningI hired my first employee when I was 27 years old. I’d quit my job a few months prior, set up office in a rental home in Pasadena. My then husband quit his job a few weeks later. We borrowed $35,000 from my family and we went all in.We started a staffing agency that placed title searchers and examiners and we had only surface knowledge of both staffing and title insurance. For the first few months, we stayed close to our super tight niche, but our clients consistently asked us to expand. They wanted us to find them escrow assistants and officers too — those were closely related roles to the ones we were already filling, but they were still out of our scope of business.Our first employee was at least 30 years older than us. We hired her because she had the experience that was needed for that role. She had expertise in placing escrow people and we did not. She had connections, she was all about business, and we liked her. We hired her away from a competing agency.For those looking to hire their first employeeA lot of startups today want to hire people for free. They offer equity in exchange for work. Founders want to find other people who are equally as passionate about their vision who will work for the chance that the company will be a success. I’m not saying that doesn’t work sometimes. Sometimes it does, but 80–90% of the time the company fails and the people on the team are left with nothing but the experience.Not only that, it’s all fine when business is good and everyone’s excited. But vague agreements, shady payment terms, and employee misclassification can turn into expensive and stressful legal battles when companies go under.Back when “startups” and “entrepreneurs” weren’t a thing like they are today, we hired people who we could afford to pay because we created businesses with positive cash flows that made revenue. In today’s world of startup advice, accelerators, and venture capitalists, it’s easy to lose sight that there are endless opportunities to build companies that are not unicorns but that are profitable. And those businesses can sustain employees and freelancers who can help you to scale the business beyond yourself.In retrospectIn the end, Pat quit because of the stress of working for two (then) micromanaging bosses who were hell-bent on fast growth and who would never even learn half of what she knew about people in escrow and how to talk to them.Looking back, Pat was a great hire in that she helped us to grow into a new vertical that brought in millions of dollars. Hiring our first internal person was scary but that was the moment that we took the first step from being “mom and pop” to building a business that could scale.Could we have entered into that niche ourselves? Absolutely! But we could have never scaled and grown like we did by trying to do it all.Before hiring Pat, our monthly revenue was around $100K with about a 30% net profit. We could have stayed around there or added a bit more revenue but we’d determined how many “temps” on assignment we could handle ourselves, along with managing every other aspect of the business.At that time we’d been doing all of the recruiting, business development, payroll, invoicing, bookkeeping — all the things that new business owners do. I talk to a lot of entrepreneurs who are in that beginning phase and are trying to figure out how to get to the next step.The most important thing is to take the next step. For us, our first hire was someone who could develop more business. Our second hire was an administrative person who took over the back office.Then vs nowBack then, to hire someone you either networked, like how we found Pat, or you placed an ad. The latter is how we found our next hire who was in community college at the time and ended up running some of our other companies years later. We’ll call her Charlotte.Charlotte taught me that some people are simply an absolute fit. Those people will be with you through thick and thin. They will be essential in making your vision a reality. Other people, like Pat, will take a role in your growth but they won’t be long-term if they’re not the right cultural fit (or if you don’t know how to manage them).Within six years we had about 12 offices and our revenue got up to $1 million per week. As you can imagine, it took a lot of people to do all of that work but scaling started by hiring the very first one to get us to the very next step.

What I Learned From Hiring My First Employeehttps://www.dianeprince.co

What I Learned From Hiring My First Employeehttps://www.dianeprince.co