A friend of mine started his own construction business just over a year ago. His experience, attention to detail and building talents have fast-tracked his success. This past fall, he was doing some work on my house and telling me that his phone was ringing multiple times every day with people asking to hire him. A great “problem” to have. Already booked over a year out, he was politely declining.

He mentioned that if he had one other person working with him, he could get so many more jobs done per year. The problem is finding the right person, and the complexity that comes with adding someone to his payroll. 

A common quandary

I talk to a lot of business owners that start as a one-person show and stay there. I also speak with many that begin that way and quickly add team members to facilitate expansion, and both are successful and happy. I can understand the dilemma here. When do the pros of an employee outweigh the cons? This may seem like a simple question to answer, but a lot of thought should go into the decision. 

Breaking it down

It’s time to hire employees when the business owner’s capacity to handle everything themselves becomes a significant bottleneck to growth, efficiency and personal well-being. This decision often involves weighing the costs of hiring against the lost opportunities and stress of doing it all.

A good indicator is when you start turning down work or delaying key projects simply because there aren’t enough hours in your day. If you are missing out on profitable sales or contracts due to a lack of capacity, the potential revenue loss from missed opportunities almost certainly outweighs the cost of a new hire. 

Also, take an honest look at yourself and the work you’re performing. When you find yourself rushing through jobs or cutting corners just to keep up, your stretched capacity is starting to hurt the quality of your offering and, ultimately, your reputation. At this point, your time should be focused on the big picture, not routine fulfillment.

A shift in balance

I have so much respect for people that start, manage and run their own business. There is nothing easy about it and it almost always involves long hours. The public only sees the eight-plus-hour shifts they put in during the day — not the hours back at the office doing the administrative work. 

If you find yourself working every waking hour of the workweek and into weekends just to keep up, it may be time to pass the torch on some of the responsibilities. It’s important to value your life away from work. Having time to dedicate to your family, hobbies and just simply to step away from the grind is important to your long-term happiness and avoiding burnout.

The cost of doing it all

The hesitation to hire often boils down to the perceived cost of a salary, but you must instead calculate the opportunity cost of not hiring. While a new salary is a fixed expense, the cost of doing it all yourself is the lost revenue from missed sales, the stagnant productivity from an owner backed up and catching up on paperwork, and the ultimate risk of burnout and health issues. If the cost of your stress and lost business potential is greater than the cost of a new employee, hiring isn’t an expense, it’s an investment.

Before you jump into a hire, be practical and think things through. Don’t just hire a “helper,” but someone to own specific tasks you are offloading. Have a set work load laid out and make sure you both understand what their role will be. If possible, consider starting with part-time contractors to test the waters with lower risk. Most importantly, ensure you have a robust cash flow and a budget buffer that accounts for at least six months of salary before making a full-time commitment.