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As a small business owner, how do you know when it’s time to add a team member? In a webinar with Susan Fennema, Megan Schwan of Sidekick Accounting Services discusses:

  • The triggers to let you know it’s time to hire team members
  • The first items to delegate
  • Why it’s harder in a service-based business to identify those things
  • Getting out of the trap of, “If it only takes 5-minutes, I can do it myself”
  • What business owners should be focusing on
  • Which roles to hire to make the biggest difference
  • Figuring out how to afford help when you’ve been doing it yourself
  • The need for processes
  • How to create processes
  • and much more!

Please find the full video transcript below:

Megan Schwan: Hello, everyone. Thank you for coming or watching our first 2023 Sidekick’s Assembly Talk. Today, I am so excited. I have a guest on here to ensure we continue adding value along your business journey. We talked a lot about finances and numbers last year. I want to combine that with some additional things this year because running a business is such a journey. It’s such a whole thing. It’s not just cut and dry. It’s not what you’re just doing. It’s a whole thing when you want to grow your business. And because we focus on helping you grow, this is part of it. It’s having those additional conversations in areas in which I’m not an expert.

Today I have the expert Chaos Eradicating Officer, CEO Susan Fennema of Beyond the Chaos. It’s a consultancy helping small business owners extra pay themselves from their day-to-day business operations to grow their businesses and get their lives back. She and her team have served over a hundred small businesses with 30-plus years of operations and project management experience,\ in professional service industries. Susan is on a mission to improve American society exponentially when she’s not making multi-course dinners. She enjoys her Texas A&M football games and Black Hawks hockey. She lives and works from her home in McKinney, Texas, with her husband and their dog, Shelby. Susan, thank you so much for joining me. I’m really, really excited about this conversation that we’re going to have today.

Megan: That’s awesome. We’ve got a really juicy conversation today, so let’s dig in. We’re talking about adding team members or the potential of adding team members. A lot of people think of team members in terms of contractors or employees. Our focus will also be in the middle, with a little more focus on employees.

Susan Fennema: Thanks, Megan. I’m excited to be here. I look forward to sharing some value with your clients and others who might also listen to this. My background is absolutely hardcore project management, and if you think that there is no hardcore project management in making multi-course dinners, you just haven’t done it yet. So I get to bring my passions together when I do that.

We can talk either way. There are some rules around what you’re allowed to require of contractors: you can’t tell them where to be, when to be there, their timing, and that kind of stuff. But holding them accountable, you still get to make that decision as to whether or not you’re going to delegate to them and whether or not they’re going to be part of your team. So to that point, it’s kind of the same part there.

How To Know When It’s Time To Hire Team Members

Megan: Just as full disclosure, if you’re not sure what qualifies as an employee versus a contractor, please let me know, let Susan know, or contact us so that we can talk a little bit more through that. Depending on the state, there are very specific requirements and compliance that you need to follow, and you never want to get in a position where you’re on the wrong side of that. As we start this conversation, we will talk about how we add to a team. So what’s a great trigger to know that maybe it’s time to add a team member to your team? How did you know when it was time to add a member to your team?

Susan: I have a team of about ten women right now. It’s a combination of employees and contractors. When I started my business, I would do it all myself. I was not going to get involved in managing a team or anything like that until I realized I was always glued to my computer. I couldn’t go on vacation. I couldn’t even focus on the big picture things I needed to focus on as a business owner to grow the business, find the next client, or whatever the case was.

My team does fractional project management for some clients, and that was the first team member I added. I knew it was time because that was all I could do: keep up with our clients in project management. Interestingly enough, to this day, that’s one of the things I tell clients: that’s the first thing you have to let go of — project management of the execution of delivering whatever your product is, whether it’s a service or a physical product, you have to get out of that. That’s very tedious, very “working in the business.” Systemizing it is the way to go.

We’ll get down to how you knew you could afford it. In my case, the finances were straightforward. I knew what I was billing clients and what I was paying her [my first team member], so there weren’t many other overhead costs except paying me. I knew I was losing that. I didn’t do a deep dive, and Megan will tell me how I made a mistake there because I probably should have. I’m sure she has excellent tips for covering our finances. But in my case, I knew I was stuck. I couldn’t grow the business if I didn’t do something.

Susan: Megan, what about you?

Megan: So, similar, but I didn’t go into project management. I went lower. I hired a data entry person first because it was time-consuming to do it myself. It wasn’t incredibly difficult, but that was how I knew. I also worked part-time for the first couple of years in business. It was like I couldn’t do anything. I was starting to stumble along the work and jumble all those things on top of having small children and everything that goes with that. Feeling like I was drowning, juggling, and dropping everything was the trigger for me.

Susan: That feeling of overwhelm is such a great hint.

Jamie Andrzejewski: From a product-based business standpoint, I knew I couldn’t be producing the product itself. I launched my business officially at the end of May, and by July, I had hired my first person. I knew that if I were dropping essential oils into a bottle, it wouldn’t become a scalable business. I immediately hired my first team member and quickly grew that number to three. I wanted to stay in my lane, which is the business and the pouring into customers, and I couldn’t do that if I were making products at my dining room table.

Susan: So, Jamie, you are talking about the equivalent of what I’m talking about in a service-oriented business.

Jamie: Yes.

Susan: It’s sometimes harder in a service-oriented business to identify those things because you feel like everything’s a big thing. When you’re delivering a product, you can easily say, well, I won’t pack up the boxes. That seems so straightforward and simple to have someone else until you probably get into it, and then you are like, well, they’re not doing it my way, which we’ll get to in a minute. One of the things we’ve started doing with our clients now is giving them a spreadsheet to identify everything they do every day. If you start itemizing those things and then put a price tag on what you would pay somebody to do those things, there becomes this moment where you’re like, and this is a horrible thing to say because as a business owner, you’re also the janitor. Still, at some point, you say, “That’s beneath my pay grade.” I need to pay somebody to do that because I’m losing money in these other ways because I can’t focus on these other things. It makes it more straightforward when you start to fill that out.

Megan: That’s a great suggestion.

How To Delegate Tasks To Team Members

Susan: Did you have any clarity after hiring your data person? Were you like, “Oh, now I’m addicted. I have to do more.”

Megan: There are a lot of sayings about business ownership. One is that it’s really hard for the business owner to let things go. I’m a mom of multiple children and have been a single mom twice. Letting things go is not hard for me. Instead, I’m just like, “Here, take it.” I have only so much capacity.

Delegating is something that I like to do. Sometimes though, the biggest thing with me that’s been a challenge with delegation is thinking I can do it [the task]. Not that I don’t want to give it away, but it’s like, “Oh, this will only take five minutes.” I can do it really fast, except I’ve got 20 million of those five-minute things. So then, nothing ever gets done. I have to put it more into practice, not because I don’t want to, but because I have realized that there are things that I just shouldn’t be doing. There’s this whole pile of things only I can do, and if I’m focusing on this other stuff that somebody else can, then I’m not focusing on what only I can do. That’s what’s helped me, knowing that this [task] isn’t my job anymore and somebody else should be doing this. That’s been something that’s helped with delegating things out for me.

Susan: When we say that to those tasks, we say, “Oh, it’ll only take me five minutes.” Then it’ll be a month later because you have yet to have five minutes. You jump into it, and you’ve already forgotten what it is. You don’t know how to do it anymore, and now this five-minute task is delayed a month, and it’s now taking you an hour by the time you go back and remember all the things you have to do about it.

Jamie: Or you keep working on the five-minute tasks and never work on the opportunities that will grow you.

Susan: Absolutely. That is spoken like a true visionary, Jamie. The other thing that we sometimes get addicted to is looking at all that we’re accomplishing because we’re checking five-minute tasks off our plate, or we’re trapped in email, and you’re going through all your email. I’ve accomplished so much until you look back and say, did I do anything that moved the business forward? Probably not. It just becomes more responsive and reactive.

Megan: That’s a great segue into what we’re going to talk about now is about delegating and how you decide what to give away and how to give it away, and to who to give it. You mentioned the spreadsheet, which is a great base for that, but what would be the next step? Do you have any suggestions for us, Susan?

Susan: The spreadsheet is a great base for that. Many people don’t like to do it because, as business owners, we don’t like to track our time, even though we ask our teams to do it. You don’t want to, but that’s not what I’m talking about. You don’t have to track your actions every five minutes. Write the gist down. The more details you can put, the better. But you don’t have to capture everything the first time.

The first time, the things that are going to come to mind are those things you hate doing because you’re like, “Oh, I’m going to totally write this down,” the things that might be tedious to you, so maybe you don’t hate them, but it takes you a long time. Those things are often going to come to mind, and those are the things I recommend you give away. If it’s tedious, it means it’s probably repeatable. Anything repeatable is easy to delegate. If it’s something you hate, by all means, there are plenty of people out there that love it. I don’t like bookkeeping. Some people don’t like project management. Other people don’t like process development. That’s why Megan and I are here to serve those things. So for all those things you hate, there is someone out there who doesn’t hate them and who’s better at it than you.

The big one for me to give away was my web development. I have a background in some software. I’m very tech-forward and tech-savvy. So I always said, “Oh, no, I can do it. I can figure it out.” Well, I could or could call the person who knows and have them do it instantaneously. Giving that away was a big one for me.

The first step is, where can the experts come in and make your life better and do all these things faster with less drama and less delay? That’s one of the first things I say, give away. The other thing you’re looking at on that list is what you should not do. There are things on that list that you shouldn’t be doing, let alone giving to someone else. Just stop doing it. And so that list sometimes helps you question, “Wait, why am I doing this? Or why am I still doing this?” When I started my business, I always checked XYZ every day because I was worried about how that would look. Well, four or five years later, that’s no longer a factor that matters.

Always asking why you’re doing the task is helpful. One thing you shouldn’t be doing is surfing on social media. Take that off your list. If you’re on social media, go on there with a purpose and an intention to move your business forward.

Jamie: I have a perfect example to share regarding this. In the product-based world, social media really matters. At the end of the year, I looked at direct website conversions, and I have two people on my team who have a big part of their jobs in social media; less than 1% of our conversions were from social media. 21% of our conversions were from our email strategy. That helped me see that it all matters, but we spend a disproportionate amount of time on social media. So we pull back on there and invest in the things that are paying off.

Susan: That’s a great insight. It could also be how you’re spending your time. So if you spend all your time building networking relationships but don’t get any leads from networking relationships, you either need to change it and do it a different way or stop and focus on where that’s coming from. It could be coming from SEO, or it could be coming from great reviews online. It could come from strategic partnerships with other products instead of people. Also, look at how much time you spend on things, and you can balance that out.

The next team members start to come in more as you grow your business. The first team member is one thing, but what about the others? As you grow your business over time, you’ll start to know that I am the company’s visionary. I have to drive it forward. Most small business owners also make sales as part of their role. Whether you like it or not, there’s nobody better at selling your business than you are. That’s one of the things, unless it’s something you cannot stand and you’re horrible at it, that I suggest is the last thing to let go of. It takes longer. And man, that’s a significant trust factor to trust somebody to keep feeding your business new, more business.

That’s one I’d say hold onto, but the others, you start to say, “Okay, I’ve been doing the consulting and then having my team implement, but now I’m getting behind because I can’t keep up with the consulting because we have so many clients.” So now you’re in the state of how do I hire a higher-level team member or how do I teach them my way? That becomes a bigger challenge to give that philosophical part away. It’s more “This is how we do it.”  As you’re doing that, as a visionary, pushing your business forward, you are pushing it forward because you’re establishing your brand. This is how Beyond the Chaos does it, not how Susan does it, right?

All of these things are interruptive things, and you’re reacting to something that seems urgent, but that’s usually not. From that standpoint, you’re taking that next step up. That’s another growth step. So what to give away can depend on your stage, but please stop checking your email. Please leave your email closed. Please don’t answer your phones. It can usually wait.

You are figuring out how to put those things and social media aside so you can focus. I know many people don’t like to give their email away. There are virtual assistants out there that crush it. They can manage your calendar and email. Now, I usually check my email twice or thrice a day. When I go in there, it’s only stuff that only I know the answer to. Otherwise, they’ve already dug it up, responded, shared the information, and kept everybody moving. If there was an emergency, they let me know in Slack. This keeps me out of email, which is a big one so that I’m not sucked into it. Anytime you can stay out of it, the better.

Some people can do those things well, but others can’t. That’s part of our fear of giving things away. Is it going to be done at all? Is it going to be done to my expectation? Right now, we have so many fractional-type people that are perfect for small business owners to tap into this vast experience. An experienced virtual assistant, an experienced project manager, an experienced bookkeeper, an experienced CFO, COO, all of those C level, you’re able to get experience that you could never grow in a small company, you could never afford in a small company because you can get it fractionally from people that are working that way on purpose now, which is excellent. Those are the types of things to give away. 

However, how you give them away is also challenging. Let’s say you were going to hire a virtual assistant to check your email, and you just said, “I need my virtual assistant to check my email.” That’s a little vague. How are you going to communicate with each other? How can he do more to take that next step to respond? There’s an exchange of information that has to happen.

In our case, we have a process document, and every time a question comes up, the assistant puts the answer in the document so that she can come back to it and remember, oh yeah, that’s how we did it last time, or this is how Susan wants these responded to. That one has many details, but it works and grows over time.

As you develop that relationship with that VA, they will ask you the right questions, and you can give them more and more power. While you’re giving them power because you’re creating this document, you have all the answers for the next person if something happens to them. They’re not starting so far back. They can start closer to where that person is.

Hiring Fractional C-Suite Positions

Jamie: Can you speak more about the fractional kind of C-suite positions? I’ve been toying about a fractional CMO and what that can look like as smaller businesses start tiptoeing in that direction because that is a bigger investment.

Susan: It depends on what you need and what you’re selling. But yeah, a CMO makes a huge difference. One of the first fractionals I got was a CMO who could direct everything. If we needed to execute, we had team members who could execute certain things, but the concepts and the overall picture, which I could bring (I have a marketing background), but I couldn’t focus on it. I’m focusing on other things. So it was piecemealed, right? I’d say, “Oh, that’s a great blog post. That isn’t in the flow of what we’re trying to convey. It didn’t have the right strategy behind it.” So CMOs can range, some will target very small businesses, like mine. Others will target bigger ones. So you have to choose the right one, and they will be priced accordingly. 

There’s C-level HR that can help with some very inexpensive things, like ensuring you have the right handbook and that you are following the rules of whether they should be 1099s or employees. It doesn’t have to be a forever engagement. It can be a, “Hey, let’s get things set up, and then can I call on you in certain situations if I need you?” So, how you set up those relationships is essential. But then, how do you give them away? 

When I talked to my fractional CMO, a lot of what we talked about was everything had been in my voice, so how do we continue that voice so it doesn’t look like things changed? She gave me an exercise, and she totally nailed it. After we did the exercise, she had it because she’s a professional and knows how to do that. That is important. It is also important to trust that those fractionals come with that experience, especially at a high level. To give tasks away, you need to process them. And so many people say, “Oh, I hired somebody, but they didn’t work out. Oh, okay, how many times did you do this? Oh, well, we’ve had five virtual assistants, and none of them are helpful.” It’s like that because you don’t have a written process they can follow. They’re waiting for you to tell them the next thing. If that’s the case, you might as well do it yourself. That old saying that I might as well do it myself becomes real.

If you have processes written for how to check email and manage a calendar, what do we do when a networking partner refers us to someone? What do we do when somebody says we need to network with these people? What steps should we take, and how can they help get the right meeting on your calendar at the right time without overwhelming your day? Those things can go into a process document, which is imperative. If you don’t have those, you are setting yourself up to fail. 

The other part of that, which ties into who to hire, is a job description. What do you need this person to do? “Help me.” “Help me” is not going to be a good job description. Help you what? What do you need them to execute for you? Put it in a job description. My job description for my VA has some personal assistant tasks in it too. When hiring, ensure that that person is okay with being asked to arrange your dog’s boarding when you go on a trip.

I don’t have a problem mixing those things. Business owners should not because eliminating that means they have time to focus on their business. So some people like to keep those things very separate, which is fine, except a business owner’s life is not separate. It’s all very merged together. Do all those things that you can delegate out, even if it’s personal tasks. We have a process for how my VA books our travel, and if my husband’s going with me, where do we sit on the plane? What side of the plane do we like to sit on? What airline do we travel on? Is there a hotel chan we like to stay at?

If you can keep all that stuff in a process dock, then the person can absolutely execute it. People want to succeed, but if you’re not giving them the tools they need to succeed, it will be really hard for them to do it. The who comes from the job descriptions. As you start to write those job descriptions, you start to say, “Oh, well somebody who can post my social media might not actually be the same person that could write my social media.” As you start to identify those things, you should be clearer about what roles you need. As you decide that, you can say, “Okay, maybe I don’t need a CMO. Maybe I need a social media expert.” That helps you figure that part out too. 

Another area you can look into this is invoicing. A lot of clients hate invoicing. Megan, I’m sure you run into your clients behind on invoicing. A lot of them hate it. And so part of it is, why do you hate it? Let’s figure that out. Is it because you’ve made this convoluted thing that takes so long to do, and you can’t stand it? How can you simplify it?

We work with many software developers, and they’re like, “I have to send my clients all the hours. I have to send them a detailed synopsis of everything we did every 15 minutes to invoice them.” I’m like, “Do you? Or is that the expectation you set for them? Are they looking at it?” My guess is no. It’s too overwhelming for them. So change your process to send it only if they ask, and you can get through those invoices faster. 

I establish a process around that, which always happens on Mondays. My team does this for me. I don’t do it. They send me a list. They say they’re going to bill these people. I get to say yay or nay, and they do it, and it’s completed every Monday morning. That’s how we start our Mondays. Are there specific things when you bill a client? When do you not bill a client? Who do you ask if you’re in doubt? All those things. That’s something that I actually don’t hate. Some people do. 

Jamie: I love it. Show me the money.

Susan: Right, show the money. That’s always been mine, but plenty might want the money, but going through the pain to get the money is not worth it. 

How To Onboard Team Members

Susan: Those are the types of tasks to give away and how to figure out who to give them to. Then once we give them away, how are we making sure that they’re doing it right and they’re doing it consistently? You have to figure out the right delegation. 

One way to delegate for sure is you have to train them. You can’t throw them to the wolves. You have to train them. One way is for them to watch me do it. That could be in video form. You don’t necessarily have to have them standing over your shoulder. You could make a Loom. Loom is a very cool tool that sits on your desktop, and you pop it to record, and it picks the right screen, and you make a little mini video. We do a lot of things that way. I have a virtual team too. Nobody’s in a common location, so if you show them something, that’s the only way to do it. So watch me do it. That’s the first step. 

The second step is I watch you do it. So they could do it the same way. They could make a video of them doing it, or if you’re doing it together on the screen where you can see it, or if you’re physically there, you can physically watch them do it. And then the next step is for them to go ahead and do it, and then you will check it after you do it. You’re making sure that you got the same result. At that point, they should be good to continue on. You should spot-check here and there initially and ensure the invoices were sent correctly. 

One of my favorites is if you pay with a credit card, we charge the 3.5% our bank charges us. Well, the VA did the math wrong and sent the invoice out with the wrong amount. It was 0.03% instead. I was literally thinking to myself, “Why would I have charged somebody $5?” I would’ve eaten that. But the $55 was a different story. We had to eat that, but we were able to catch that the first time she did it because we have a check in place, she puts the totals in Slack. I could quickly go, “That doesn’t look right.” From there on, we could make sure that it was done correctly. We just had one mistake. Not the end of the world.

Those spot checks and those ways to verify dashboards are really important to ensure things are going right. The other is staying in touch with your team members. Are you meeting with them regularly? When I have a new team member, I meet with her every week for the first month while she’s working with a new client for the first time. After that, I meet with her monthly. We’re always talking in Slack, and I check in regularly on each client individually, usually monthly, to get more specifics about that client. Those checks and balances that you put in place are important. You can’t just say out of sight, out of mind, because it’s still your responsibility to ensure it gets done right. But you earn that trust over time by having the people you trust in the right places. You start finding that people don’t make many mistakes. When they do, it’s usually not anything catastrophic. So that’s my, what should I delegate, how to do it, and to whom.

Megan: So it really does go back to that basis of the Excel sheet, especially if you’re just starting to figure out how to add people, because that’s really going to help you identify a few different things, like how you want to have it structured, what you want to give away. And then who, so you can start putting together those job descriptions and how all the pieces and positions will fit together because that’s part of it. Instead of having a CMO, have the assistant and a social media expert to create the end goal of what you’re moving towards. That’s one thing I’ve learned, when you are talking about management, you’re not doing the things anymore, but you’re managing the people that are. So really, setting up that process is a huge part.

I had to go back and put that together a few years into having a team because this is the stuff they don’t teach you or you don’t know until you start doing it. So many of us haven’t thought about any of this stuff until it gets to a point where it’s like we have to, we have to start adding these people, and we have to start putting these processes in place. So if you can start focusing on your time and where it’s going and what you want to be doing or should be doing versus what you shouldn’t or don’t want to do, then you can start getting all of those pieces to put into play. So super, super helpful information. Thank you for that, Susan.

How To Budget Team Members

Susan: Absolutely. And as you start to do it as a business owner, you start to get addicted to this. I mean, there’s sometimes that you’re like, “Yeah, I don’t want to do that. Who can do it for me?” I think Megan, at this point, you can probably jump in and help us figure out how you budget for this. Because you can’t just give everything away on the first day. You can’t afford it. You still have to have a viable business. So how do you budget for it, Megan?

Megan: Yeah. There are a couple of different strategies or methods you can definitely do this part as well. One I think is really crucial is figuring out how much your time is worth. So figuring out how your time impacts your business from a money standpoint, like Susan said, usually, the owner is the salesperson. By now, if you’ve been in business for a few years, you probably know how much effort and time it takes to bring in new clients. You might not know the exact numbers if you haven’t been tracking it, but you know might know I got to – at three networking meetings, or I got to send out ten emails, or I got to do X amount of whatever in order to bring in new clients. Maybe it’s revisiting your newsletter list, email list, or contacts you’ve met along the way and just checking in with them. You can do many different things to generate leads, and you probably know what that looks like for you. So that’s how you start to measure what your time is actually worth. A lot of times, it will be somewhere upward of, I would say, probably at least upward of $50 an hour, 50 to $100 an hour minimum from a really low period. That’s generally what an owner’s time is worth bringing.

Susan: And Megan, that’s even if that’s not what you’re paying yourself, right?

Megan: Exactly. Exactly.

Susan: That is still what your time is worth.

Megan: Yes. But just for all the people that are like, “Oh, my time’s not worth very much. No, it’s at least $50, if not more than that.” So when you start thinking of it from that perspective, and you start thinking about, okay, when I add in this person to do my email management, after tracking my time, I know I spend six hours a week minimum on email, and I can hire a VA and pay them $15 to $20 an hour to do this, and I get six hours of my time back. And that’s kind of how I start to encourage people to start looking at it because when you can start putting amounts on the positions, then you can have a better idea of where your time’s going and being more intentional to it and how it’s going to turn the sales. So that’s one way to start initially thinking about it, looking at the numbers, and seeing, okay, I can do this.

I also always tell people to think about it, not from an annual amount. If you’re going to pay somebody $35,000 a year, that equates to a lot less per week. That’s about $670 a week. And so that becomes much more tangible to say, okay, it’s not $35,000 that I need today. No, it’s only $673. That starts to make it more tangible. I can afford that because then I’ll be able to spend my 20 hours a week or 40 hours a week doing more business-related stuff to bring the sales in. That’s a great way to start thinking about budgeting for this.

If you also want to see how it will impact your operations, you can start putting that amount into a separate savings account. And that for a lot of people that get really nervous about hiring people, and they’re like, I can’t do it, pretend you are. Pretend you’re hiring that person, put that money away, and see how much it impacts your operations. And a lot of times, people are very surprised, and they’re like, oh, I actually can afford this.

Then you also have the flip side of that ROI because when you hire a person that’s now doing that thing, it will increase your value and sales number at a certain time. So then it becomes an ROI instead of just a savings number, but do it for a month, and then you get a month’s worth of pay put away. Or if you want to do it for two months, do it for two months and pretend to hire somebody. You can pull the trigger once you’re ready for it with a little bit of a savings nest egg put away. And that’s really the basis of a strategy for how to hire somebody. But in terms of budget, going back to the basics, you have to make sure you’re profitable too.

So knowing where your numbers are at from the get-go, making sure that you have a profit margin, that’s going to change a little bit with hiring somebody to be able to afford that and make sure that it doesn’t make your margin lower, is that by really hiring is an investment.

If you do it and like the pieces, processes, and little details that Susan laid out for us, hiring is an investment if you do it that way. It’s the way to grow. You can’t grow and then hire. You have to hire in order to grow. It’s like it’s part of it. It’s the thing that happens before the growth, not after you got to do it strategically. And I mean, don’t hire ten people simultaneously unless you have a solid plan. But hiring a person at a time or a couple of people at a time to get things off your plate is definitely the way to go. For sure. And those would be my suggestions from a money standpoint for that.

Susan: And for service-oriented businesses, deciding whether or not that person is billable to your clients is a big deal. So are they pure overhead? A virtual assistant is usually pure overhead. A bookkeeper is pure overhead. A project manager can usually be billed by your clients to their clients. So even your clients are thinking, okay, yes, I’m charging you my client for this project manager, but then you’re also charging your clients, so it’s not even overhead to them when it gets to them. So thinking about it from that standpoint, too, is it overhead for your business or money-making for your business? I can’t make money without my team. I have to have them go and execute the work so that somebody pays us to do it. Megan, I know your team is the same way.

Megan: Right. Yeah.

Susan: You have to have them.

Megan: We have that conversation with our clients too, and they’re reporting because we do like to pull out the cost of services or goods. In labor, that’s directly related to producing the products and services should be tracked as that metric because then you can pay attention to your growth profit margins. And then that’s something that can get tracked and making sure the rest of it… The rest of your margin supports all that overhead. So that’s a great differentiation on that point, too, is that some people are going to pay for themselves, of course, they’re going to bring in more clients versus just being an expense.

Susan: I have a perfect story that ties into knowing your numbers and working with people who will be billable to your clients. I have a client, and we’ve been working together on systemizing what they sell so that they can sell things that are repeatable and that they can have some more structure in their business. Well, one of the things that came up in our conversation the other day was, do they have the right people in the right seats to execute this work for their clients? And so we started talking about that part, and I told them, “Look, the project manager they have seems more like it might be a virtual assistant just executing. A great project manager’s going to change your whole world.” They said, “How many hours do we allocate for that?” It’s usually about 20% of the billable work.

That’s a rough number to estimate if you’re looking for a project manager. And that’s for pretty much anything, whether it’s software development, marketing, creative, anything like that where it’s a deliverable like that, your project manager’s about 20%. And so I asked them, I said, “Well, how many billable hours do you have every month?” And they said, “Oh, it’s about XYZ.” I forgot the number, but it wasn’t huge. I respond, “Okay, great. I think your project manager could probably work six or seven hours a week, and you’re done.” And they’re like, “Ours is working 50 hours a week.” And I said, “What is he doing?” And so we started, started pulling numbers. They were running so many internal projects that were pure overhead that it was three times as much as what they delivered to their clients. They were using these people to keep them busy with this internal work. And I’m like, “We’ve got some adjusting to do.” That goes to knowing your numbers if you are unclear on your numbers, income, and where it comes from. If you’re running a business that has a billable hour, that is one of the numbers you need to know every week. What’s billable? What’s non-billable? Huge importance. Being able to change that is going to have a huge impact on the success of their business, a huge impact.

Megan, when you said, “Yeah, you got to know your numbers,” I remember when the first time somebody told me that. I’m like, “I’m going to know them. Okay, I’m going to know my numbers. What does that mean?” I worked with somebody to help me figure out what are the triggers in my business. So there are things I look at every week that are things like, and Megan, you mentioned this, how many calls am I on versus how many proposals do I write versus how many do we close? I know that percentage now. I didn’t know it before. What is the billable versus non-billable hours? What is my overhead this month? Ours can fluctuate because every now and then, we’ll have an internal project that gets tied in, and sometimes you have three paid parades in a month, something like that. So your overhead can fluctuate. And so, how do you accommodate that? How do you get an average over time? How are you charging for whatever you sell, whether it’s a product or a service? Are you charging enough to cover all of that? Will the market bear more, or do you have to cut costs? Figuring out all that stuff greatly impacts knowing who to hire and when to hire them. Hugely impactful.

Jamie: Being comfortable and saying no. In the beginning, I did everything for everyone all the time. And part of that is just in starting a new business, you’re gaining brand awareness, you’re gaining customers, and you do all the things, but then you reach a point and especially when your value of what to say no to, right? In the past, if anybody asked for any kind of customized product, I would say yes. Even if it cost me $50 to make and they gave me 10, I would say yes. And so doing some internal work, some energy work, and knowing it’s okay, and actually, it’s a great thing to say no when it doesn’t serve you anymore. And I think it too, for me, I worry about losing customers if I don’t do all the things. But then really stepping back and like what we just said, let’s say a customer wants to meet you for a coffee, and let’s say that’s two hours, an hour to meet with them, a half-hour too, right? That’s $200. And then not only do I think of it in terms of finances, but I also have a really big mission with my company. And if there’s a huge energy discrepancy, I show up, and I show up in a big way. And let’s say that person is kind of down here energy-wise. Then it’s like rebounding, and I’m unable to pour as much into other people. So that’s been my lesson of the year so far: how to say no.

Creating Successful Processes

Susan: That’s a big one. That is a huge one. And especially when it is not making you money. My first big no, Jamie, was we bill in advance. We do not bill in arrears to our clients. So we basically establish buckets of hours that then people, we work the hours off. And that was my philosophy from the beginning. I don’t want to be a money collector. I don’t want to be mad at my clients all the time because they’re not paying their invoices. So we did it this way. I’ve allowed three people ever to talk me into taking money in arrears, and the last one was several years ago and will not happen again. It’s awful. And if you say no and they say, then I don’t work with you, then you say, thank you for saving me the trouble. Now I have now made a spot on my roster for a better client. Yeah, it’s hard at first, but it pays off in the end.

We talked about creating processes but didn’t talk about how to create processes because that’s a big deal. How you write them, store them, share them, and manage them, which is the big step. That’s when you’re now a process-driven business is when you’re managing to them, is really huge. Many people say, oh, I just made a bunch of videos. Okay, well, that’s a great way to start. It’s absolutely a great way to start.

But if the software changes, and they do all the time, if you’re using SaaS software, they’re updating, modifying, and changing it all the time. Or if a team member comes up and says, “Hey, I don’t understand why we’re doing it this way.” And you start talking, and you don’t understand either. Let’s fix it now. You have to rerecord the video instead of changing two words in a written document or a templated checklist.

Starting out with a video is great. But then get them transferred to a written format, whether that be a checklist or pros. I recommend checklists. If you can ever push them there first, do that. If it requires more pros surrounding the why and that kind of thing, then do that too.

For example, how to check my email that’s almost impossible to be a checklist, but it’s great to have all the notes written there that they can glance back and forth at. As small business owners, we’re talking about hiring new people, right? How do you hire? How do you onboard them? Those processes ensure you’re doing it the same way every time. Even though you’re like, well, I’m the owner. I’m just going to decide if I like them or not. Okay, that’s great, but you have nothing to measure if it doesn’t work out. What do you have to measure it against as far as what questions you ask them? Maybe you should have asked them something that now you’ve discovered several months later. Those types of things that if you have a process of how you’re doing those, you can update that and pivot to what you need to create long-term.

The other is onboarding. How do you get this person into all the software you have? How do you get this person trained? Are there things they have to learn? Do they have to read a certain number of processes? And how do you make sure that they do it? That definitely can be a checklist. And here’s a more important one. In these days where we give the keys to the kingdom and that we’ve invited them into all of our software, how do you offboard them?

That could be an emergency. If you discover that they are secretly creating a competing business, you want them out of your CRM quickly. So making sure that you have that checklist to go through. So those types of things are things to think about. Also, transitions. If you as the business owner or the salesperson, how do you get the proposal out? How do you follow up and make sure that it’s signed? How are you making sure they received it? When are you invoicing them? That’s a process. And it’s a process you can delegate. So all of those things, write them and then store them in a central location. It can be in your project management tool, which you should all have. It can be in a Google Drive if it’s done well and it’s well-structured. It can be in a tool like Process Street, which allows you to track all processes as well as some checklists. We are a partner for Process Street, and we’re a big fan, but we will push people towards using their project management tool if at all possible, even if it’s to link it. So if you’re onboarding somebody and you want them to read processes, pick the URL from your Google Drive, put it in Asana as a checklist, and you can go there and send them there to look at it. If you’re doing that, add some accountability into the onboarding as well. So hey, new hire, go read this process. Next step, new hire, show me that you added Grammarly to your Chrome to proofread things. Give me a screenshot. So you can put some accountability into those steps too. And you can then assign them if they’re in your project management tool to the person when they come on board so that you’re following this every time. Big fan of using your project management tool for these things. But Process Street works great, too, if you want to look at that. There are tools like Trainual, which is pretty expensive. That one lets you give tests and things after they’ve reviewed something. So storing them in places like that are great. Making sure that they have done it, that they can execute it, and that they get it.

Also, what do you do when you update it? So something’s changed, and it’s updated. If you update the process without telling anyone, it doesn’t help. It will help the next person that starts that you direct to that, but it doesn’t help the current team. So you need a process for updating processes. How are you rolling them out? How are you making them aware of the change? Everyone laughs when I say that one because it seems redundant but really important. In our favorite project management tool, When we keep all of the processes in notebooks, when you update the notebook, there’s a little box to check that says to notify what the changes were. And so when it goes out to the team members, they don’t have to read the whole thing. They can read what changed. And so if you’re not using a tool like that, you must devise how. Here’s a 12-page document. It’s updated. That’s a lot unless you think that they probably need to read it again in some cases. So make sure that that’s the case.

Then you have this body of process of how your business is running, and when something doesn’t come out the way you expected, you have something you can blame instead of making the person wrong. So you can say something to the team member like, “I was expecting invoices to go out this morning by 11:00 AM, and it seems like that didn’t happen in the process. Is there something that’s going on that we need to fix?” It’s not that you didn’t get the invoices out by 11. It’s wrong in the process that it didn’t happen on time? Now it could be that they didn’t do it, and now you’re much more able to hold them accountable. It could be that something’s changed. Guess what? I went in to look at that this morning, and our software is managing this differently than the last time I looked, and I am struggling. The reason it’s late is I’m struggling to figure out the changes. Fantastic. When you figure it out, let’s update the process and then get the invoices out.

You’ve established that there’s a change and identified that it should be updated, not by you. Did you see how I did that? You make it, you update it, and now you have a better business management process, and your team member feels like they’ve been involved instead of blamed. So by running it that way, that accountability becomes just part of what you’re doing all the time. And so they don’t feel… And you don’t have to worry of, oh, there’s going to be a big confrontation. I know a lot of people will shy away from that. They don’t like that. Well, this is a great way not to be that not make it feel confrontational but still be able to get where you’re trying to go.

How To Transition Your Team to The Next Phase of Growth

Megan: I liked what you said earlier, too, about it becoming more about the company versus like, and as an individual, that’s really been a shift that’s helped to figure out who we need, what those people need to look like if we need to change, because as your business journey evolves, sometimes the people that you have aren’t necessarily those people that take you to that next level or aren’t a good fit for the position that they’re currently in and how to make it so that it’s not personal. That’s been a shift that’s helped me and is helping me to do that kind of. And can you speak to that at all, Susan, about when you have a team that you started with? Is there a time and how do you do it when you start to think, is my team the right one for this next phase of growth, and how do we shift and transition through that?

Susan: So we all know the answer to whether somebody’s right or not. We might say, oh, I don’t know, you know. You know it’s not getting done. You know if there’s frustration. It might be other team members are frustrated by them. That could be part of it too. Those are your leading indicators. Now, if you want to try to coach the person to improve them, that’s the other thing. But you also have to know, are you asking somebody to do something not in their wheelhouse? And they’ve usually been there by the time you reach that point. You’ll know, not going to be in there. You’re not going to make your assistant that started with you be driven and ambitious to do what you do. I hear a lot from business owners is they don’t work as hard as I do. Well, of course, they don’t. They’re not as ambitious and as driven. That’s why you’re the business owner. So you have to cut them some slack there.

Setting up some performance matrix or metrics so that if you hire a salesperson to make cold calls for you, you expect a certain number of calls to be made every day. Or maybe a better thing to look at is whether you expect a certain number of appointments to be on your calendar every week or month so that you have more of a performance indicator than I called everybody. Okay, well, that really doesn’t matter. How many people you call really doesn’t matter. It really matters. How many good leads did you get me on my calendar? So that’s all part two of having that structure of job descriptions. If you don’t have the job descriptions to start, it’s really hard to hold them accountable for the job description. Most people will exceed expectations if they know what they are. So making sure what they are is important. If you know what they are, you know what you’re interviewing for. And worst case, if you’re on the fence, interview some people for the job. You don’t have to let the person go yet. Interview some people for the job and see what’s out there. Your eyes might be very open now that you can afford a little bit more. Now that the job description is a bit more challenging, you might be surprised by what’s available to you. And now you’re back to that, I can’t afford to keep them.

Susan: Do it with grace. Do it with understanding. Don’t be mean, but sometimes you have to let people go and find a better fit for them too. All of this is important to set up, but maintaining it is just as important because putting processes, job descriptions, and structure in place is hard work. If you think it’s done and you’ll never touch them again, you’ve wasted a lot of money and time. So making sure you have that way to keep going. We’ve had to come into clients that had a whole bunch of processes. Oh yeah, those were written two or three years ago, and they haven’t looked at them since. Nobody’s being held accountable to them, they’re not being updated, and they must start over. And that can once again be painful and expensive.

Megan: Yeah. Yeah.

Susan: That’s my wrap. Keep up the good work after you’ve started it.

Megan: Yeah. Yeah. It’s like everything else in business, right? It’s like an ever-evolving and refining process. That’s one thing I’ve learned in the nine years I’ve been in business, it’s like, it never stops, it becomes more fine-tuned and more honed in and more focused on, and that’s just as you continue, that’s definitely how to go. So I always like to end with a tangible takeaway. So if nobody’s ever thought about hiring, processes, or delegation, what is the one thing that somebody can take away from watching this? If they have a team or don’t have a team, what is kind of that one main thing that they can start with so they can start the process of really getting this lined up?

Susan: Do that activity spreadsheet. I don’t care how. If you’re brand new to it and have been doing it for years, do it regularly. The bottom line comes down to this: as the business owner, you are always the bottleneck. Always. So find those bottlenecks and hand them off. And you can’t do it if you’re not examining what you’re spending your time on; you have to do that. So set something on your calendar to do it quarterly or something, and you’ll be amazed at how much time you free up.

Megan: Is there a recommended amount of time?

Susan: Of how many of those things you took back on?

Megan: Right. Is there a recommended amount of time for you to track your time through a week, two weeks, or a couple of days?

Susan: You can probably do a few days if you do it regularly. The first time you do it, you probably will have to spend a little bit more time, maybe a week, and then also brainstorm those things off, yeah, but I also do this monthly, and I do this quarterly, and I do this annually. You’ll have to brainstorm some of those things but trust me, the first time you do it; you’ll come up with so many things that you hate doing that they’ll be on your list. Those are easy to give away.

Megan: And you’ll probably have a lot of realizations. I remember doing this for the first time, and I was like, “Oh my gosh, I can’t believe I’m spending that much time in my email.” Now, my executive assistant does all of my emails looking first and then transfers the stuff to me that I have to only look at or that I can only answer and look at. And it saves me a lot of time.

Susan: Oh, life-saving.

Megan: Yeah. So you’ll probably be a little surprised at how much time it’s like the money thing once you start tracking your numbers, you’re like, “Oh my gosh, I’m spending this much in this area.” It’s the same thing with time.

Susan: What did I do?

Megan: Yeah. Time is money, right?

Susan: Definitely.

Megan: Well, thanks so much for joining me. Jamie, since you’re on, do you have any questions? Yeah.

Hiring Vs. Outsourcing

Jamie: Yes. I would love, in both of your experiences, what are the things where you’ve hired employees versus outsourced. What kind of activities? And I know it varies based on product or service and just what industry you’re in, but for your experience, where have you hired versus outsourced?

Susan: So I look at specialties as outsourced. Our web guy is outsourced. I don’t need that on my team. I don’t need to manage that. I need to be able to say, “Hey, help me on this day.” My marketing, and my CMO, are outsourced. Now, if you run a marketing agency, maybe a different story, but I don’t need a marketing person on my staff. I look at it as on my team, I want the people who perform the core of my business work. So I want project management and operations experts to help the clients on my team. The rest, the peripherals, can be fractional, and hey, your team members… My team members are almost all fractional as well. But the peripheral, too, the core of your business, is where I look a lot at bringing in those. My HR is fractional, my bookkeepers fractional, you have those that that’s not what I do. On the other hand, Megan, you don’t want to have fractional bookkeepers.

Megan: No.

Susan: You want team members, right?

Megan: Yeah. To me, we have fractional people or outsourced people for marketing, our IT people are outsourced, and HR is out outsourced as well. We have hiring- or kind of like a COO consultant, if you will. They help us with hiring and job descriptions and that strategy piece of it. And also helps my manager manage people because I’m a visionary, and I have a really hard time managing people. I can do it, but I’m not as good as her. And she is an employee. And then our bookkeepers are all employees. I think of it from a perspective of what I need to have a need and want to have more control over and more influence over. Because having somebody that’s outsourced, they are not going to be as invested in my business because they have their business. So who do I need to be invested in? Who do I need to have more control over, like how they’re delivering and communicating and working and all of that? Those are all employees. And then everything else usually gets outsourced at this point, like marketing. I was thinking about bringing in, but then I ran into the issue of having a social media versus a copywriter versus a strategist issue, which is then why I decided to go with a marketing firm that had all of these things under their umbrella, which was kind of more of that fractional CMO because there’s a lot of expertise there that if I were to hire and I’d have to hire probably four different people, and we’re not at that point yet. So thinking about it from that perspective helps a lot to figure out who needs to go on what seat. So, great.

Susan: If you’re looking at assistant-level work, it can be either or, just depending on who you find. I have outsourced to two teams. Trusty Oak, by the way, is a fantastic group to get assistants from. One of the beauties of going to a firm is that if the assistant that works with you regularly doesn’t know how to do something you need to do, they’ll pull in another assistant to help with that task. So that’s beautiful if you have that. If you find the right person, my virtual assistant, I found her as a high school student who came to be an intern for us, and she actually has now stayed as our VA in college. I kind of lucked into being able to hire her, but she’s an employee and part-time, but an employee and that works great too. So the advantage of that is that it’s less expensive than the firm. The disadvantage is that I still have to go find somebody, which she doesn’t know how to do it. So that can go either way.

Jamie: Right. Thank you.

Megan: And that’s kind of, I think you have to weigh the pros and cons of the different scenarios of what you want to deal with and what you don’t want to deal with because it’s going to be different for everybody. And then really getting those processes in place, even for contractors or outsourced, what are the expectations? What are their commitments? What are your commitments? Just really getting clear. And I think that’s really what comes down to a lot of this making sure that the communication is there. Make sure you have great internal consistent communication to manage the people in those positions so that they can succeed in their job because they want to be successful. You want them to be successful. And the biggest way to communicate that is through those processes and KPIs, and keeping it from a company perspective is what’s helped me a lot as we’re still establishing many of these pieces. It’s a work in progress, but those are some of the things that have helped me.

Susan: It’s always a work in progress.

Megan: The beginnings of the work in progress.

Jamie: I appreciate, Megan, what you said. So marketing is integral to a product-based company, right?

Megan: Yeah.

Jamie: It’s our bread and butter. But what you just said was an aha moment to me is that when, and I would, of course, love that person on my team, but what you just said about the person who has access to those other very important positions like the copywriter, like the graphic designer, like the… All those others supporting your marketing efforts are huge advantages when working with a larger agency.

Susan: I think the other thing to look at there, too, when you’re looking at those higher level people, you hire team members to work for you, they are now only working for you. If you’re hiring fractionals, they’re still working with a bunch of other people. So the ideas that they are constantly being bombarded with make them better, well-rounded team members, and they can be team members even if they’re fractional because they’re having all of these experiences outside of your small world.

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