A bit of backstory. He started his business as a side hustle. Generated some revenue and started making a name for himself. This has lead to getting bigger jobs and more requests but not having enough time to take them on.
No business wants to know that they’re leaving money on the table and sending potential clients away to their competitors. This realization is what leads to the question of do you continue to pass on the projects or hire to take on more work.
There are several ways to address this question. My first thought was can you afford to hire people to take on more work. I’ll cover this question this week.
Things to consider first and foremost. The financial aspect. Determining how much to charge so that you can have enough to pay the employees. Pricing can get tricky because you have to stay competitive.
A good way of narrowing down how much you’ll earn and how much you can afford to pay. Would be to use the 33/33/34 principle. Whatever your standard pricing for a job. Deduct 33%. This goes to the business. The other 33% is what you pay yourself. The final 34% is what you set aside for taxes.
Now that you have a set of numbers that you can work with. Do the math. Are you going to pull the employee Salary from the 33% going into the business? Will you take less money salary-wise to cover the expense? Will you pull from both and count on volume to make up the difference?
Either way, you have to take a look at how much you can pay the employee. It would need to be enough to be competitive to get someone qualified and experienced. What you skimp on with experience you pay for in make-goods if or when issues occur.
There are advantages to taking on more projects but you also have to consider the pitfalls and weigh the difference between the two. If you go full-time are you paying benefits.
If you’re looking to take it from side hustle to a full-fledged business. You’re going to have to expand and hire people eventually. Just be sure to have a strategy in place to ensure you’ve done your due diligence.
