There comes a point in many businesses where they must consider getting help. Unfortunately, 80% of small businesses in the US don’t cross this threshold successfully. According to the SBA, 23.3 million of 28 million US small businesses have no employees. This means the minority entrepreneurs are those who hire and scale.
In his book, The E-Myth revisited, Michael Gerber explains how each entrepreneur juggles the technician, the manager, and the entrepreneur within. The technician is happy doing the work. The manager is happy regulating the work, and the entrepreneur is happy envisioning and strategizing about the work. He says that most small businesses allow the technician to prevail where the business owner “becomes the business” and they are doing all of the work, which is the WORSE job to have.
They have less freedom than if they were employed by someone else. They work more than 40 hours per week, they can’t take time off, and their income fluctuates if they don’t show up for the job. Even worse, the “technician-mentality” is one of the top 10 reasons small businesses fail!
- 1 The One-Man Show Tragedy
- 2 The Alternative
- 3 The Mom and Pop
- 4 When NOT to Create a New Role
- 5 When You Should Consider Creating a New Job
- 6 How To Structure the Growth
- 7 10 Steps For How To Create a Job That Doesn’t Exist
- 8 Final Words on How To Create a Job that Doesn’t Exist in Your Company
- 9 Now, it’s Your Turn…
In the early stages of business, entrepreneurs are usually so excited to “escape the rat race”, “abandon the boss”, and “regulate their own time”, so we perform the client fulfillment tasks with little complaints UNTIL the volume ramps up, and our social lives and personal lives suffer. It’s at the end of this infancy stage of the business when we realize that the business cannot go on how it’s going now.
We start to see ourselves declining: orders that were delivered early or on time begin to get mixed up or get delivered late, our reputation is becoming more questionable because we are getting warn out from being the Master Juggler.
At this realization, many entrepreneurs can’t comprehend the next step, so they shut their doors. Others, continue on imprisoned to the “job” they’ve created (that may be worse than a job you can clock in and out of).
Rather than getting drowned by the business by holding too tight on the reigns as a technician, entrepreneurs should begin job prototyping as early as possible, so when it’s time to scale, the process can be much easier.
The Mom and Pop
While many people say they don’t want to be a mom and pop shop, there’s very few people that do otherwise–in large part because they don’t know any better. The Mom and Pop usually starts out very good at a specialty: baking cakes, making tacos, finding antiques, etc. They take this technical skill and open a store.
They find that when they open the store, there’s much more required to keep the store open. They have to market to get people to come to the store. They have to sale to convert visitors into buying customers. They have to record numbers to maintain inventory, do taxes, and bring money home. There’s many more hats they have to wear besides their technical skills!
Often times, when the Mom and Pop realize all of the “additional tasks” entrepreneurs must do that technicians don’t have to do, they may consider getting a job or closing the shop, but a select few who truly want to grow past the Mom and Pop phase will decide to stick with it.
Some will put their heads down and continue doing the same thing to get different results, but the successful entrepreneurs will study and learn how to prototype jobs and scale.
When NOT to Create a New Role
Although scaling is a decision you should make to train your business to become an independant entity, there is a time when you should, and a time when you should NOT create a new role in your business. Here are a few examples of bad times to create a job:
1. Prior to creating a profitable job for the entrepreneur
When you’re first starting the business, the first step is to create a profitable job for the entrepreneur. If you have not mastered a way to bring money into the business to provide a profitable job for the entrepreneur, it’s probably a bad time to create a new role in the business. You want to make sure your lead generation and lead conversion systems work well prior to creating new roles in the business. In the beginning, the entrepreneur will create the lead generation system, the lead conversion system, perform the client fulfillment tasks, and begin prototyping the first profitable jobs.
2. Before there is sufficient cashflow in the company to afford the new role
After the lead generation system, lead conversion system, and client fulfillment systems are working, you will start to build the cashflow. First, the cashflow will cover business expenses (variable and recurring), payroll for the entrepreneur (unless they decide they don’t want to take a paycheck from the business), and savings. Once the savings account is padded well enough that other financial goals can be covered in addition to 3-6 months of wages for a new employee, then it may be a good time to begin the hiring process.
You want to make sure that you’ll be able to commit to supporting your own expenses and another person’s expenses consistently, so you can develop a good reputation as a reputable company.
3. Before being clear about how tasks should be distributed
Prior to hiring the first in-house employee, you can write your own to-do lists. Track what tasks need to be completed in the business. Start to track trends (which tasks need to be done daily, monthly, annually, etc.). Then, you can test outsourcing your tasks in small increments to tweak and improve your training manuals, and to see how your systems flow when you have offloaded some work.
4. Before having a clear training process and resources to enable the new hire to get up and running quickly and smoothly
Regardless of whether you’re new hire has been in the industry for one year or twenty years, there always has to be an onboarding process. Every company will have a different way to do the same things.
Google’s marketing team will not market identically with Facebook. McDonald’s does not prepare a burger identically with Burger King. Similarly to how these other companies may offer similar services with variations, you’ll also have that in your business.
Your restaurant will perform a little different than the one down the street. Your marketing agency will run a little different than others, therefore, you’ll have to have a process to onboard contractors and employees. You’ll want to begin working on this training manual early, so you can scale easier. Depending on the efficiency of your training process and the amount of new information you want to introduce, you can get new hires up and working within days, weeks, or months.
5. If you have seasonal, one-time, or unusual work loads
Just like you want to provide a stable paycheck for yourself, employees want the same stability. If your work loads are inconsistent, it may be best to work with contractors or short term agencies until your workload stabilizes.
6. Sick or vacationing team members (including yourself)
Similarly, if you or someone on your team is vacationing, you’ll only need help for a short period of time. It may be best to distribute the work differently for a period, to go with a temp agency, or to hire a freelance contractor.
7. When time management is an issue
Piggybacking on the concept of creating a profitable job, you’ll be required to partake in some disciplines in order to be productive and stabilize the business profits. If you don’t have a system to stabilize a level of productivity, you may need to focus on your job prototype harder rather than adding people onto the team without good leadership metrics.
When You Should Consider Creating a New Job
These are all warning signs that it’s time to hire your first employee:
1. When your workload is consistently impacting your work/life balance negatively
2. When you are regularly using contractors or freelancers
3. When you are spending time on tasks that don’t require your expertise
4. When increased efficiency could be possible if you “stayed in your lane”
How To Structure the Growth
Once the signs are clear that it’s time to hire your first employee, make sure you do these things:
1. Plan early
Don’t rush to hire the first person that applies. Think of hiring like the commitment that it is. You are committing to taking care of a person and their family, and this person is committed to helping you to take your business to the next level. Hiring should not be taken lightly.
You want to plan early so you can take your time deciding on who will fit best in your company. Verne Harnish said, “the hardest hire to make is your replacement”. You want your first hire to be skilled and coachable, so they can take on tasks and help you increase productivity. It takes time to find someone that will be the perfect fit as the “first employee”. When you start seeing signs that you’ll need to scale (like we discussed previously), begin marketing and shopping around.
2. Wait until the need is obvious
While you may be collecting leads as potential hires, you don’t want to draft any contracts for in-house positions until the need is obvious. In the meantime, you can do short-term tests, but hold off on hiring employees too early because that could be a very expensive mistake..
3. Create milestones to prototype well before hiring full or part time
Create milestones. Maybe one milestone could be “Create graphic design training”, then test it out with a contractor. You could create another milestone stating “Begin posting hiring ads for a part-time graphic designer when a graphic design contractor is being used every other day. Make the milestones suitable for you.
10 Steps For How To Create a Job That Doesn’t Exist
Before you begin hiring or creating a job, here are 10 recommended steps for creating a job that doesn’t exist:
1. Demonstrate That There’s a Solid Return on Investment
You want to compile several tasks that are going to increase the revenue and value of the company: directly or indirectly. For your first hire, you will want to directly increase the value for the company.
Whether the person is admin, Finance, Sales, Marketing, Product Development, or HR, you will want to make sure there is a clear calculation of how the added hire will increase the value to the company. Maybe they are assigned to getting the invoices out which in turn increases the amount of proposals sent out or conversion on proposals, or whatever your situation may be. Write this down for yourself how the person will increase the value to the company.
2. Clearly articulate the Value
Clearly articulate the value. Create a performance standard that incentivizes their achievement of the aforementioned valuable tasks or exceeding the tasks.
3. Do a “To-Do” List Challenge
If you’re uncertain about how to clearly decide on tasks, do a to-do list challenge where you consistently churn out tasks from a specific to-do list for a set period of time (15 days, 30 days, etc.), time yourself on the tasks, and create a metric for success and “needs improvement”.
This to-do list challenge can help you to be clear about what performance is reasonable, what productivity standards are reasonable, and the factors that contribute to success and failure. When you’re clear about the job and tasks, it makes it much easier to relate, answer questions for an employee, and to scale.
4. Do Some Research
Find comparable companies, and see how they divide tasks within a working company. Often times, you don’t have to re-invent the wheel and create jobs that don’t exist anywhere. You can use jobs at comparable companies as your model, measure the value of the task compilation to your organization, and decide how to modify it for your company.
5. Provide Data to Support the Position
Make sure your numbers, your performance metrics, and the task compilation you’ve created is reasonable. You want to feel confident about what you’re doing and you want others to be confident in you.
6. Create a Minimum Viable Position (MVP) and test it with Contractors
Once you have an idea of a position you may want to add, test it out with contractors. See how your training manual works to communicate your goals, get feedback, see how efficiently and effectively they can efficiently get to performing.
7. Be Clear With the Numbers, Responsibility, and Training: The Training Cost and a Clear Goal for ROI
You need to be clear about how much you can pay, how much is normal in the market, how you are positioned in the market as an employer, and how to get high performance employees on board. Be clear about how responsibility will be distributed, and how long the onboarding and on-the-job training is expected to take.
8. Show How it Impacts Growth or Retention
Visualize how the new hire will impact the business growth or the retention of current customers and employees. Every employee has to have a clear function to the business, and you want to be clear what that is prior to hiring.
9. Find a Competitor with a Similar Role
Your competitors may have the perfect model or template for the position. You can look at your competitor’s role andn create a comparable position within your business.
10. Hire, Test, and Improve the Prototype
Your first hire is not usually your best hire. You keep getting better and better at hiring, prototyping jobs, and improving training and efficiency. Be flexible enough to test and improve.
Final Words on How To Create a Job that Doesn’t Exist in Your Company
The goal of this article was to show how to create a job that doesn’t exist in your company YET. Hopefully this article gave you lots of great ideas for processes and things to consider so you can scale your business. I’d love to hear that you’ve used the information here to scale a massive enterprise one day! If you have questions or concerns about this, don’t hesitate to leave them in the comments section. I’d love to help you out!
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Now, it’s Your Turn…
Have you hired before? How did you prototype the job? Did you follow a process like these 10 steps? Why or why not? Leave your comments and questions below.