February 5, 2025 • 25 mins
Thinking about hiring your first employee but worried whether your business can really afford it?
We've got you covered! In this episode, we talk about what really matters before you hire - getting your money in order. While lots of experts focus on finding the right person, we'll show you why having strong business finances is just as important as picking the perfect candidate.
Key Quote: "It's better to have an employee come into a profitable business and make it more profitable than to think your hire is the magic pill to make your business profitable."
What You'll Learn:
-
What you need to set up financially before you start looking for employees
-
How to do a simple "practice run" to make sure you're ready to hire
-
When it's okay to move forward even if everything isn't perfect
-
Smart ways to get help if you're not quite ready for a full-time employee
Want help building a great team? Check out Brian Alexander from Ready, Aim, Climb at readyaimclimb.com.
Ready to take the next step? Get our free Hire Readiness Checklist at
wealthwisdomfp.com/community. You'll also find a whole community of business owners who are working on the same challenges.
Don't wait until you're overwhelmed to start planning for your first hire. Listen now and learn how to make your first hiring experience a success!
00:00 Introduction: Hiring Your First or Hundredth Employee
00:54 Welcome to Wealth Wisdom Financial Podcast
01:32 Our First Hiring Experience
02:56 Financial Structure and Hiring
04:34 Profit First: Essential Financial Foundation
10:06 The Vault: Testing Payroll Capacity
15:04 Reality Check: When You Can't Wait
20:07 Audition Instead of Interview
22:09 Join the Wealth Wisdom Community
23:03 Conclusion and Final Thoughts
#BusinessGrowth #SmallBusiness #Hiring #FinancialFoundation #TeamBuilding
Watch on YouTube: https://youtu.be/qKwtYe6OYUc
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Thinking of hiring your first or maybe
100th employee?Today, we're diving into
everything you need to know, from
financial preparation to practical tips.
Plus, we'll get into the debate about
whether to jump in before you're ready.
So whether you're ready to hire now or
planning for the future, this episode
will help you avoid the common pitfalls
(00:23):
that trip up most employers. For
those of you with employees already, keep
listening, because returning to the tried
and true is a great reminder for your
next hire and to retain the staff you
already have.
In a world where chaos seems to reign
supreme, where uncertainty lurks
(00:44):
around every corner and financial
markets are now more unpredictable than
ever. There's one place you can turn to
to find clarity and control.
Welcome to the Wealth Wisdom Financial
Podcast. Hey, I'm Brandon. And I'm
Amanda. Join us as we dive deep in the
world of personal and business finance
(01:04):
to assist you in navigating through the
chaos and building the financial future
you deserve. We believe when conventional
financial thinking doesn't get you where
you want to go, you need wealth wisdom.
So if you're ready to take control of
your financial destiny. Tune into the
Wealth Wisdom Financial Podcast because
in a chaotic world, your money shouldn't
(01:26):
be. Subscribe now and never miss an
episode. I
want to take you in our Wayback Machine.
Of course, you know, we like time
machines here, like the DeLorean and
stuff. So we're going to go back to our
first hire in 2011.
We were hiring our first barista.
So our bar was pretty low. I mean,
(01:49):
literally we were hard to be a barista.
Yeah, we had people do dishes and all
that fun stuff. And in the beginning we
were recruiting first, you knowOur
friends, because everybody wants to work
at a coffee shop, apparently, or friends
of friends. And that got us through the
first couple of years, right?So we were
able to leverage that. But over
(02:09):
time, we needed to veer into the world
of job postings, putting it on Indeed and
on or Craigslist at the time. Yeah, yeah,
and onboarding. Since then, we've
hired so many baristas.
Administrative staff and many roles to
count. So I think that we're pretty,
(02:31):
I wouldn't say we're experts, but we've
done it a few times. We've helped a lot
of people and you know, it's been
fun. Today we're passing on what we've
learned. From our experiences
and challenges, from getting
input from those we've hired to
many other things and many people that we
have even today. Yeah. And from people
(02:53):
who have hired way more people than we
have to. Yeah, yeah, yeahSo we're gonna
start with probably the most opinionated
idea. And yes, there's a lot of opinions,
of course, about everything. And yes,
it's going to be about money because this
is a financial podcast after all. But I
think it's really interesting how we're
going to tie this into some of the
other things that people
(03:14):
who teach people how to hire might talk
only about. But with because they don't
focus on the money, they miss out on how
the talking about the money can actually
boost the other parts of the people part
of your business. So. This is what
something most business coaches are not
going to tell you about hiring employees.
Here it is. It's just as much about your
(03:36):
business's financial structure as it is
about finding the right person. I'm going
to say that again, very controversial
here. It's just as much about your
business's financial structure as it is
about finding the right person. Today
we're going to talk about what all that
that means and what that looks like.
We've seen far too many business owners
(03:56):
rush into hiring without the proper
financial foundation, only to create
stress for themselves and their new hire.
But we've seen also seen entrepreneurs
wait too long, thinking they've got to
have their financial system perfect and
they miss growth opportunities because
they're of that perfectionism. Today
we're going to find that sweet spot
between preparation and action.
(04:19):
understand how that money foundation,
financial foundation of your business
actually helps you hire better. Yep. And
I, and again, I think that's really
important to know and think about,
right?And we might land on one side or
the other, but it's a middle ground.
Yeah. So we've got three crucial
layers to the financial side of the
business that we're gonna talk about. And
(04:40):
I'm gonna kind of introduce each layer
and Brandon's gonna help like bridge that
into some bonuses. of how the how you
hear these normal business coaches kind
of talk about hiring, how actually what I
talk about with money bridges into those
those areas. So first,
this essential foundation of having
Profit First properly set up in your
(05:01):
business. If you're not familiar with
Profit First, it's amazing. We're going
to kind of talk a little bit about it.
But if you've started Profit First, if
you had a little bit set up, this is
going to help you take it to that next
level. It's not just about having the
separate bank accounts, it's actually
knowing how much you can sustainably
spend on payroll. Yep, since payroll
is one of our biggest expenses, right?As
(05:22):
we grow businesses. Yeah, most
businesses, yeah. So are you at your
target allocation percentages yet?Should
you hire before you are or not, right?
Like, that's up to you, but great
question to ask, right?Are you building
up some cushion in your operating expense
account?Are you having to borrow from
your other accounts to fund the OpEx?
That's going to be a different kind of
signal for whether you should hire or
(05:43):
not. How is your debt paid down
from your quarterly profit distributions
going?Are you seeing your debt go up?Are
you seeing it go down?Are you able to
make those quarterly profit distributions
to help pay down your debt and to reward
yourself for the risk you're taking in
your business?There's this marketing
analogy of a campfire. We're taught
when we're doing marketing to make sure
(06:04):
your marketing fire is going, that you're
actually generating some leads before you
pour more fuel onto that fire and try to
generate a whole bunch more leads.
Otherwise, if your fire's not lit, you
end up with wet locks when you just pour
more fuel onto it. That's it's similar
with hiring. It's better to have an
employee come into a profitable business
(06:24):
and make that business more profitable.
Than to think your hire is the magic
pill to make your business profitable.
With the latter where they're the magic
pill, you end up with a business even
less profitable than it was before. You
just spent all this money in hiring,
right?And that's like the wet logs
equivalent of that campfire analogy and
probably yourself even closer to
(06:46):
bankruptcy. Yeah, I think that's a big
thing to also think about, right as
we've. done and worked with lots of
clients and you look at their,
their OpEx and all that stuff, and I'm
like, wow, their payroll is really
high and they're not paying themselves.
Uh, and that makes a big difference
and it impacts their psyche as a business
(07:07):
owner, becomes a hobby, not a prof, uh,
business. And so we wanna really think,
uh, about that, how those intersect. So
now do that where, you know, apply this
to how most business coaches would talk
about hiring and how this, you know,
you've set up your financial foundation,
what that actually does. By taking the
time to set up your financial foundation,
(07:28):
you get to know yourself better, right?
Plus, you'll see the gaps in the business
and in your own
expertise, right?So by really
learning about you. then you hire people
to fill those gaps and make the business
better rather than hiring people just
like you or like you or whatever. Like
(07:51):
attracts like, right?You're hiring people
that you like rather than people that
your business actually needs. Yeah. And
they become similar to you. And then
you're you're not actually growing
other the business, you're just kind of
feeding your ego or something. I don't
know. So really also, and
if you want to want help in knowing, let
me go back. So if you want some
(08:13):
help getting to know yourself, we've
taken plenty of tests, like from the
Enneagram test to the Myers-Briggs
to Predictive Index and so many more.
Like by doing that and taking that work
as a business owner, knowing yourself,
that's not only going to help your
marriage, right, but it's going to help
(08:34):
your business. And I think there
are so many things that you can do as
a team dynamic that is gonna amplify
your business. And then I, again, I
suggest putting a line item in your
budget for development and even
possibly working with an expert in that
area. Uh, and if you're looking to
(08:56):
dive deeper intoThose kind of
things. I have a friend, his name is
Brian Alexander, and he has this
business called Ready, Aim, Climb. He's a
ninja in people development, right?And so
you wanna not just invest in your
people's payroll. and
yourself, but you also want to invest
(09:18):
in knowing them and knowing how you can
work together. And you can go for his, if
you go to ready and climb, uh, that's his
link. And, um, there's gonna be show
notes and all that stuff. And then just
say, hey, I heard about it from Wealth
Wisdom Financial. I don't know. Great. So
moral of number one, your first layer,
(09:38):
you set your financial foundation, fully
implement profit first,That helps you
not only have the the money set and
the new employees coming into a
profitable business, but it also helps
you identify the gaps and get clearer
on who you're gonna hire, why you're
hiring them, not just who you're gonna
(09:58):
like, but also who's going to fill in the
gaps of, 'cause you can't be perfect at
everything and doing other things. Really?
Really, yeah, yeahSo now we go
to the second layer. And this is an ideal
scenario, not totally required, but
highly recommended. This is where, as
you're working profit first, you end up
with a vault. We've talked about the
(10:20):
vault a lot of times on this podcast. If
you want to get familiar, go back and
listen to some past episodes. And the
vault becomes kind of a, you can use it
as a testing ground in this case. So
imagine this, you pretend to pay your
future employee for about three months.
And you just move that money into your
vault instead. So it goes from the OpEx
into the vault as if you're paying that
(10:40):
employee. So you kind of build that
habit, feel that what that feels like.
It's kind of like a dress rehearsal for
your business's cash flow. And what
employee would not want to come into a
business with three months of their pay
on hand just in case they go through a
cash flow crunch like we talked about a
couple episodes ago when we talked about
cash flow management. Like for an
(11:01):
employee to know like, hey, I pretended
to pay you for three months before we
hired you. If I know I can do
that now, but also if business doesn't go
as expected, we've got three months of
payroll. That is a huge
signal to the person that you're hiring
that you've got a legit business that
they can build a career in. Now
is 3 months the right number?It could be
(11:21):
one month, it could be 6 months, right?
Could any of those be better?And that
could vary depending on the variability
of your cash flow, right?And how your
seasonality, things like that. You decide
what to have in your own vault, just to
make sure it's there specifically for
payroll. And you have separate funds for
all the other things you need to cover
during a cash flow crunch. Yeah. Right?
(11:43):
Like taking that vault and kind of using
envelopes within that vault or, you know,
categories within that vault to make sure
this is for payroll, I'm not gonna touch
it except for payroll. Yeah, I think that
also like from a
employer standpoint, one of my
staff is like, hey, we're going too
slow or we need we're or it's too fast.
(12:05):
And I'm like, well, I'm thinking about 3
months, four months in. And what
we're doing now, even though it's a busy
time, helps to make sure we're good
during the quiet times because there
there will be quiet times. As well.
And so we just kind of roll with it, but
also making sure I'm thinking about
(12:25):
his payroll three months he might not be.
He's thinking about right now. And so we
as a business owner, we have to kind of
be in both. basis. Yeah. And
so the other thing here
is that as you're taking this
time to move that money to the vault each
month and you're feeling what it feels
like to have that, it also
(12:46):
brings you some more clarity on who
you're hiring and what you want them to
do. You want to talk a little bit about
that?A little bit different than this
personality and personal development side
we're talking about. This, you were
telling me, is more about their job
description. Yeah. So if you have
clarity and you know what you're
hiring for, you, you then start building
(13:08):
a job description. Maybe that's gonna be
different than yours, right?And, uh, it
goes back into as you're building the
team and you're building their
job description, uh, you might learn
that that 8020 rule and helping to build
more focus and seeing what's working,
what's not working. Um, but, but then
(13:29):
that helps. You amplify and grow the
business even further because you've
hired the right people in the right
seats. You're able to then see, oh, well,
I'm not just hiring a person that's doing
busy work, but we're hiring a person
that's moving the business forward
because that's, I mean, if you're a
business owner, that's what you want is
to move it forward, right?Yeah. OK,
(13:52):
so we've talked now about profit
1st and then the vaults and how you
can build some cushion there.
This might sound way too idealistic, like
holy cow, I can't wait to do all
that stuff before I hire. So stay tuned
after the break for we're going to call
it the reality check and this is where it
(14:13):
gets really interesting.
Ready to take the next step towards
securing your financial future?Whether
you're planning for retirement, saving
for your dream home, or you just want to
make your money work harder for you, the
team at Wealth Wisdom Financial are ready
(14:34):
to assist you. And now it's easier than
ever to see how we might give you a boost
on your financial journey. Schedule a 15
minute discovery call with one of us
today. And let's discuss your questions
and your financial goals together. Don't
wait any longer. Your financial freedom
awaits. Schedule your discovery call at
www.wealthwisdomfp.com/call.
(15:04):
Now you might be thinking, but what if I
can't wait three months?My business is
bursting at the seams. And you're right,
sometimes the cost of waiting is
higher than the cost of imperfect timing.
I recently worked with a client, we'll
call them Sarah, who runs a successful
graphic design business. Let's say
(15:24):
Sarah was drowning in work, turning away
clients because they couldn't handle it,
right?And Sarah didn't have her full
financial system in place. And so
together we ran the numbers and realized
she was losing more money by not
hiring. Then she would risk by
hiring before her systems were perfect.
(15:45):
So we looked through it and she moved
forward with hiring. It was a really
great decision because now she actually
has some of that time freed up. They're
not turning away clients, and she can
instead spend some time setting up those
systems that she could have never set up
because her schedule was just too full.
I think that's again, as a business
owner, having that thinking time or
(16:05):
having the guides there to help you make
that decision. And sometimes we're too
busy running around. We feel like we
don't have the time. But by stopping,
having that thinking time, having that
time probably with you, yeah, allowed her
to move in the right direction.
Yeah. So the key here is to understand
the difference between essential
(16:25):
preparation and optional
optimization. In our very humble
opinions, we think that essential is
really only a couple things. Three
things, actually. 33 is a great number. A
clear understanding of your cash flow.
Even if you don't have profit first fully
implemented, you know, like here's about
how much it comes in, right?Here's how
much it comes out. You've got a basic
(16:47):
understanding. To at least one month of
payroll in reserve. If you're turning
away clients like Sarah was, you should
have enough in the bank, right?Or in a
vault where you know you could cover
payroll for a month in case all those
clients and potential clients just
disappear. And then you need a basic
payroll system, right?You need a way to
pay them to collect their identity
(17:08):
information to make sure they're eligible
to work for you. You know, anything like
that. That anything else, right?
Everything else other than those three
things, clear understated cash flow, at
least one month of payroll and a basic
payroll system. Everything else can be
optimized as you go. Can I add
something that I was thinking about here
is, you know, there's the Rocket Fuel
book by Gino Wickman
(17:30):
and that having that visionary
and the integrator, some of those things,
maybe your first person that you hire
is maybe. Integrator. They might help
you develop those systems, so you
might not. That might be like, oh, I'm
overwhelmed by it. But that's an
important thing to make sure that
(17:52):
as you build your business, an
integrator role or something that helps
to. Take that minutia off.
Yeah. So you can imagine Sarah, in our
example, might sit down and say, do I
want to be doing more graphic design?I
could continue what I'm doing and
hire an integrator. Or do I want to shift
(18:12):
from doing so much graphic design to do
some of that integration myself?Is that
in my skill set?Is that what I really
want to be doing?And I need to hire a
bunch of graphic designers to take on
more of this?Yeah, yeah, great. I think
that's an important thing. OK. And then
there's one more alternative we'd be
remiss not to mention. If you simply
can't wait and you need someone before
you've got all those foundations set, you
don't have to hire an employee. You could
(18:34):
hire a VA, a 1099 from a third
party or directly. We did this with
administrative help before we went on
with hiring full-time W2 admin help.
It was tremendously helpful. One tip here
if you're going to go that route is have
that 1099 admin. Help write
down those processes that they're
(18:55):
learning, that you're teaching them.
Create some of those standard operating
procedures, SOPS insights to make
training that W2 admin even easier when
you get to that point. Very legitimate,
often used path to take and one that we
found really helpful. Yeah. And if you
want other resources for VAS,
we have several that reach out to us and
(19:15):
we can point you in a few places that
have helped us and that you know we.
We could share our
groups that we're part of. Yeah. OK, so
the path to hiring isn't always linear.
Well, having a profit first set up,
testing your payroll capacity through
your vault, those are ideal. The most
(19:37):
important thing is ensuring that you can
sustainably cover payroll and basic
benefits and still pay yourself and still
have profit, right?Not just pay yourself.
A little bit. But pay yourself. Like, for
real. Yeah. Start with the essentials.
Test what you can and be prepared to
learn and adjust as you go. No one does
this perfectly. Embrace the
imperfection. Embrace the mess. But also
(19:59):
keep your future bigger than your past.
Yeah. OK. And then one final tip here.
Yeah, I want to share this. This is a lot
of fun. So we learned
this way back before and we we've shared
this many well before our first hire.
Yeah. And we had met this guy
again. We've shared this. His name is
Perry Marshall. He wrote a book called
(20:20):
8020 Sales and Marketing. Didn't know he
was famous at the time. Didn't know
anything except we were told, hey, you
should talk to him because he's a
business expert and he could help you.
So, so we had a beer with them
and what stuck with us in that that
one of the many things, yeah, in that
initial conversation was
(20:42):
audition instead of interview.
So what we did, and this is something you
could think about, which is very helpful,
is we had people come in.
Well, we would talk to them a
little bit, ask them some normal
interviewee kind of questions, but then
we'd go walk over to the sink and
(21:02):
teach them. Here's the three section
sink, how you wash dishes. We wouldn't
teach them too much. It was just a basic
overview. Yep. And we would see, you
know, maybe if they didn't learn how to
wash dishes from. I don't know, parents,
um, then they aren't gonna be good for
the job. If they didn't know how to
sweep, uh, I mean, you'd think this would
(21:23):
be obvious, uh, but it wasn't. And
you'd be able to see. Or like you can
take instructions. Yeah. Too. Right. So,
So that helped us to be able to see,
cuz, you know, as, as you've been hiring
people, I'm sure, or are about to, people
write a lot of amazing stuff on paper.
But then you get to see how they actually
work, and that's an important thing. So
(21:43):
audition as well as interview. Yeah,
and we highly recommend that 8020 sales
and marketing book. You can read chapter
17 probably a few times
before even posting a job description.
You'll learn this idea of auditioning
instead of interviewing, as well as a a
lot of other things. Total game changer.
And then maybe read 8 chapters 18 and 19
(22:04):
about hiring and firing. Those are really
great too. So check that out. So
are you ready to take the next step in
growing your business through hiring?
We've created a detailed hire readiness
checklist. We shared a lot here. You're
not going to remember it. You're probably
going to want this checklist. It's a
comprehensive guide that walks you
through both the financial and the
operational prerequisites we believe you
(22:27):
need to have in place. You can head over
to wealthwisdomfp.com/community
and join the community and get that
checklist. Also inside the Wealth Wisdom
Financial Community, again at
wealthwisdomfp.com/community, you'll
find lots of resources to grow a
sustainable business that builds your
personal wealth. Don't wait until
(22:48):
you're overwhelmed to start preparing for
your first or your next hire. Visit
wealthwisdomfp.com/community today
and get that checklist and join a
community of business owners who are
navigating this journey as well. Let's
make your hiring success story. And if
you haven't noticed, we are doing a lot
more for business owners. I mean, we love
(23:08):
that. I was just talking to somebody the
other yesterday and you
know, again, we do a lot with the
infinite banking concept with Profit
First, but having that expertise of
running a business, hiring people
really. Amplifies your business
and your business and personal intersect.
(23:28):
So the articles that Amanda puts in the
community, and I do as well, are
really, really helpful. And the
relationships that are built, again,
Brian Alexander is a key example
of people that maybe aren't the
financial foundation. Work, but you could
then use them for the various aspects
(23:50):
that are needed in your business at the
right time. Yeah. So thanks for joining
us. Hit that subscribe button so you
don't miss this whole month. We're going
to be talking about building your a team.
Today we talked about with internal.
We're going to go into some external a
team members in the future. The A-Team.
Well done. Yeah. So don't forget, live
long. I keep saying that. Don't forget.
(24:11):
You know this. Live long and profit.
Don't forget. Man, I did it again.
Write a review, post
comment, share this with right. Don't
forget in the comments. Don't forget to
do that. You know, I I
feel like I have to say that because
people don't do it. So do it.
We love it. And remember the topics
(24:33):
presented in this podcast are for general
information only. And don't forget
to only for the purpose of
provide, not for the purpose of providing
legal, accounting, investment advice on
such matters. Matters. Please consult a
professional who knows your specific
situation and make sure you know
yourself by taking these tests. So don't
(24:55):
forget, remember, and make sure they're
all the same thing. Oh, there you go.
Yeah. All right. We'll work on that until
until next time. Take care. Those are my
fillers.
Thinking of hiring your first or maybe
100th employee?Today, we're diving into
everything you need to know, from
financial preparation to practical tips.
Plus, we'll get into the debate about
whether to jump in before you're ready.
So whether you're ready to hire now or
planning for the future, this episode
will help you avoid the common pitfalls
(00:23):
that trip up most employers. For
those of you with employees already, keep
listening, because returning to the tried
and true is a great reminder for your
next hire and to retain the staff you
already have.
In a world where chaos seems to reign
supreme, where uncertainty lurks
(00:44):
around every corner and financial
markets are now more unpredictable than
ever. There's one place you can turn to
to find clarity and control.
Welcome to the Wealth Wisdom Financial
Podcast. Hey, I'm Brandon. And I'm
Amanda. Join us as we dive deep in the
world of personal and business finance
(01:04):
to assist you in navigating through the
chaos and building the financial future
you deserve. We believe when conventional
financial thinking doesn't get you where
you want to go, you need wealth wisdom.
So if you're ready to take control of
your financial destiny. Tune into the
Wealth Wisdom Financial Podcast because
in a chaotic world, your money shouldn't
(01:26):
be. Subscribe now and never miss an
episode. I
want to take you in our Wayback Machine.
Of course, you know, we like time
machines here, like the DeLorean and
stuff. So we're going to go back to our
first hire in 2011.
We were hiring our first barista.
So our bar was pretty low. I mean,
(01:49):
literally we were hard to be a barista.
Yeah, we had people do dishes and all
that fun stuff. And in the beginning we
were recruiting first, you knowOur
friends, because everybody wants to work
at a coffee shop, apparently, or friends
of friends. And that got us through the
first couple of years, right?So we were
able to leverage that. But over
(02:09):
time, we needed to veer into the world
of job postings, putting it on Indeed and
on or Craigslist at the time. Yeah, yeah,
and onboarding. Since then, we've
hired so many baristas.
Administrative staff and many roles to
count. So I think that we're pretty,
(02:31):
I wouldn't say we're experts, but we've
done it a few times. We've helped a lot
of people and you know, it's been
fun. Today we're passing on what we've
learned. From our experiences
and challenges, from getting
input from those we've hired to
many other things and many people that we
have even today. Yeah. And from people
(02:53):
who have hired way more people than we
have to. Yeah, yeah, yeahSo we're gonna
start with probably the most opinionated
idea. And yes, there's a lot of opinions,
of course, about everything. And yes,
it's going to be about money because this
is a financial podcast after all. But I
think it's really interesting how we're
going to tie this into some of the
other things that people
(03:14):
who teach people how to hire might talk
only about. But with because they don't
focus on the money, they miss out on how
the talking about the money can actually
boost the other parts of the people part
of your business. So. This is what
something most business coaches are not
going to tell you about hiring employees.
Here it is. It's just as much about your
(03:36):
business's financial structure as it is
about finding the right person. I'm going
to say that again, very controversial
here. It's just as much about your
business's financial structure as it is
about finding the right person. Today
we're going to talk about what all that
that means and what that looks like.
We've seen far too many business owners
(03:56):
rush into hiring without the proper
financial foundation, only to create
stress for themselves and their new hire.
But we've seen also seen entrepreneurs
wait too long, thinking they've got to
have their financial system perfect and
they miss growth opportunities because
they're of that perfectionism. Today
we're going to find that sweet spot
between preparation and action.
(04:19):
understand how that money foundation,
financial foundation of your business
actually helps you hire better. Yep. And
I, and again, I think that's really
important to know and think about,
right?And we might land on one side or
the other, but it's a middle ground.
Yeah. So we've got three crucial
layers to the financial side of the
business that we're gonna talk about. And
(04:40):
I'm gonna kind of introduce each layer
and Brandon's gonna help like bridge that
into some bonuses. of how the how you
hear these normal business coaches kind
of talk about hiring, how actually what I
talk about with money bridges into those
those areas. So first,
this essential foundation of having
Profit First properly set up in your
(05:01):
business. If you're not familiar with
Profit First, it's amazing. We're going
to kind of talk a little bit about it.
But if you've started Profit First, if
you had a little bit set up, this is
going to help you take it to that next
level. It's not just about having the
separate bank accounts, it's actually
knowing how much you can sustainably
spend on payroll. Yep, since payroll
is one of our biggest expenses, right?As
(05:22):
we grow businesses. Yeah, most
businesses, yeah. So are you at your
target allocation percentages yet?Should
you hire before you are or not, right?
Like, that's up to you, but great
question to ask, right?Are you building
up some cushion in your operating expense
account?Are you having to borrow from
your other accounts to fund the OpEx?
That's going to be a different kind of
signal for whether you should hire or
(05:43):
not. How is your debt paid down
from your quarterly profit distributions
going?Are you seeing your debt go up?Are
you seeing it go down?Are you able to
make those quarterly profit distributions
to help pay down your debt and to reward
yourself for the risk you're taking in
your business?There's this marketing
analogy of a campfire. We're taught
when we're doing marketing to make sure
(06:04):
your marketing fire is going, that you're
actually generating some leads before you
pour more fuel onto that fire and try to
generate a whole bunch more leads.
Otherwise, if your fire's not lit, you
end up with wet locks when you just pour
more fuel onto it. That's it's similar
with hiring. It's better to have an
employee come into a profitable business
(06:24):
and make that business more profitable.
Than to think your hire is the magic
pill to make your business profitable.
With the latter where they're the magic
pill, you end up with a business even
less profitable than it was before. You
just spent all this money in hiring,
right?And that's like the wet logs
equivalent of that campfire analogy and
probably yourself even closer to
(06:46):
bankruptcy. Yeah, I think that's a big
thing to also think about, right as
we've. done and worked with lots of
clients and you look at their,
their OpEx and all that stuff, and I'm
like, wow, their payroll is really
high and they're not paying themselves.
Uh, and that makes a big difference
and it impacts their psyche as a business
(07:07):
owner, becomes a hobby, not a prof, uh,
business. And so we wanna really think,
uh, about that, how those intersect. So
now do that where, you know, apply this
to how most business coaches would talk
about hiring and how this, you know,
you've set up your financial foundation,
what that actually does. By taking the
time to set up your financial foundation,
(07:28):
you get to know yourself better, right?
Plus, you'll see the gaps in the business
and in your own
expertise, right?So by really
learning about you. then you hire people
to fill those gaps and make the business
better rather than hiring people just
like you or like you or whatever. Like
(07:51):
attracts like, right?You're hiring people
that you like rather than people that
your business actually needs. Yeah. And
they become similar to you. And then
you're you're not actually growing
other the business, you're just kind of
feeding your ego or something. I don't
know. So really also, and
if you want to want help in knowing, let
me go back. So if you want some
(08:13):
help getting to know yourself, we've
taken plenty of tests, like from the
Enneagram test to the Myers-Briggs
to Predictive Index and so many more.
Like by doing that and taking that work
as a business owner, knowing yourself,
that's not only going to help your
marriage, right, but it's going to help
(08:34):
your business. And I think there
are so many things that you can do as
a team dynamic that is gonna amplify
your business. And then I, again, I
suggest putting a line item in your
budget for development and even
possibly working with an expert in that
area. Uh, and if you're looking to
(08:56):
dive deeper intoThose kind of
things. I have a friend, his name is
Brian Alexander, and he has this
business called Ready, Aim, Climb. He's a
ninja in people development, right?And so
you wanna not just invest in your
people's payroll. and
yourself, but you also want to invest
(09:18):
in knowing them and knowing how you can
work together. And you can go for his, if
you go to ready and climb, uh, that's his
link. And, um, there's gonna be show
notes and all that stuff. And then just
say, hey, I heard about it from Wealth
Wisdom Financial. I don't know. Great. So
moral of number one, your first layer,
(09:38):
you set your financial foundation, fully
implement profit first,That helps you
not only have the the money set and
the new employees coming into a
profitable business, but it also helps
you identify the gaps and get clearer
on who you're gonna hire, why you're
hiring them, not just who you're gonna
(09:58):
like, but also who's going to fill in the
gaps of, 'cause you can't be perfect at
everything and doing other things. Really?
Really, yeah, yeahSo now we go
to the second layer. And this is an ideal
scenario, not totally required, but
highly recommended. This is where, as
you're working profit first, you end up
with a vault. We've talked about the
(10:20):
vault a lot of times on this podcast. If
you want to get familiar, go back and
listen to some past episodes. And the
vault becomes kind of a, you can use it
as a testing ground in this case. So
imagine this, you pretend to pay your
future employee for about three months.
And you just move that money into your
vault instead. So it goes from the OpEx
into the vault as if you're paying that
(10:40):
employee. So you kind of build that
habit, feel that what that feels like.
It's kind of like a dress rehearsal for
your business's cash flow. And what
employee would not want to come into a
business with three months of their pay
on hand just in case they go through a
cash flow crunch like we talked about a
couple episodes ago when we talked about
cash flow management. Like for an
(11:01):
employee to know like, hey, I pretended
to pay you for three months before we
hired you. If I know I can do
that now, but also if business doesn't go
as expected, we've got three months of
payroll. That is a huge
signal to the person that you're hiring
that you've got a legit business that
they can build a career in. Now
is 3 months the right number?It could be
(11:21):
one month, it could be 6 months, right?
Could any of those be better?And that
could vary depending on the variability
of your cash flow, right?And how your
seasonality, things like that. You decide
what to have in your own vault, just to
make sure it's there specifically for
payroll. And you have separate funds for
all the other things you need to cover
during a cash flow crunch. Yeah. Right?
(11:43):
Like taking that vault and kind of using
envelopes within that vault or, you know,
categories within that vault to make sure
this is for payroll, I'm not gonna touch
it except for payroll. Yeah, I think that
also like from a
employer standpoint, one of my
staff is like, hey, we're going too
slow or we need we're or it's too fast.
(12:05):
And I'm like, well, I'm thinking about 3
months, four months in. And what
we're doing now, even though it's a busy
time, helps to make sure we're good
during the quiet times because there
there will be quiet times. As well.
And so we just kind of roll with it, but
also making sure I'm thinking about
(12:25):
his payroll three months he might not be.
He's thinking about right now. And so we
as a business owner, we have to kind of
be in both. basis. Yeah. And
so the other thing here
is that as you're taking this
time to move that money to the vault each
month and you're feeling what it feels
like to have that, it also
(12:46):
brings you some more clarity on who
you're hiring and what you want them to
do. You want to talk a little bit about
that?A little bit different than this
personality and personal development side
we're talking about. This, you were
telling me, is more about their job
description. Yeah. So if you have
clarity and you know what you're
hiring for, you, you then start building
(13:08):
a job description. Maybe that's gonna be
different than yours, right?And, uh, it
goes back into as you're building the
team and you're building their
job description, uh, you might learn
that that 8020 rule and helping to build
more focus and seeing what's working,
what's not working. Um, but, but then
(13:29):
that helps. You amplify and grow the
business even further because you've
hired the right people in the right
seats. You're able to then see, oh, well,
I'm not just hiring a person that's doing
busy work, but we're hiring a person
that's moving the business forward
because that's, I mean, if you're a
business owner, that's what you want is
to move it forward, right?Yeah. OK,
(13:52):
so we've talked now about profit
1st and then the vaults and how you
can build some cushion there.
This might sound way too idealistic, like
holy cow, I can't wait to do all
that stuff before I hire. So stay tuned
after the break for we're going to call
it the reality check and this is where it
(14:13):
gets really interesting.
Ready to take the next step towards
securing your financial future?Whether
you're planning for retirement, saving
for your dream home, or you just want to
make your money work harder for you, the
team at Wealth Wisdom Financial are ready
(14:34):
to assist you. And now it's easier than
ever to see how we might give you a boost
on your financial journey. Schedule a 15
minute discovery call with one of us
today. And let's discuss your questions
and your financial goals together. Don't
wait any longer. Your financial freedom
awaits. Schedule your discovery call at
www.wealthwisdomfp.com/call.
(15:04):
Now you might be thinking, but what if I
can't wait three months?My business is
bursting at the seams. And you're right,
sometimes the cost of waiting is
higher than the cost of imperfect timing.
I recently worked with a client, we'll
call them Sarah, who runs a successful
graphic design business. Let's say
(15:24):
Sarah was drowning in work, turning away
clients because they couldn't handle it,
right?And Sarah didn't have her full
financial system in place. And so
together we ran the numbers and realized
she was losing more money by not
hiring. Then she would risk by
hiring before her systems were perfect.
(15:45):
So we looked through it and she moved
forward with hiring. It was a really
great decision because now she actually
has some of that time freed up. They're
not turning away clients, and she can
instead spend some time setting up those
systems that she could have never set up
because her schedule was just too full.
I think that's again, as a business
owner, having that thinking time or
(16:05):
having the guides there to help you make
that decision. And sometimes we're too
busy running around. We feel like we
don't have the time. But by stopping,
having that thinking time, having that
time probably with you, yeah, allowed her
to move in the right direction.
Yeah. So the key here is to understand
the difference between essential
(16:25):
preparation and optional
optimization. In our very humble
opinions, we think that essential is
really only a couple things. Three
things, actually. 33 is a great number. A
clear understanding of your cash flow.
Even if you don't have profit first fully
implemented, you know, like here's about
how much it comes in, right?Here's how
much it comes out. You've got a basic
(16:47):
understanding. To at least one month of
payroll in reserve. If you're turning
away clients like Sarah was, you should
have enough in the bank, right?Or in a
vault where you know you could cover
payroll for a month in case all those
clients and potential clients just
disappear. And then you need a basic
payroll system, right?You need a way to
pay them to collect their identity
(17:08):
information to make sure they're eligible
to work for you. You know, anything like
that. That anything else, right?
Everything else other than those three
things, clear understated cash flow, at
least one month of payroll and a basic
payroll system. Everything else can be
optimized as you go. Can I add
something that I was thinking about here
is, you know, there's the Rocket Fuel
book by Gino Wickman
(17:30):
and that having that visionary
and the integrator, some of those things,
maybe your first person that you hire
is maybe. Integrator. They might help
you develop those systems, so you
might not. That might be like, oh, I'm
overwhelmed by it. But that's an
important thing to make sure that
(17:52):
as you build your business, an
integrator role or something that helps
to. Take that minutia off.
Yeah. So you can imagine Sarah, in our
example, might sit down and say, do I
want to be doing more graphic design?I
could continue what I'm doing and
hire an integrator. Or do I want to shift
(18:12):
from doing so much graphic design to do
some of that integration myself?Is that
in my skill set?Is that what I really
want to be doing?And I need to hire a
bunch of graphic designers to take on
more of this?Yeah, yeah, great. I think
that's an important thing. OK. And then
there's one more alternative we'd be
remiss not to mention. If you simply
can't wait and you need someone before
you've got all those foundations set, you
don't have to hire an employee. You could
(18:34):
hire a VA, a 1099 from a third
party or directly. We did this with
administrative help before we went on
with hiring full-time W2 admin help.
It was tremendously helpful. One tip here
if you're going to go that route is have
that 1099 admin. Help write
down those processes that they're
(18:55):
learning, that you're teaching them.
Create some of those standard operating
procedures, SOPS insights to make
training that W2 admin even easier when
you get to that point. Very legitimate,
often used path to take and one that we
found really helpful. Yeah. And if you
want other resources for VAS,
we have several that reach out to us and
(19:15):
we can point you in a few places that
have helped us and that you know we.
We could share our
groups that we're part of. Yeah. OK, so
the path to hiring isn't always linear.
Well, having a profit first set up,
testing your payroll capacity through
your vault, those are ideal. The most
(19:37):
important thing is ensuring that you can
sustainably cover payroll and basic
benefits and still pay yourself and still
have profit, right?Not just pay yourself.
A little bit. But pay yourself. Like, for
real. Yeah. Start with the essentials.
Test what you can and be prepared to
learn and adjust as you go. No one does
this perfectly. Embrace the
imperfection. Embrace the mess. But also
(19:59):
keep your future bigger than your past.
Yeah. OK. And then one final tip here.
Yeah, I want to share this. This is a lot
of fun. So we learned
this way back before and we we've shared
this many well before our first hire.
Yeah. And we had met this guy
again. We've shared this. His name is
Perry Marshall. He wrote a book called
(20:20):
8020 Sales and Marketing. Didn't know he
was famous at the time. Didn't know
anything except we were told, hey, you
should talk to him because he's a
business expert and he could help you.
So, so we had a beer with them
and what stuck with us in that that
one of the many things, yeah, in that
initial conversation was
(20:42):
audition instead of interview.
So what we did, and this is something you
could think about, which is very helpful,
is we had people come in.
Well, we would talk to them a
little bit, ask them some normal
interviewee kind of questions, but then
we'd go walk over to the sink and
(21:02):
teach them. Here's the three section
sink, how you wash dishes. We wouldn't
teach them too much. It was just a basic
overview. Yep. And we would see, you
know, maybe if they didn't learn how to
wash dishes from. I don't know, parents,
um, then they aren't gonna be good for
the job. If they didn't know how to
sweep, uh, I mean, you'd think this would
(21:23):
be obvious, uh, but it wasn't. And
you'd be able to see. Or like you can
take instructions. Yeah. Too. Right. So,
So that helped us to be able to see,
cuz, you know, as, as you've been hiring
people, I'm sure, or are about to, people
write a lot of amazing stuff on paper.
But then you get to see how they actually
work, and that's an important thing. So
(21:43):
audition as well as interview. Yeah,
and we highly recommend that 8020 sales
and marketing book. You can read chapter
17 probably a few times
before even posting a job description.
You'll learn this idea of auditioning
instead of interviewing, as well as a a
lot of other things. Total game changer.
And then maybe read 8 chapters 18 and 19
(22:04):
about hiring and firing. Those are really
great too. So check that out. So
are you ready to take the next step in
growing your business through hiring?
We've created a detailed hire readiness
checklist. We shared a lot here. You're
not going to remember it. You're probably
going to want this checklist. It's a
comprehensive guide that walks you
through both the financial and the
operational prerequisites we believe you
(22:27):
need to have in place. You can head over
to wealthwisdomfp.com/community
and join the community and get that
checklist. Also inside the Wealth Wisdom
Financial Community, again at
wealthwisdomfp.com/community, you'll
find lots of resources to grow a
sustainable business that builds your
personal wealth. Don't wait until
(22:48):
you're overwhelmed to start preparing for
your first or your next hire. Visit
wealthwisdomfp.com/community today
and get that checklist and join a
community of business owners who are
navigating this journey as well. Let's
make your hiring success story. And if
you haven't noticed, we are doing a lot
more for business owners. I mean, we love
(23:08):
that. I was just talking to somebody the
other yesterday and you
know, again, we do a lot with the
infinite banking concept with Profit
First, but having that expertise of
running a business, hiring people
really. Amplifies your business
and your business and personal intersect.
(23:28):
So the articles that Amanda puts in the
community, and I do as well, are
really, really helpful. And the
relationships that are built, again,
Brian Alexander is a key example
of people that maybe aren't the
financial foundation. Work, but you could
then use them for the various aspects
(23:50):
that are needed in your business at the
right time. Yeah. So thanks for joining
us. Hit that subscribe button so you
don't miss this whole month. We're going
to be talking about building your a team.
Today we talked about with internal.
We're going to go into some external a
team members in the future. The A-Team.
Well done. Yeah. So don't forget, live
long. I keep saying that. Don't forget.
(24:11):
You know this. Live long and profit.
Don't forget. Man, I did it again.
Write a review, post
comment, share this with right. Don't
forget in the comments. Don't forget to
do that. You know, I I
feel like I have to say that because
people don't do it. So do it.
We love it. And remember the topics
(24:33):
presented in this podcast are for general
information only. And don't forget
to only for the purpose of
provide, not for the purpose of providing
legal, accounting, investment advice on
such matters. Matters. Please consult a
professional who knows your specific
situation and make sure you know
yourself by taking these tests. So don't
(24:55):
forget, remember, and make sure they're
all the same thing. Oh, there you go.
Yeah. All right. We'll work on that until
until next time. Take care. Those are my
fillers.
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