The Biggest Hiring Dilemma: Your First Employee

Posted on by Jeremy Overton Posted in Business

When you do decide to bring on an employee, one thing is almost universally true:  it will take a while for that employee to bring enough value and revenue to the business to offset the amount of money you’re paying them.  There are really three phases of income for new employees, and understanding them can help you set clear timeframes and expectations during the hiring process and beyond.

1) The Value Gap – During this phase, the employee will be getting paid more than the sum of the value and revenue they are bringing to the business.  It’s important to let them know that you understand that there is a learning curve, and that there is a gap between these two numbers.  If they are not in a revenue-generating position, it’s important to attempt to quantify the value of their support role as it pertains to your quality of life and define expectations around what you hope to get out of the relationship (long weekends, shorter hours, vacation time, etc.)  and how soon you would like to achieve that goal (6 to 18 months, usually).

2) The Point of Equilibrium – Obviously, this is a very subjective point, but think of equilibrium in terms of the balance between the value and revenue your employee brings to the business and amount of compensation they receive for the work.  Hopefully at some point, your employee will be worth more money than they’re getting paid.

It’s important to acknowledge this achievement and continue discussions about the continued progress they need to make in order to further increase their compensation.  In exchange for the risk of hiring, managing and training this employee, you should expect to earn some profit off their continued efforts, for a while!

3)  The Profit Margin – Don’t get greedy!  The margin of profit, or the difference between the value and revenue that the employee brings to the business and the amount that you pay them cannot get too large, or they’ll decide to become your competition.  Once your employee has passed the point of equilibrium, it’s important to revisit their salary and commission arrangements at least twice annually to make sure you’re remaining competitive and continuing to profit from the relationship.  On the revenue side, your accounting systems should be equipped to provide the data that you need. On the value side, you’ll have to weigh your quality of life gains from the relationship on your own terms.

If you understand and remain aware of these three phases in an employer – employee relationship, your chances of retaining a key employee will increase dramatically.

Building Your Story – Who’s Doing the Research if You Aren’t?

Posted on by Jeremy Overton Posted in Business, Marketing, Personal

Who doesn’t want to have a Wikipedia article, a documentary about them or at least a story of their lives and the people they’ve impacted?

What makes writing this story so hard is the research that is required to tell it.  Why not compile it in real time?

The reality is that future “research” is happening around us every day all of our lives.  The once tedious task of documentation has not become as easy as leaving a voice memo or taking a picture from your phone.

The latest tools that we have available like Dropbox, Evernote, Twitter, our blogs and countless other technological advances give us the ability to gather our research real-time and look at the data later.  “What data?” you say?  Well, the truth is we don’t know if anything you’ve experienced is worth documenting or not, but it’s so easy, why not do it?

One of the most exciting things out there right now is the ability to blog without publishing it.  Seriously, for the faint of heart, you can start your blog, build content and someday in the future, blammo!  you can make it public.  This is especially valuable if you don’t feel your content is relevant, necessary, entertaining or informative (even though it probably is to somebody).

So even though I have a blog that is public that everyone sees, I have multiple blogs going on in the background that no one but me and a few people close to me have access to.

There are two schools of thought:

  1. I am who I am, and the more content I develop, “good” or “bad,” is all “ME” so it’s okay.  If people like what I have to say, they’ll be cool with the fact that we don’t always agree on everything.
  2. I don’t want to be ostracized, pigeonholed, seen as unprofessional, made fun of by my friends or to have anyone generally have anything negative to say or think about anything I write (or some derivation thereof).

At the very least,  rather than getting into a situation where in three to five years you look back and say wow, I wish I had been blogging and documenting my (insert hobby, passion, profession, etc) so I don’t have to go back and remember what my story is so I can start to tell it. . .

If you feel like you have an idea that matters to others, but you’re not confident enough to publish today, go ahead and get it out there.  At least get it time stamped and have it ready to publish and get going with it.

Oh, what the hell, why not just publish it?

“Four Filters” Approach to Business Development

Posted on by Jeremy Overton Posted in Business, Concepts I understood but didn't know what they were called

I help my clients understand balance, diversification and alignment.

Each of these terms can mean different things to different people, depending on their situation, but when it comes to owning a business, there are four filters that you must consider when developing your brand and your services.  My friend Mark B. Weaver introduced me to this set of filters:

  • The Client Experience – We start out with a dream of our ideal client experience.  Think of it like planning to build a house in three to five years. . . If you’re not willing / able to engage in this type of activity, you’re destined to fall short of your competition in the future.
  • The Staff Filter- Will your team be able to implement the products and services that you’re planning to offer?
  • The Sales Team Filter – Do your sales people have an adequate understanding of your offerings?
  • The Business Owner Filter – Does it make sense for you financially to be engaging in these types of relationships or transactions?
 
When working to improve your offerings or building your brand, try to center your discussions around making sure your products and services pass these four filters.  
 
When you’re able to align the goals and experiences of the client, your staff, your sales team and the continued success of your business, everybody wins.
 
 
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