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Whether you’re working on hiring your first employee right now or not, you should be preparing for the future.
If your business isn’t making enough to pay you, you’re not ready to hire an employee. That doesn’t mean you shouldn’t plan ahead, but unless you have more money than you need for yourself personally, you’re not ready.
The first step is to build a runway. I thought about employees the wrong way for too long. It held me back for years. You may be thinking of it the same way: I thought I should hire an employee when I knew that person would make me more than the amount of money I pay them for their salary.
Wrong. You need to get super practical about the actual value of your time. I’m not talking about the theoretical value (that’s the amount you say your time is worth). I mean actually what you can make in 60 minutes if I said “GO!”
When I say, “Go make the most money you can in 60 minutes,” the thing that immediately comes to mind for you is the thing you should be focusing on. You should be doing 10X more of that thing, but you’re not. Why? Because you’re bogged down with other things.
Those other things are the things you should be delegating. Your first employee isn’t someone you should hire when you know they’ll make you money—they’re someone you should hire when you know it will free up your capacity to work on the most important things!
They’re making you money by freeing up your time.
Highlights, Takeaways, Quick Wins
- You can delegate almost everything, you just have to put a system in place.
- Don’t be too attached to your first employee.
- Your employee’s job is to do the things you shouldn’t be doing.
- See your employees as people who free up your time so that you can focus on the most important things.
- Everyone should be building a team around them because everyone is doing things they shouldn’t be doing.
- Identify the thing that takes the most amount of time and produces the least results: that’s the thing you need to hire for first.
- Become an employer that people want to work for and have people come to you.
- Hire from your business circle, but try to avoid hiring family or friends in almost all cases.
- If you don’t have your process written down, you don’t have a process.
- Always be building systems for training new employees.
- Every mistake means you need to implement new processes.
- 08:24 Sean: Matt, do you want to talk about your taking off a year idea? You’re kind of the boy who cried wolf, at this point, with all the months you were going to take off and never took off.
- 08:39 Matt: We’re in the process right now of me letting go of the reigns and passing them off to my apprentice. I’m going to oversee everything and go from there. I want to keep on refining it.
- 08:55 Sean: There’s no way you’re going to take off a year. I’m calling it.
- 09:00 Matt: Everybody’s saying that, and I agree with everyone. It’s not so much about having a year off, sitting on the beach, with coconuts and Lambos and the sun out by beautiful blue water. That’s what people envision when you say that you’re taking a year off. My version of one year off would definitely have some vacations in there, but it would be more to do what I did at first, when I was 12 years old, when I envisioned what I wanted my business to be. There were flaws that I saw at 13 that I wanted to revise, and at 14, I made those adjustments and pivots and started to get some traction.
- 09:59 At 16, everything started exploding from everything that had been adjusted during those years. Instead of having to wait three to five years to make adjustments, because I’m working in the business and on the business, what if I took a step back and looked at everybody? What if looked at the person I’m training to be me, the entire operation, the way the customers are communicating, the way we’re getting deals, and the way we’re doing our real estate—everything! I would be stepping back and making sure that everything is running as smoothly as possible.
- 10:42 I know it’s not. Yesterday, I was talking to my mentor about different things that I do, and Sean talks to me about some things that I do, too. It’s habits, and breaking those habits is going to take time. I’ve been doing it for so long, plus I love working and getting my hands dirty. I love engaging with the clients. I want to take a step back from all of those things and make sure that the process is actually running like a true business, to where I can stop being involved in every single thing—business purchases, deals, parameters, etc.
- 11:25 Sean: Where do you see this happening? At what point?
- 11:29 Matt: Right now, I’m training my apprentice. The employees are starting to get used to me not being there. The managers are getting used to making decisions.
- 11:38 Sean: You’re talking about short term, near future. You’re not talking about years from now.
- 11:42 Matt: No, because I want to do it sooner. I sent a tweet out a couple of days ago that said, “For every business decision that you make, think about the long term before you make it.” I said that because a lot of the way I built my business requires so much of my time. That was my mistake. I should have been thinking long term, like the Lambo Goal. Once we get Lambos, let’s take a trip to New York! My business is doing better now, but back then, I was so consumed by it that there was no way I would be able to take the Lambo down the driveway. I want to structure the business better to where it doesn’t need me to be there. Everything I do can be replicated, it can be followed step by step, and if there are questions then we have cell phones.
- 12:40 Sean: Matt, you made this comment about how you want to take off a year at some point. I’m trying to figure out when that is, what year that will be. I already know that 2020 will be my seventh year since taking sabbaticals, so the current plan is to take off 2020. I think I’ll reach the Lambo Goal before then.
Matt’s Year Off
- 13:06 Matt: I’d like to take this year off before we get the Lambos, because I want it to be something that would be close to permanent. The whole reason I decided to be an entrepreneur was to work extremely hard while I was young so I could get everything—the whole machine business—going, and I could go around with Sean, coconuts, and margaritas. I want to be able to do the things I never got to do while I’m still young. That’s my mindset. That’s my plan. It depends on my apprentice. He needs to see every scenario that goes on and be able to make a decision.
- 14:09 If he can’t get in touch with me, my business is so successful because of speed. We don’t have time to wait around. Everything is a risk, and yes, we might take a bullet. We’re wearing bullet proof vests, so it’s okay. He just has to be able to make the right decisions.
- 14:32 Sean: It sounds like you have this idea, Matt, of wanting to take off a year, and you’ll figure out how to get there. It isn’t a definite plan.
- 14:44 Matt: The plan is two years. I was getting to that. I was thinking, “How long did it take me to get ahold of all of this stuff?” There are a lot of laws, restrictions—there’s a lot. Think about it. If someone was replacing you, Sean, to take over seanwes, and then go AWOL the next day, it’s going to take some time. We’re talking about two years, because this dude is rocking and rolling. He made more money his first month with the reigns than I did in five years, so he can do it. He just needs to see all of the different fires. Over time, he’ll learn how to take care of them himself, just like I did. He has his own mentor, similar to what we do.
- 15:40 He’s more into restaurant franchises, but it’s close enough. As he gains more knowledge and experience, I will feel a lot more comfortable saying, “Just do it.” I won’t necessarily say, “Bon voyage, wonderful business I put my entire life into!” I’ll just be stepping back. In January, I was burnt out because of all the things I had to do that someone else couldn’t make a decision about. The reason they couldn’t make a decision was because they didn’t know how. I didn’t teach them my process of making that decision. That was a mistake, and it finally caught up to me. I want to be able to write down all these different processes and how I make these decisions.
- 17:07 Sean: For Matt, the end goal is to get the business to a point where he can pass it off to someone who can run it.
- 17:14 Matt: The real end goal is what I call the Lambo Goal. One of my employees told me the other day, “I love your mission. It’s not about the money, it’s about the people and using money as a tool to help the people.” That’s the thing. I don’t want to constantly be worrying about the money and making it. I’ve built a machine. We have a saying at the business, “Today we’re going to print money.” By that, we mean that we have so much work and such a volume of people to get it done that it’s like we’re printing $100 bills. I want that machine to keep going in the closet, and I want to be able to open the closet and pick and choose what I do.
My goal isn’t about the money, it’s about having the right tools to do the things that I want to do in life.
- 18:32 I have a son who’s two, and as he gets older, I’m going to want to teach him, not necessarily to do the same thing, but I want him to have the mind of a billionaire. I want him to be able to be humble and have the heart to reach out to people, to help them, encourage them, and get them on their feet. I had an employee yesterday who was so thankful that he could take one of my trucks home. His was broken, and he was saving money to fix it so he wouldn’t go into debt. He heard Sean say that debt is death, and he truly believes that.
- 19:18 He said, “Would you mind if I paid one of the other guys to pick me up and take me to work?” I said, “No, just take the truck. It’s just sitting there.” We have to write down the mileage, because it’s strictly for business, so he said, “What about the mileage?” I said, “Don’t worry about it. Just stop at Auto Zone and pick up something that we need. There’s always something.” He said, “You know, Mr. Matt, I’m going to work for you until the day I die.” That’s why I do what I do. I want to help people and make a difference in their life.
- 20:03 A lot of these guys who work for me had rough beginnings, or they never truly had the direction that I had growing up. I was blessed with parents who gave me a direction and the tools I needed to get where I am today. A lot of the people that work for me and that are around me don’t have the direction. They don’t have the tools. For me to provide those things, I need experience and I need resources. I’m gaining those as much as I possibly can. The real reason I want to take off this year is so I can get closer to my overall goal, beyond the Lambo Goal.
- 20:43 Sean: Matt, you have something that is able to help people, that’s able to support you and your family. It gives you freedom, and it’s a well-oiled machine now. It wasn’t like you just got this business in a box with 50 employees. It started with the first employee. It started from the beginning, where you hired the first person. A lot of our listeners aren’t in a place where they’re ready to hire yet, but they want to think ahead. That’s part of why they listen to this show. They want to know what to think about before it happens. They’re wondering, “How do I hire that first employee? What are the things I should be thinking about right now before we get there?”
- 21:28 Maybe they are looking to hire their first employee, and they want some insights. The purpose of this episode is to get really practical about hiring your first employee.
The Value of Your Time
- 21:49 If you’re thinking about hiring an employee, you need to be thinking about what your time is worth. There’s theoretical value and actual value. Theoretical value is the value you might put on your time for clients, if you charge by the hour. You would say, “My time is worth $50 an hour, because I have an hourly rate that says $50.” You’re not doing client work every hour of every day. You’re doing other things, you’re running the business, and you’re not getting paid for all of that time. That’s theoretical value.
- 22:28 The actual value of your time is what you can make in 60 minutes. If I said, “Right now, I’m going to stop this episode and set a stop watch for 60 minutes. Leave, and come back in exactly 60 minutes. I’m going to stop the stop watch. How much money did you make?” That is the actual value of your time. It’s what you can do in 60 minutes. Think creatively here. If I told you to spend the next 60 minutes making as much money as you can, what would you do? Hopefully, at this point, something comes to your mind. Something surfaces, and you think, “If I only had 60 minutes and I needed to make the most money, I would be spending all of my time on this.”
- 23:29 Hopefully, something comes to mind. That thing is the thing you want to do more of. You need to do 10X of that thing. In order to be able to do that, you have to free up your capacity. There are a lot of things in your business that need to be done in order for you to be able to do this one particular thing. If you’re not doing them, then the business will fall apart. That means that you need help. That exercise should give you clarity on the things you need help on. Anything that was not that thing that came to your mind when I said 60 minutes on the stop watch is something that you can delegate.
- 24:13 Matt: You might be thinking, “Well, not really. That’s something I have to do.” There’s always a way to figure out a process to do everything. Gary Vaynerchuck said that you shouldn’t be doing 99.9% of everything in your business.
- 24:34 Sean: 99% of things don’t matter, he said.
- 24:39 Matt: He said that because it’s so true.
You can pretty much delegate everything, you just have to put a system in place.
- 24:47 You just have to write down the instructions. You might think, “No, it’s a long process. Only I can do it.” You’re making a decision. You’re following steps in your head to get this done. What if somebody was doing that, especially if that was their sole job? They would get 100 times better than you. Somebody asked a question about this, and the first thing that came into my head was, “Write it down.” Write the tasks down. After you write them down, break them down. If someone was going to take over your job tomorrow, what steps would they have to do to get that task done?
- 25:27 Sean: I like to keep asking myself, “Why?” Ask yourself why. Maybe you think there’s something you can’t delegate because someone else wouldn’t get it, but we’re not talking about things you shouldn’t delegate (Related: e045 The Power of Delegation). We’re not talking about something that’s your voice or your vision. If there is something you should delegate but you think someone else won’t get it, ask yourself why. Break it down. Write down the steps and the thought process for everything, and at every point, ask yourself why and ask yourself why again.
- 26:05 Eventually, you get down, deeper and deeper, and you distill it down into a principal that can be taught. “Well, I do this because that. I do that, because this other thing. I do that, because it’s what we stand for. We don’t discount,” or whatever the thing is. If you teach that to someone else, they can make decisions off of it.
Don’t Get Too Attached
- 26:31 Matt: Maybe you get an employee and you have them do one thing and they’re doing really great at it, and you try to add something else and they don’t do well. In my business, we have an employee agreement form that has everything they’re going to be doing. It also has a general clause saying, “You might be doing other general contracting work, such as …” They have to go through this and make sure that they agree with everything. If for some reason they’re not good at whatever it is, we have to decide whether to keep them on what they’re good at or get rid of them and get somebody else.
- 27:22 You’re in business to do business. You’re not here hosting a charity event to have people come in and attempt to do your projects. These people need to be capable of doing these things. Obviously, there’s going to be a learning curve, no doubt. It could be a couple of months or it could be a year. If your first employee, especially, is good at a couple tasks but they’re just not getting the others, maybe you need to hire another employee.
Don’t be too attached to your first employee—some businesses fail because of that.
- 27:59 Sean: What do you mean by “attached”?
- 28:01 Matt: With that first employee, if you’re anything like me, you become nice to them. You make them a part of your family circle within the business. You become attached to them. When it comes to making a decision like firing, that’s out. I got really attached to my first employee, but he couldn’t do everything I needed him to do. As time went on, I started doing other things, and he didn’t want to make the transition because he got comfortable, so I eventually had to let him go.
- 29:19 I ended up rehiring him later on for another business. I see that a lot. People say, “He’s my friend!” No friends. My family gets mad, because they say, “Family, friends!” No. Friends are friends. Employees are under the business. When I make decisions for the business, those are business decisions. If I make a friend decision, there are no real consequences there. When I make a business decision with an employee, there could be a gain or there could be some sort of consequence. Some people hire their friends and then they say, “It didn’t work out!” Think about it—your friend is not an employee. You tell an employee what to do. With a friend, they’d say, “I thought we were friends. You’re going to ease up on me, but I want to get paid the same amount.”
Employees Are Investments, Not Expenses
- 30:52 Sean: The way I used to think about it was, “I can’t bring on this employee until I know they’re going to make me at least as much as I have to pay them.” This is past Sean. He thought, “I can’t bring on an employee until they can make enough money single-handedly to pay for their own salary.” That’s the wrong way to think about it. Don’t think about it that way. Your employee’s only job is to do the things you shouldn’t be doing to free up your capacity to focus on the right things. That’s it.
- 31:41 Matt: I used to think, “If this employee isn’t making me money while he’s working, I can’t have him as an employee.” Then I thought, “What does an employee allow me to do?” I had to make the mental shift of adding an employee and paying them when they weren’t really making me money. I thought, “When I leave a job site and there are two guys there, that’s four hands. That’s work being done, even if it’s running errands.” We have a lady who brings coffee and food to the guys. Technically, I shouldn’t have that, because that’s an extra expense.
- 32:44 That would be me. I would bring water, Gatorade, coffee, and snacks to the guys. What if I hired an extra pair of hands to still be able to do that? Don’t think of it as, “The employee has to make me money.” Think of it as a clone of you, an extra set of hands that’s doing exactly what you would be doing.
See your employees as people who free up your time so that you can focus on the most important things.
- 33:18 Sean: The more I think about past Sean, the more I realize how many people are in this place of wanting to be solopreneurs. Just me, doing my thing. I think about this person, and I think about a particular listener we have—why are you not working towards hiring? Why? Everyone should be, because I can’t picture a person who isn’t doing things they shouldn’t be doing. Everyone is doing things they shouldn’t be doing.
- 34:00 Matt: What would the excuses be for the old Sean? Just because the employee isn’t making you money?
- 34:07 Sean: It’s like, “I can do this myself. I’m good enough at these things. Other people probably can’t do them as well as me.” For other people, maybe it’s money right now, but that’s just a temporary thing. We’ll get into the practical money thing in a moment. I think everyone should be building a team, because everyone is doing things they’re not supposed to be doing. It doesn’t matter if you enjoy doing those things—you’re being foolish!
- 34:46 Matt: What if you enjoy calling yourself a solo entrepreneur?
- 34:49 Sean: I did. It was silly, because as much as I could do the “Sean Show” and set up the lights and the cameras and press the Start Record button and then run behind the desk and sit there to do the Sean Show, even though I could do that, how silly is that? I could record more shows if I had other people doing the lights and the cameras, even if I liked doing the cameras, which I did. I used to shoot my own videos for YouTube, courses, or whatever. I used to do that but it’s silly. Why are you doing your own payroll? Why are you doing your own accounting? Why are you doing your own taxes? Why are you doing your own videos? Why are you editing your own podcast? Help me out, Matt. What are some more?
- 35:53 Matt: For us, a big one is accounting. We have to have people constantly monitoring everything that’s bought, the money that’s owed—there are so many things.
- 36:15 Sean: It’s split focus. I was spending 80% of my time not even doing the things that I was good at. Some of the things I was good at, but it wasn’t the real work that I wanted to be doing, where I had a real impact. I wasn’t spending hardly any time on that, and the time I was was split by my fractured focus on all these other things that I had to do, because I was taking it all on myself. Work towards having a team. Work towards delegating. People are struggling with this. Maybe they’re not there yet. Maybe they’re thinking about it, but they’re still trying to figure it out.
The Who, What, & When of Your First Hire
- 36:52 Elliot says, “What are the signs that you should start thinking about hiring your first employee? When?” The first thing is to make money. When I said 60 minutes on the stop watch, what is the thing that came to mind? Do that. 10X the amount of things you’re doing in that area and make some money and save it. It’s what Matt and I talk about with having runway. Instead of thinking, “I need to be making enough or I need to hire an employee who will make me enough to afford to hire them,” you need to come up with a runway. We’ll talk in a moment about how long that should be, but this runway is saved up money, cash in the bank that will cover someone’s salary for X number of months.
- 37:57 You hire them purely to free up your time. The first thing you have to do is identify the things you shouldn’t be doing. Here’s the list. There are things that you’re not good at. You shouldn’t be doing those things, and those are easy to give up. There are things that you’re good at that you shouldn’t be doing. Those are hard to give up. Think about that for a moment. Here’s the hardest one: things that you love doing and you’re good at, but you shouldn’t be doing. All three of these are things that you need to give up.
- 38:43 Now, the fourth is the only thing you shouldn’t give up, which is the things that you’re absolutely the best at that no one else can do. Those are the things you do. That boils down to voice and vision, like we talked about in the last episode on delegation. Don’t kid yourself. There are very, very few things that no one else can do. Be super honest with yourself, and this takes a lot of time and reflection. That’s the criteria there. Once you identify that, you know all the other things that you need to delegate. Identify your greatest bottlenecks and your greatest pain-points.
Identify the hardest thing that you do,the thing you’re the worst at, that takes the most amount of time with the least results, and that’s the thing you need to hire for first.
- 39:36 Figure out what the position is, what that person will be responsible for, and what you would pay them all before you even hire someone. Then, you need to come up with a runway. That amount, say it’s three, four, or six months, is the amount you need to make and save in that bank. That’s what we call a runway. Step one, make money. Do more of the thing you’re good at. Sacrifice. Stop partying, games, and bowling, and save up some money for a runway. As far as how long that runway needs to be, I would say six months without a plan, because I would hope that in those six months you could come up with a plan.
- 40:24 Or, you could be a little more aggressive and have maybe three months with a plan. Matt and I are a little bit more aggressive, because we know our own abilities. We know, “If I get someone here and I can focus on this or that in the next three months, I’m going to make that back because I’m focusing on things that will make money.” We know that, so we have a plan, which means that we can have a shorter runway. Have a financial runway long enough to fit your plan.
- 40:54 Matt: Whenever we hire an employee, even when I hired my first employee, I thought of it this way: “I’m going to invest this much in this employee, and I’m going to make this much off of them helping me.” It was an investment into the employee, not an expense. It wasn’t money we were losing, but money we were putting into this person that we were going to get back. It’s important to think of it that way. As small business owners, it’s easy to lose sight of investments and expenses, because everything looks like an expense. Money is usually tight, because there are so many things to put the money into. An employee is a wonderful investment that can break you or make you.
- 41:51 Sean: The first thing you need is more money than you need personally in your business. Some people are still distracted, and they think they’re in a place to think about employees. If you need $45,000 a year to pay your bills and support your lifestyle and your business is making $45,000, you’re not in the place to hire an employee. You’re in a place to make more money. You can work longer, harder, smarter, or cut back the expenses of your lifestyle to get more money. You can keep going the same pace, but you don’t get employees, so you have to focus on doing things you shouldn’t be doing.
- 42:55 You need more money. Get the money first. Then start thinking about employees. If your business isn’t making enough to pay you what you need to survive, you have other problems. It’s not time to think about employees. The time to think about employees is when you have more money than you need personally.
- 43:20 Matt: We’ll save up about a month worth of runway for an employee, but in the beginning, it was closer to six months. There were so many expenses in the beginning. Six months is probably a good rule of thumb.
Filtering Potential Employees
- 43:36 Sean: Sarah says, “How do you prepare an interview? What are the key questions to ask according to you, besides skill-oriented questions?”
- 43:54 Matt: Sean heard this from somebody, and then we had a conversation about it in a previous episode—talking to the employee about how you could help them accomplish their goals and dreams (Related: e037 Reaching Your Goals by Helping Your Employees Reach Theirs). I think that’s really important, because then it helps the employee think of this job as more than a job. It’s going to help them get wherever they’re wanting to get to, and that’s huge, because they won’t just treat it like a job.
- 44:19 Sean: That was a really big realization for me. This guy would ask, “What’s the one goal you have to achieve before you die?” He wants to get their big vision, and he takes it on himself to say, “It’s my job to achieve that for you.” That gives you some clarity on helping your employees get to where they want to go. I’ve been growing and learning in that in the past six months, even, hiring people, and figuring out that there are different ways to help people achieve their goals. People have different goals.
- 45:00 The job can play different roles in that. Besides skill-oriented questions, my unique advantage is that I have the Community. I don’t have interest in hiring people who aren’t in the Community, because there are such great people here. It’s a really nice filter. Alex said, “Should I look to hire from the inside circle of connections or go with broader options?” I think he’s talking about hiring people you know or outside of that realm.
- 45:44 Matt: I do not like to hire friends or family. I will make exceptions for certain people, depending on their character. I’m always looking for employees, even if we don’t really need them right away. We can run the operation fine the way we have them. If a certain person comes up and we have an engaging conversation or I see some of their previous work, maybe I’ll hire them. Lots of times, I’ll be talking with another investor or another client, and I’ll meet with them. A lot of it is outside of my inner circle, but I don’t really have a community. My community would be my group of investors, clients. We all ask each other, “Hey, do you know somebody for this?”
- 46:54 They’ll say, “Oh yeah, you need to talk to Billy. He’s really good at that.” I’ll talk to Billy, and Billy is hired the next day. It depends. Have you built that business circle? That’s different than an inner circle of family and friends.
If you have a business circle like the seanwes Community, hire from that, but stay away from hiring family or friends.
- 47:30 Sean: That can work really well, or it can go horribly. For me, I’m naturally very objective and logical, so the people that I know that have ended up working for me, like Cory or Laci, who is my wife, understand that I am, first and foremost, objective. This is business. We’ll make business decisions here. I have no problem, because it’s a logic thing for me. It’s ones and zeros. We’re in the business mode right now. This is the job. We understand contexts. This is how things go. This is what’s acceptable. This is what’s not acceptable. If that criteria isn’t met, you’re done.
- 48:28 For me, that doesn’t mess with my end of the relationship with them, but it could potentially mess with their end of the relationship. It depends on how mature they are and how well they’re able to segregate and contextualize the multiple relationships they have with me. I think that’s the only way it can work, if you are rigid in your contexts and the multiple relationships you have with this person, and they understand that as well.
- 49:02 Matt: It depends on the person. I like what Sean said about how you have to give the right context, because it can be really easy for friends to get bent out of shape because you tell them to do something or you get on them because they made a mistake. They won’t take responsibility of that mistake, and that could ruin a friendship or a relationship with a family member.
- 49:40 Cory: I think it’s rare that it works out. I’m thinking about family members right now, but I think it’s even more rare with friends. It’s very different. You have to really know what you’re getting into before you do. I knew a friend who hired his younger sister, and they were miserable the whole time. It was terrible, it was ruining their lives. They lived together at the time, and it didn’t work out for them. I don’t know why, specifically, but you have to really know how that person works.
What It Takes to Hire Family & Friends
- 50:19 Sean: You know if you’re ready if you’re willing to lose that relationship over the business. In the context of the business, the business comes first, before your personal relationship with that person. If you don’t get that, you don’t get to hire them. You must be willing to lose the personal relationship you have with the family member or friend you’re hiring for the business. If that sounds wrong or bad to you, you don’t get to hire them. You’re not ready to hire them or the right person to hire them.
- 51:03 That is the only way it will work. Otherwise, you will make subjective, emotional, compromise-laden decisions that will tank your business. You can’t afford that.
- 51:18 Matt: If you haven’t even gotten your first employee and you’re barely affording it, every decision that you make is crucial to the business. You’re either going to make or break your business. Lots of times, people tank their own businesses because they’re trying to grow too quickly or because they’re making wrong, emotional decisions.
- 51:36 Sean: Or maybe they need to let people go, but they won’t. In this case, they are an employee who happens to be a friend. It’s why you have the phrase, “Business is business.”
- 51:56 Matt: Look at Sean, Laci, and Cory. It can work. You have to be very clear with them. Make sure that they see eye to eye with you on the goal and the direction of where you’re trying to take the business. They have to know that their position is crucial for the business to get to that point, and if they don’t feel any sense of responsibility, they’re an employee. I tell my employees, “What you’re doing is important. You’re helping us as a team, as a whole. You’re not just pulling your weight to get your paycheck and hit the road running, but we’re a team here. You’re helping all of us get where we want to get to.” If they don’t see eye to eye on that, then they need to hit the road.
Have a Training Process
- 52:44 Sean: Sarah says, “What’s the #1 mistake you (and Matt) think most companies do when or after they hire a new employee? How would you fix it?” We talked about this a little bit before we started, and Matt said, basically, training.
- 53:09 Matt: When I worked for the government and this engineering firm and conservation group, the training/on-boarding experience was terrible. They were nice to me, but lots of times I was filling in for someone or helping someone, and there was never any process. Their training was really vague.
If you don’t have your process written down, you don’t have a process.
- 53:41 That was the whole thing. I wanted to know if there was a handbook and how they did things. What was the process? Does this team give us their sketches and then we build a model? They said, “We just do what we do,” but what does that even mean? You should have a really good training for the new person. Constantly be on them and ask them questions about what they’re doing. We do that with our employees. I know they know how to do their skill, but we say, “Here’s our process. Can you do it like this?” If they have something to add onto that process that will make it more efficient or better, than we add it to our written down process. It’s not, “You’re going to do this today. I’ll see you when it’s done.”
Always be building systems for training new employees, adding to processes or creating them as you go.
- 54:57 Sean: If you do something more than once, automate it. Not if you do it more than ten times. The same is true for processes. If you’re going to automate something, that might mean systems, programs, macros, or software, but other times it’s using people. When automation involves people, there need to be processes in place. Always be aggressively investing in automation, systematizing, and processes. If you do it more than once, come up with a system or a process for it and automate it.
- 55:39 Matt: Everything can be automated. Lately, I’ve been following a lot of billionaires, because I want to see what makes them tick. How do they make their decisions? What makes them think of what they need to do so that whole company runs as a whole? They all said something that keeps standing out to me, which is to be always training the employees in the right way. Also, they make sure that they have systems to back up their training. It’s not something they made up on the fly. Everything has been tested and revised as a system.
- 56:37 Sean: Adina says in the chat, “Look at a company like Starbucks. Howard gives a general road map and the creative department provides the voice and vision of that road map. Creative directors come and go. Copywriters come and go. Designers come and go, but the overall feel of the company remains intact.”
- 57:01 Matt: These are successful companies, and it’s working for them. We need to think ahead. Right now, you may not be able to do everything that Starbucks is doing, but build out the processes as you go, especially a repetitive task or project.
Gaining Your Employees’ Respect
- 57:21 Sean: Cita said, “I need to hire an employee, but I have this fear that they won’t do what I ask them and they won’t respect me. So the question is, how to position yourself as a leader when the employee is your first hire?” Someone who doesn’t respect you isn’t your employee. It’s like client work. If you’re chasing clients saying, “Please work with me,” they’re going to push you around and tell you what to do, because they know that you’re desperate. It’s the difference between that and being a professional with an impressive portfolio full of case studies. Clients see that and ask for permission to work with that person.
- 58:13 They come to you in a deferential position. When it comes to hiring, you don’t want to chase after people. You want them to come to you. We can go deeper on that, but be someone that people want to work for. I’m not saying that that’s easy, simple, or that it happens overnight, but that should be your goal.
Become an employer that people want to work for and have them come to you.
- 58:47 If they do that, there isn’t going to be a lack of respect or an absence of them seeing you as a leader.
- 59:05 Matt: If you’re getting an employee, you’re getting another set of hands, that’s cloning you. At this point, you should have your system and processes down. You should be somewhat of a master at your skill, your trade. You should be smarter than this employee and you should know the skill better than them. You should know the business 100 times better than them. They will respect you if you have more knowledge than them, because they will follow your processes. Yes, they might know something of the trade, but they will follow your processes and your systems. By them submitting to your processes and your knowledge of whatever it is that you do, they will automatically think of you as a leader.
- 1:00:06 They’re going to come to you with questions. They’re going to be unfamiliar with your processes, and they’re probably not going to know that skill or trade as well as you. That was something I had to learn at a very young age. It was difficult for especially older people to listen to me and let me be the boss. They thought, “Look at this little schmuck.” I don’t want to be known as a schmuck! I want to be known as a business owner. How do I get from that to being “Mr. Matt”? I had to consume a bunch of books, fail a lot, and get a lot of experience, to become a knowledgeable person within my industry and know my trade backwards and forwards.
- 1:00:56 It’s a continued learning process, but I was better than my first employee. That’s where you need to get to first. Obviously, you need to build your runway, but in the process of doing that, you’re going to make mistakes and gain experience. Hopefully, you’re continuing your education with your trade or business. By doing that, because of your knowledge, they will automatically submit to you. I guarantee it. They’re going to look at you and say, “You’re this library!” You’re going to do it better than them. That’s what I had to do, and that’s what I still do for especially my older employees to take me seriously.
How Hiring Changes Business Mentalities
- 1:01:43 Sean: This question is from Bryce. He says, “How has your mentality about business shifted since hiring your first employees?” The first hire was Cory. I hired him in 2014, and I brought him on because I wanted to do seanwes tv, the video show. I could kind of do it, but not to the quality that I wanted. It would have been too much for me to do it on my own, so I wanted to hire that out. Obviously, Cory is good at it, and he does it better than me, so it just made sense. That was a pretty easy hire.
- 1:02:31 In the beginning, you’ll make easy hires. The criteria I gave you for what you shouldn’t be doing, what you should be doing, what you’re good at, and all of those things will let you start off with the easy hires. Then you get to the harder hires. My mentality has shifted in that the “harder hires” have become easier for me, because I see the value of my time differently. It’s no longer about hiring someone that’s going to make money, but it’s about hiring someone that’s going to free up time, focus, and capacity, for me to make decisions, have clarity, and work on the things that matter.
- 1:03:28 Matt: For me, it’s the clarity. The whole reason I want to take a year off is because you get to look at everything that’s going wrong, that’s going right, and you get clarity. I have a video person, and he’s doing so much better than I would have done. That’s his sole job. I’m getting this time back. That investment was worth it. You can stand back and look at all of the investments you made, ones that worked and ones that failed, and you can make those adjustments, pivot, and continue to grow your business. Employees are a pain, because they’re human beings, not machines. They’re not following some code to stay within the lines. Employees will push the boundaries.
- 1:04:20 Someone was asking earlier about how you monitor someone that’s remote. I have quite a few remote employees, and the way I do it is that they know what they have to do, and lots of times they’ll push the limits.
- 1:05:19 Sean: I have an answer on the remote employees thing. I have a bunch. It starts with hiring the right people. I don’t care about credentials or paperwork. What is the person’s character? Do they have integrity? What’s their track record? That’s pretty much all I care about.
- 1:05:54 Matt: Do they believe in the vision of the company?
- 1:06:11 Sean: The right person has the integrity to do the work, and when you communicate your vision, like we’ll talk about in a future show, they know where they need to go. They know what their goals are. They know what the end result needs to look like, so they know that they need to get their work done. I don’t make anyone track hours. I don’t make them clock in. Don’t worry about it.
- 1:06:36 Matt: When you hire people like that, it’s no doubt that they’re going to do their best work. Employees are a pain in the sense that they’re human. Some of my employees will do something, and I’ll say, “How did you miss that? How did you not use the right material when it’s sitting right there?” Sometimes, you just wonder what they’re thinking.
- 1:07:39 Sean: I assume that I would have been the person to make that mistake. I’ve made mistakes, but I forgive myself. We are slower to forgive other people. We forgive ourselves because we say, “Oh, I messed up. I won’t do that next time.” When someone else messes up on your behalf, then you’re livid. You have to say, “They’re acting in my stead, so they made the mistake I would have made for me. I didn’t have to be there to make it.” Now, just make sure they don’t make the same mistakes again. Every mistake means implementing new processes.
- 1:08:16 If there is already a process in place for preventing this mistake, now there needs to be a new micro-process to make sure you check the process before you do the thing that ended up being a mistake. The original process would have prevented it, so if you’re not looking at the process or following it, you need a new process. Any time you walk past this line, I’ll put a piece of blue tape on the floor. Any time you walk past the blue line, you need to look at the blue piece of paper that tells you what to do. That’s a new process.
- 1:08:50 Matt: Employees are always complaining about the process. I say, “Did you do the final inspection check sheet?” If processes aren’t followed, accidents happen. I like something that Gary said yesterday, “Stop thinking that your employee is going to do everything you want to do or care as much as you care. They’re an employee. They’re not the owner.” It’s so true. I get frustrated with my employees because I have this expectation that they should do it exactly like I would do it, but they don’t own the company. They’re not getting paid what the owner’s getting paid, so you can’t expect them to care as much as you do.