When to consider hiring first employee


#1

Im slowly building my client list consisting of luxury restaurants in my city. When did you hire your first employee and what did you pay them?


#2

I was solo for a season, hired first employee beginning of second season, few more year after.

Check into work comp and insurance rates. it’s usually based on annual sales and payroll taxes.

Our starting wage then was probably $10, now $13 timing really depends if you have work or not or if you are interested in working larger jobs requiring two people.


#3

Been working solo doing residential in Asheville, which is full of rich old money. Did hiring an employee increase your profits by double or 1 1/2? Would you suggest it to s guy who’s been in business for 3 months? Looking to hire one for spring.


#4

In my case, I already had 5 years experience washing windows and the person I hired had less so not going to double income.

Typically, an owner will generate higher level of income than an employee.

Each person running a single employee or a crew will generate different levels of income based on many factors. Organization of the leader, price, structure, efficiency, wages.

I figured early on an employee had to generate $60,000 in sales to be worth it, currently they’ll generate a little more than that mainly because my jobs are much more tightly scheduled, we’re getting more done in a day, experience levels of the employees and price structure dropping the lower-paying jobs over the years.

Back to your question if hiring after 3 months really depends on if you have the work load to carry the wages and your experience level. Meaning, if you’re still trying to figure things out from pricing scheduling the whole works of running a business it’s kind of hard to throw an employee in there also you’ll have much much more down time and you’ll be paying the employee for a lot of that.


#5

Good info. Thank you


#6

You’re in Asheville? I’m about an hour west, over in Sylva. I go to Western Carolina Univ. Pretty cool. Didn’t realize there were guys on here that were close by


#7

I do work in sylva and Waynesville, etc, what’s the name of your business? What’s your number, I can give you some jobs if you’d like


#8

Haven’t gotten up and running quite yet. That’d be cool though. Just looking to do storefronts for now. I’ll let you know when I get things going. Should start work here in January. All my equipment is back home in Charlotte. When I get back from Christmas break I’ll get started. Hopefully can find some work with all the cold weather.


#9

You doing storefronts in sylva?


#10

Gonna try to. But not my main target. Probably looking to do other towns too like waynesville, franklin, etc. Maybe even going up into Tennessee.


#11

What kind of vehicle are you using?


#12

Little 2006 chevy Colorado. Have a tool box mounted in the back that I plan to store everything in pretty much.


#13

I’ve got an 06 Dakota quad cab with contractor rack im looking to trade for a Colorado


#14

Eh sorry. Want to keep mine. I like it, no reason to change. Plus I’ve replaced so many things on it that it’s an investment now. Should run good for awhile just because of everything I’ve done with it.


#15

Hired my first guy this year… he’s worked out great. Started out in 2015 so this is my third year of operations fully on my own. I found that the work-load was getting to be a bit much and since I’m in my early 40’s I saw the writing on the wall and put an ad out.

I would caution that a guy should have some savings built up that can act as a buffer between paying out your guy and the time it takes for cheques to roll in.

My accountant handles payroll for a reasonable fee so the admin of having an employee is not so bad I find.


#16

The work comp, payroll taxes and general liability insurance rates are larger costs attributed to having employees.

Safe to say the employee must generate a high enough voume of work to compensate the many fees associated with employing them.


#17

Good points. The only way to know if an employee will be worth it is to try him out. After the first month it was clear to me that having workers is the way to go… provided I can keep their wages to around 30% of gross.


#18

Just for my own clarity, are you saying that if you have a 100 dollar job, worker grosses 30 bucks?
Or 30% pay, taxes, WC, payroll all included?


#19

he said “wages to around 30% of gross”

this is pretty much the standard cap of % one wants in any service biz

payroll burden (employers matched portion of taxes, adds around 13-15%) and work comp are on top of this 30%
$30 wages

  • 15% employer payroll tax $4.50
  • work comp ~20% = $6

=$40.50 employer cost per $100

that leaves a little less than 10% for the rest of the “cost of service” expenses

one wants total “cost of service” (operations) below 50%


#20

Much of this is based on what the company pricing model is.

Secondly, how much your compensating an employee based on their experience. The experience level of the employee will vary with how much work they can get done.