Striking a Balance: Hiring The Right Freelancers to Help You Without Strangling Your Profits

I recently came across an article about a self-made millionaire. His advice was so simple, and yet profoundly powerful: pay yourself first. It might seem counterintuitive, because the way so many entrepreneurs handle their books is to look at what's coming due and subtract the money that has come in against those expenses. It's very easy to get into a trap of paying everyone else, but not paying yourself. (And freelancers, yes, this is another one of those blogs where I speak from experience.)

Why Not Paying Yourself Well Kills Your Business

I was part of a draining project at the outset of 2015 where I had an army of people helping me carry out the work. It was exhausting, but the revenue coming in from the project seemed great, until I actually sat down and looked at what was going out to pay the writers and virtual assistants. Everyone was being paid but me. Yikes- a big mistake. Eventually, you'll close shop or burn out if you persist in a model like this. As soon as I realized the problem with this, I terminated that relationship and focused on my other clients, bringing in a handful to help cover the income I had just lost.

Last year, I came across Profit First, and the major realization that owner pay is not just one more expense- it's a vital one. Profit First encourages entrepreneurs to flip conventional thinking on its head. The kind of thinking that gives us: Revenue - Expenses = Profit. A lot of entrepreneurs love to share how much money their company is bringing in. There's nothing wrong with this, because high volumes in revenue are telling about a company. It's an accomplishment unto itself to be able to handle a big book of business. Ask the deeper questions, though. What are you paying yourself? If you're coaching others to build a business like you, is the amount coming out for owner pay something you can be proud of?

Here's a great piece of advice from the man I'm speaking about, David Bach. He was a millionaire before he hit 30.  He's definitely a fan of the Profit First mentality, whether he realizes it or not.

"But there is only one proven way to get rich, and it also happens to be the easiest way: Nothing will help you achieve wealth until you decide to pay yourself first … [It] means just what it says. When you earn a dollar, the first person you pay is you. Most people don't do this."

One mistake I see a lot of emerging freelancers make is to hit the point where they know they need help. Then they overcommit themselves in terms of expenses. I'm guilty here, too. There are some amazing contractors and employees out there, and when you meet someone who seems fully capable of handling a part of your business, it is extremely tempting to say "yes". Then you have committed yourself to paying this individual on a contract. They might do great work. They might do less-than-stellar work. But you can easily slip into the habit of having this particular task or set of tasks managed for you. It could be social media, or perhaps answering all your customer service emails. Even if you're overpaying for it, or if your business is not at the point where you can afford this expense, it's very hard to give it up.

As entrepreneurs, we're taught to delegate, delegate, delegate. When you do it properly, it's a beautiful thing. If you're currently overwhelmed in your business and you suddenly wake up with clear reports from your overseas VA about all the emails he or she handled overnight- it's magical. If you're running a busy drop shipping store and you can completely count on your VA to put out all the fires- incredible. It's a very thin line, though.

Some people fall into entrepreneurship without much management training. With a warm heart, you're the ideal client for the contractors you hire. You're friendly, you pay on time, and you always make sure your contractors are paid, even if you aren't.

When I found myself in this trap about six months ago, I was reminded of my days teaching 7th grade in Baltimore City. Simply put, I wasn't cut out to discipline a classroom of 35 kids at a time. Rather than spend my entire day angry and yelling, I'd simply let a lot of things go so that the students who were paying attention got something out of the lesson. I didn't find it fruitful to spend 20 minutes of every lesson addressing one child who was off the wall, because there were probably a good 20-25 who were actually paying attention who might get off track if I gave that one student attention for minor bad behavior. As a result of my mentality here, I was a horrible disciplinarian. (By the way, the most successful teacher in the place? A former Marine drill sergeant who made the kids clean the school with a toothbrush on Saturdays if they acted up. Unfortunately, I never had his yelling ability.)

The same goes for my hiring people. I was too nice! I was thinking less like a CEO and more like a boss who wanted to be a friend, and this is something so many entrepreneurs do. It's very exciting when your business gets to the level of needing to hire help, but it's also easy to hire too many people or pay them too much. And hiring writers? That's a whole other nightmare I'll address at another time, because it has its own upsides but also its own unique set of challenges. (Spoiler alert: I will be extremely hesitant to ever hire another writer again, and prefer to handle everything myself.)

When you get stuck in situations like this, ask yourself, "What would a CEO do?" Would a CEO stress over whether or not someone's work was actually contributing to the bottom line? If the answer is no, because the CEO would switch functions over or cancel the project entirely, you should consider the same. Remember to walk that balance, though- you don't want to burn bridges. Evaluate all options first. If you had your VA working on a project that is no longer revenue-generating or needed, consider whether he/she has another skillset that might be suited elsewhere before severing ties.

The Digital Work Environment

Bear in mind how you're hiring people, too. I hate hourly contracts, personally, because it just raises too many questions. When you receive an invoice that's for four times as long as you thought it would take, it's tempting to want to fire the person. It puts your digital help in a bad position, too, because they feel like they have to document every single thing they are working on. I strongly recommend hiring people on a project basis, i.e.:

• Please add X data entries into this spreadsheet per week for a fixed price of $

• Please put together X PowerPoint slides based on my notes for a fixed price of $

This way, you're not paying someone to be slow (sadly, some people will take advantage of hourly projects and drag out what they're doing, or want to please you so much that they spend way too much time trying to get something right).

Also, implement monthly reviews. What did the person do for you? What was accomplished? What projects were started but are still pending? Being aware of what's going on in your business on a weekly basis is important, too, but this should be surface level. Once a month is your chance to dive into the details and determine whether it's working out.

The bottom line is that you are the cornerstone of your business as a freelancer or entrepreneur. How you handle stress reflects on everyone, your clients included. Make sure you have a model where you have the right amount of help without being overburdened. Structure your contracts in a way that you have some flexibility, but also so that both parties are clear about deliverables and expectations.

Don't hesitate to let someone go when it's not working. This is really hard to do, and yet business is also all about expansion and contraction. The model can't just be about working for everyone else- it has to work for you, too. Give people a fair chance to improve things, but do not hesitate to do what your instincts are telling you to do.

As the owner of the business, it might be hard to step into the role of manager/CEO without any training on this, but you can grow into this as long as you aware of whether or not the business is working for you.

Source : articlesbase.com