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Episode 2: When is the Right Time to Hire?

November 28, 2022

Episode 2: When is the Right Time to Hire?

“One crucial thing for business owners to understand is the budget for each of those different buckets. So, the first thing we do with our clients, for example, when setting up the allocation of the percent to each of these buckets, is looking at the actual cost to deliver what I’m selling.”

Andrea Jenson

Welcome to a brand new episode of the Cash Flow CFO Podcast. Today, I talk about one of our most watched videos on YouTube about knowing when you can afford to hire a new team member and how much you can afford to pay them. At one time or another, every person in business has found themselves wondering what they should consider when adding more staff to their team and determining how much they will pay them. In this episode, I detail the key factors to consider for your company, how to spot shortages and the best budgeting options. We also review the categories that can help a business owner decide when and how much to pay a worker. Join me and learn more details!

“So direct labor is a team member required to deliver on the sale. Indirect is your administrative position or indirect labor could also be when those client-facing team members are doing administrative work.”

Andrea Jenson

Tips for Identifying the Best Time to Hire

Knowing the right time to hire and how much money to pay the new employees is challenging. Andrea believes that once you see an increase in your sales, all other expenses, such as telephone subscriptions, rent, travel, and additional costs, remain flat; there is room for you to invest and bring in more employees. She thinks that at this point it is possible to determine whether a firm is viable and what is required to run it.

“A staff utilization schedule is used in a service-based business, and a staff utilization schedule is built to list all your team members, direct or indirect. That part doesn’t matter. You want to include everybody in the company on this schedule.”