Is It Time To Hire Your First Employee?

Mitchell Harper, Bigcommerce Co-founder & Co-CEO

You’ve launched your Bigcommerce store and you’re getting consistent sales. You’ve nailed your supply chain (whether it’s one-of-a-kind products shipped locally, or commoditized widgets that you ship worldwide) and are generating healthy margins. Nice.

But you’re working 14 hours a day. Every day. Not nice.

Is it time to hire your first employee? Let’s find out. But first, let me tell you a little story from the early days of Bigcommerce, circa 2009. See if you can relate…

2009 Rewind

Way back in 2009, Eddie and I had the crazy idea to launch an e-commerce platform that would generate billions of dollars in sales for tens of thousands of businesses worldwide and employee over 200 people.

Well, not really…

Truth be told, we just loved building cool software. But the two of us didn’t scale to build a company the size we knew we were capable of.

When we started, I was wearing about five hats. I was the VP of Engineering, the VP of Product, the VP of Marketing, the HR manager and CEO. And while it was fun, I was so involved in tactics I never had enough time to focus on strategy.

By 2010 Bigcommerce had gained serious, serious traction and was the fastest growing e-commerce platform in the world with over 10,000 clients in the first year. So we both had to make a serious decision. Do we continue to wear multiple hats, or do we go out and hire our first manager to help expand the business?

In other words, do we “buy” some of our time back, by handing over a critical business function to someone who has done it before, or do we continue to learn as we go? By making the decision to bring someone else into the executive team, we gained a few things:

  1. Time. We got back 10+ hours per week (each) by handing over a function of the business to a new manager.

  2. Focus. The more you have to manage, the less effective you will be. By “offloading” a function of the business to someone else, we could focus on what mattered the most, which was figuring out how to grow the business even faster.

  3. Skill. I know what I’m good at and most importantly what I’m not good at. And I got to do more of what I was good at than what I wasn’t. Most people will tell you to improve on your weaknesses. That’s wrong. Spend more time doing what you’re good at and delegate the other stuff.

Fast forward to today and we have an amazing executive leadership team. This has allowed me to shift my focus from 90% tactics (doing) and 10% strategy (planning) to 100% strategy. This more than anything has made a huge difference in the trajectory of the business, which has grown well over 1,000% in the last 3 years.

What’s Your Strategy?

There are a few things you need to weigh up when thinking about hiring your first (or second or third) employee to help build your business, but the most important thing to ask yourself is this: what is your strategy to grow the business?

If you don’t have a well thought out strategy to grow the business, then chances are you’re spending too much of your time doing (tactics) as opposed to planning (strategy).

Spending 14 hours a day packing orders and answering emails won’t help your business grow if you don’t understand your customer acquisition cost and lifetime value, for example. You can very easily hire someone to fill orders and answer emails, which could give you back 20 hours a week to focus on strategy, which is:

  • Understanding your core business metrics:

    • Customer acquisition cost

    • Lifetime customer value

    • Conversion rate

    • Visitors per day

    • Average order value

    • Profit margins

    • Overheads

  • How to attract more customers while driving your acquisition cost down

  • How to drive production costs down as order volumes increase

  • How to provide customer service that drives repeat purchases

  • When/if to expand your product line and marketing channels

Having a strategy will allow you to lay out a few key milestones over the next 12 months to grow your business quickly and efficiently. Once you understand your metrics, margins, etc, try answering these questions:

  • Why is your end goal from building this business?

  • What is your revenue target for the next 12 months?

  • What is your profit target for the next 12 months?

  • How many orders will you need to reach these goals?

  • How many employees will you need to reach these goals?

  • What will each of these employees cost you?

  • What will each of these employees do?

There are two final questions to ask:

  • What do you spend most of your time on today?

  • What should you be spending most of your time on?

The bigger and more successful your business gets, the more your answer to the last question should be strategy. And you get to focus on strategy by hiring capable people which you can delegate day-to-day tasks to.

Employee Number One

Hiring your first employee can be a scary thought, but if you’re generating enough profit and believe in your business, you’ll be absolutely amazed at how much just one person will help fast track the growth of your business.

Whether your first employee spends all of their time packing orders, taking calls or managing the books, you’ll start “buying” some of your time back to focus on strategy and understanding your metrics.

Here are some tasks your first employee might help with:

  • Accounting and book keeping

  • Processing and shipping orders

  • Customer service emails and calls

  • Ordering more stock and tracking inventory

  • Writing content for your blog to improve your search rankings

  • Managing your social media accounts

  • Creating marketing campaigns

  • Cleaning your office/house

Your first employee might not even be full time. You could hire someone part time to help run the business day-to-day or even hire someone remotely to help with customer service emails for a few hours a week. Whatever they do, it’s a great start.

It’s All About The Metrics, Baby

The best entrepreneurs understand the metrics of their business and can recite them in their sleep. They also go on a never ending quest figuring out how to improve their conversion rate, repeat order rate, average order value, conversion rate and customer service experience.

Hiring your first employee will give you more time to do just this. And once you understand your metrics (using the reports in Bigcommerce and free tools like Google Analytics), you can improve them.

Remember: you can’t manage what you don’t measure. Track your key business metrics and watch them like your life depends on them. Because in some ways, it does.

So hopefully that’s given you a bit of an insight into why hiring your first employee is a good idea. It’s a scary step, but you’ll wonder how you ever did everything yourself. You’ll get more time to focus on the numbers and marketing and by answering the questions about revenue and profit targets I mentioned earlier, you’ll see a clearer path to success that you’ll begin to move towards much faster.

All great companies started with just one or two people and an idea. The best businesses are led by entrepreneurs who focus primarily on three things:

  • Having the right strategy
  • Having enough money in the bank
  • Hiring the right people

Spend most of your time on the three things above and you’re off to a great start.









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  • Anonymous

    Very well written and extremely helpful. On the same track with Jonathan, my situation has really been jack of all and master of none. I’m the Founder, CEO and everything else, but once I hit my required revenue, I will start hiring Entry-Level Employees. Lucky for me, this realization has struck only 2 years after opening my company and I’m very close to hitting the revenue goal.

    Thanks for sharing this experience, I can relate in many ways.

  • http://www.toddscostumes.com Todd

    Good article. I sympathize with Jonathan. I’ve been wearing the same hats for 16 years now, as I’ve gone through an endless stream of employees. When you have a staff of 3, losing, replacing, and training a new one is a real chore. Sometimes I wonder if the hassle is worth it.

    Any tips on how to make managing day-to-day tasks easy enough to manage that a $10/hr employee can handle it?

    Todd

  • arcade47

    Very well written article

  • http://www.flyclothing.com Jonathan

    Mitch,

    This article definitely hits home for us. We have had various people/students work for us over the years but its usually only for a couple of years and then they graduate. I’ve worn the same multiple hats as you for 11 years and realize I am a jack of all trades and master of none. I keep telling myself I need to hire someone so I can focus on strategy but then we get busy again and I have no time. Whenever I say “I should commit to hiring someone,” I find I don’t end up doing it because it also takes time to solicit, interview and hire–none of which I have the time for. I guess I’ll need to make the time if I really want to take the company to the next level!

    Jonathan