Services businesses are easy to start but difficult to scale. Scaling starts with hiring and so many accounting solopreneurs struggle to expand beyond themselves. Hiring for the first time can be paralyzing, but a good hire can transform a business and move them to new heights.
At Scaling New Heights (Orlando, June 19-22), I'll be teaching a session about scaling your firm's hiring from one person to many. That first hire really can be the toughest.
In 2014, my wife, Brittany Brown, attended her first Scaling New Heights in pursuit of CPE to maintain her CPA. She had recently left one of the top regional firms and was a part-time CFO for a local construction company. One great session inspired her to start a firm. A few months later, we worked together to start what became LedgerGurus providing outsourced accounting now known as client accounting services to small businesses.
How many accounting professionals have similar starts from either frustration, inspiration, or a combination of both? It’s not easy getting an accounting business started, but it’s also not terribly difficult. With a combination of competence and courage, one can set off on the journey of a solopreneur.
The E-Myth Revisited
Brittany has always been a learner and early in the journey to start LedgerGurus, she read The E-Myth Revisited by Michael E. Gerber. One of her takeaways was that too many small business founders get stuck as technicians always working in, but never on the business. This concept informed her and helped her understand the importance of hiring early.
The Technician Trap
So many accountants start their firm and immediately fall into the technician trap. This happens because they are capable practitioners with a CPA, EA, CMA, or more. Their capabilities and confidence allow them to find customers and serve them well with their superb skills.
Over time, they build up a loyal customer base and find themselves overwhelmed and needing help. They may spend months, sometimes years, becoming a competent solopreneur, but feel lost in taking the next step and hiring someone else to help. They must hire or face the daunting journey of going it alone.
The Challenging First Hire
Believing in oneself to start a business is one thing but getting others to believe in your business can be even more challenging. This is especially difficult when someone is being hired as the first employee.
There are many who are great employees, often superb technicians and\or managers, but for many reasons do not desire to be business owners. Sometimes it is risk aversion, sometimes it is a need for stability, and sometimes it is a lifestyle preference. Whatever the reason, courting a great person to join the solopreneur’s journey is step 1.
Selling the Vision
There is a reason - a hope and optimism - a solopreneur gets started. The first step in hiring is to take that hope and optimism spreading it to others.
Rare is the case that a solopreneur can offer top-notch benefits to that first hire, so having a clear and compelling vision is key to attracting others to join the journey. Often founders make the mistake of selling potential hires on the work, but the first hire needs to understand what makes joining a small endeavor the right choice.
This doesn’t need to be a complex or fancy pitch. It needs to have a point and be sufficiently compelling for someone to join. It could be a more flexible work environment. It could be the opportunity to start on the ground floor of a compelling endeavor. It could be the ability to work in a smaller setting where everyone knows each other well. The big thing is the first hire must like the solopreneur so selling oneself is a priority.
LedgerGurus's First Hire
In the case of LedgerGurus, I was working a full-time job as a director of product at a technology company. I didn’t have the time to do more than help Brittany with technology and be a sounding board and advisor to her journey. She needed to hire and it wasn't (yet) going to be me.
At this time, Brittany reconnected with an old college classmate, pitching her friend on her vision. They chatted and had mutually reasonable expectations. Brittany’s friend didn’t have any desire to be a partner but was happy to be an employee having just left the world of Big 4 accounting. Brittany can be quite compelling and convinced this friend to join her on the journey and off they went.
Friends, Family, and Acquaintances
As was the case with LedgerGurus's first employee, a first hire is often a friend, family member, or acquaintance. Don’t expect a lot of success advertising on LinkedIn or Indeed when you are a company of one. Work your network where there is already built-in trust. This makes it easier for each party to take a risk on each other.
That said, be cautious at this phase, as you want to make sure there is a good fit. A bad hire can hurt at any phase, but a bad first hire can be catastrophic.
Finding a Fit
There are a few key attributes of a great first hire. Consider the following:
- Believes Your Vision – It is imperative that your first hire sees what you see and it inspires them to join you.
- Process Independent – A business of one doesn’t have much time to create formal processes. The first hire may learn from a great founder but often will need to absorb that founder’s processes and\or expand with their own.
- Technically Competent – The first hire must be good at their work or learn quickly. The founder probably won’t have the resources to spend lots of time training.
- Compatible Personality – When it is just two of you, getting along is imperative. Look for good chemistry during the search.
- Highly Trustworthy – Trustworthiness is a given with all employees, but critical with the first. A solopreneur won’t have the funds, time, and ability to create organizational controls. The first hire must be a control unto themselves.
Build your formula for who and what to look for in your first hire. Then, just like starting a business, jump in and find that first hire. It’s much like finding the first customer.
Take your time, talk to lots of people, and choose wisely. This is the first step in expanding your empire!
I hope to see you at Scaling New Heights for my session on Sunday, June 19th. You will learn from the successes and failures of hiring from a firm that has hired dozens of people.