What’s up, everybody? It’s Steve “The Hurricane”, and for today’s episode of “A Drink With The Hurricane”, we are going to talk about: When should I hire more staff to help me run my agency? So raise your glass and let’s toast to your success. Cheers!
This is “A Drink With The Hurricane”, the talk show discussing all things growing your home care business. This video is sponsored by Home Care Evolution, where we help home care agencies adapt to changing circumstances, transform their business, so that they can thrive for years to come.
This is a really important question that I get asked often when I’m speaking at conferences or conventions, and everything else in between, on webinars and so on. When do I hire more staff? And the reason why this is such an important question is because we know we can’t do it all alone. On the flip side, we also don’t want to have too much staff, because then that affects the profits of the business.
So what is that happy medium? Because I’ve had many business owners over the years who’ve grown their business by themselves: one, maybe a two person operation, and that person is working 90 hours a week. They have no work-life balance and they start making mistakes. And because they’re doing it by themselves, they’re not able to grow at the rate that they would if they brought on help.
On the flip side, as I said before, I’ve seen agencies where they have way too many staff members, and then all of a sudden there are no profits. Nobody’s making any money, everybody is bored and they don’t know what to do. So how do I find the right balance? Here are a couple of tips on how to get that balance.
The first thing we got to do is actually determine if we need someone else through the amount of work every single person is doing. Now, this is something that I teach to my Home Care Elite Academy clients. It’s called creating a task tracker, and what you do when you create your task tracker is you basically sit down with your employee and you have them list out what are all of the things that they are responsible on a day-to-day basis.
And when you look at it, no one employee should have more than 20 responsibilities for your business. And scheduling, for example, is not one responsibility, because scheduling is much more labor-intensive, and they shouldn’t have to schedule and do 19 other things. But rather, take a look at managing that schedule and how many patients is that scheduler managing, and how much time does it take to manage that schedule? That’s where you come up with it for the scheduling.
Recruiting: same thing. Recruiting, that’s one huge, not task, but huge department in your business. So with recruiting, what is involved? Well, there’s placing ads, checking ads. How many different places am I placing those ads? So if I have four different places I’m placing ads, that’s four different responsibilities, because I have to place the ad for all four of them and update them every week, and then I have to check all four of them and update them every single week. That’s eight responsibilities right there. Then I have to do all the interviews and I have a goal of interviewing five people a week. So that’s five times five different tasks I have to do every single week. So as you see, it really starts to build up.
The reason why 20 is the magic number is because if you have any one single person in your company doing more than 20 responsibilities or 20 tasks, that means you are going to have somebody who is too valuable to your organization, and heaven forbid you lose that person. That is a big role to fill and it’s going to hurt your company.
So 20 responsibilities is a great number. This way you know they’re working; there’s enough work to be done with those 20 responsibilities; and, God forbid, the person quits or they walk off the job, it’s not going to be such a big hole to fill that your agency takes steps backwards and you lose revenue, you lose productivity, because you lost somebody who was too valuable to your organization.
So again, no person including you as the owner, should have more than 20 responsibilities that they’re responsible for every single week. Do that task tracker. Figure it out. If you figure out and you find that, say, you have three people and collectively from those three people, that’s 75 responsibilities, it’s time to bring someone else in, because you got 15 responsibilities that need to go to someone else. That’s a great way to make sure that you have proper balance in your organization.
The second and final tip I have… There are just two tips on it, because it’s really not that difficult to be able to know how many staff members I should have in my organization. For every $300,000 that my company generates every single year in total annual revenue, that is the minimum, it could be greater, but that is the minimum number per full-time staff member.
So if I have a business that’s doing $900,000 to $1,000,000 dollars in annual revenue over a course of 12 months, I should have at least three full-time employees. I myself, if I’m in the business and I’m running and I’m operating it, am one, and then I have two other full-time employees, that’s three full-timers for $900,000 to $1,200,000, which would be when I hire the fourth person to my organization. One full-time employee for every $300,000 in revenue: that’s a great rule of thumb!
And you know what? I just thought of a bonus one along these lines. A great way to think about it is once I get my business to at least 250 hours by myself as a one-person operation, that’s when I’m going to hire my first employee. Then once I get the business to approximately 500, 600 billable hours per week, because the math almost works out the same from a revenue standpoint that I said with the $300,000, that’s when I bring on the second person. And going forward, every 500 weekly billable hour increment is when I bring on the next person.
And who do I bring on? A good rule of thumb is, as my business grows, start to go back to that task tracker that I said at the very beginning and look at the tasks that people are doing, and you’ll start to see as time goes on, more tasks, more responsibilities are generated because of the volume of business.
Scheduling, in the beginning I might be able to have somebody who is scheduling and recruiting, but as my client census grows, the number of patients that this scheduler has to manage has also grown, and so with the tasks, she’s got too many people to manage. I have to take recruiting away from her, so obviously now I need a recruiter all of a sudden.
Doing all of the HR responsibilities and the billing and the accounts payables and all of the financial aspects starts to become too much for one person to do. So now I take all the HR responsibilities and put them onto the recruiter, and then I have a full-time financial person who does billing and payroll and accounts receivables and all of that.
Then I grow the business a little bit further and now all of a sudden I have so many patients I need to have somebody who’s a field manager, who’s overseeing all of my patients because I’m starting to have too many client issues for us to all handle internally. Then now I hire a care coordinator, or I promote somebody from within. Eventually, I get to a point where I can’t do all the marketing myself and I need a full-time marketer.
These responsibilities, as your revenue grows, as your hours grow, will start to show you: what are the holes in my business? I know the hours that we’re at. I know the revenue we’re generating. We need someone else. And the holes should start to identify who that person should be. And it will literally be over the course of 12 months, over the course of two years’ time, where you will grow your business by 1,000, 2,000 billable hours a week and more. If you’re doing the things that I teach my clients, you’ll be growing your business by these leaps and bounds and you’ll be growing your staff.
Now, if you want more content, if you want more information on how to grow your business, I highly recommend, if you haven’t already done so, you access my free quarterly magazine, Home Care Evolution Quarterly. You go to my website, homecareevolution.com/magazine, and you can subscribe and receive this for free. Every quarter, 8 to 10 articles on all things scaling and growing your home care business so that you have the competitive advantage, and you can “Blow Away The Competition!”.