We were so excited when we found him on LinkedIn. We finally had enough work to hire a junior analyst, someone to take pressure of the partners who were seriously underwater. He was sharp and hungry and the kind of candidate you feel lucky to catch. We interviewed him, made the offer and he accepted.
Then we rescinded it. Victoria had to call him back and share the terrible news.
This was early in our second firm. Clients were coming in faster than a skeleton crew could serve them, and people were starting to break. Hiring one junior person was the most reasonable decision in the room.
What we did not know was that we could not afford him. And not because he was too expensive. But because we were cash broke.
Beth had just come off a legally enforced garden leave. Victoria had been out selling, not watching the books. The partner who was supposed to be watching the books had never built a budget. Vendors were being paid well ahead of terms, which quietly drained cash. There was no reporting system to sound an alarm. Our expenses were outpacing revenue at twice the speed, and nobody in the building knew it.
So we called a bright-eyed twenty-something who had already given notice at his job, and took the offer back.
The financial hit was survivable. We slashed our own salaries, bought out the partners, and clawed our way back. The phone call was a different kind of damage. Neither of us has forgotten it. That week produced the one rule we have never broken since: never operate in the red. Ever.
That rule is Power Move #3 in our book: make the money moves that matter. Most people expect a hiring chapter to be about people. Your first hire is a cash flow decision wearing a people costume. Get the money right and the person has a real shot. Get it wrong and it does not matter how good the candidate was.
The 4 part framework to determine if it’s time to hire
Most founders hire to solve the problem sitting in front of them. Someone is drowning and needs help. The client we just signed could help pay for it. We would sign another client soon enough to help pay for more of his salary. So you write the job description that solves that week’s problem.
Twelve months later, that person is doing work you have outgrown, and you are back in the same hole, hiring again to patch the next leak.
The better question, and the one almost nobody asks before the offer letter goes out: what problem will I have in twelve months, and can this person solve it?
That one change turns a hire from a patch into an asset. It also raises the bar, because the person who can fix today is usually not the same person who can carry a piece of the business into next year.
1. Know your trigger, not your feeling
Feeling overwhelmed is not a hiring trigger. Every founder we know has felt overwhelmed continuously since the day she started. If overwhelm were the signal, you would hire someone every quarter.
The real trigger is this: you are turning down work you could win, because you do not have time to onboard the person who would deliver it. That is your flashing neon sign. When you start passing on revenue because you are too busy to hire, the cost of not hiring has finally passed the cost of hiring.
2. Write the job description yourself
We had a rule at our firm. Any time one of us was not fully convinced the role was critical or the timing was right, that person sat down and wrote the job description herself. Not a template. Not a recruiter. Us.
Putting it on paper forces honesty. Sometimes it built an airtight case for hiring. Just as often it exposed that the role was three unrelated jobs stapled together, and that we should wait.
Then apply the filter. Every task in that description has to tie to one of three things: making money, saving money, or freeing up your time so you can do either. If a task does not qualify, cut it. If almost nothing survives, you have a workflow problem, not a headcount problem.
If you ultimately decide its time to hire, really focus on the person’s ability to do the work you need done – not necessarily the person you want to join you for the Friday night happy hour. Yes, some people can fill both roles, but these are the exceptions and not the rules. More often, founders reach for comfort, call it culture fit, and end up with a team that thinks exactly the way they do. That feels great for about a year. Then a problem shows up that nobody on the team is wired to see. Culture fit means someone who shares how you treat clients and each other. It does not mean someone who reminds you of yourself.
Standardize the process before you are desperate. Keep the same core questions for every candidate and the same interview process that works. It is what protects you from the emotional and expensive decision later, when you are exhausted and the candidate in front of you is merely available.
3. Do the math before the offer, not after
Know exactly how much revenue has to be generated to justify the hire. Then make sure you have a plan to get there before you send the letter. Note the word plan, not revenue. You will rarely have the revenue already sitting in the account. You do need a credible path, written down, with dates on it.
Two rules we learned the expensive way.
- Build your expense structure around recurring revenue, not project revenue. In a services firm, retainers and recurring engagements are steady. Project work is lumpy and hard to predict. If you hire against a big project that has not been signed, you are betting someone’s livelihood on a maybe. We built our cost base on the recurring line and stayed profitable whether or not the big project landed that month.
- Watch collections, not just sales. The offer we rescinded was not a revenue problem. We had the revenue. It was not arriving fast enough to cover growing costs. We eventually locked clients into thirty-day terms, pushed vendors to forty-five, and gave ourselves a rolling fifteen-day buffer. Then we chased every invoice that went past due, politely and relentlessly. Without cash flow there is no business, so you are a collector first and an owner second.
If you cannot fund a full-time hire yet, start smaller. Contractors, fractional support, part-time specialists. We ran on outsourced bookkeepers and fractional CFOs for years before we could justify anything else. The math still has to work. You bill more than you pay. That is the whole test.
The same framework works at home, and in our experience the two hires tend to happen in tandem. Ask where the daily pinch point is. For Beth it was hockey practice, manageable until it moved to 5:10 p.m. forty-five minutes away. Paying someone to drive Sam to practice that season was the best eighty dollars she spent that week. Groceries, meal prep, errands, the picture hanging you have been ignoring since March. Same test. Does the hour you buy back earn more than the hour costs?
4. Decide up front how you will know it is working
Set the measures before day one, because after day one you will be too close to judge.
- At thirty days: has anything come off your list permanently? Not temporarily, while you hover. Permanently.
- At ninety days: can this person make a decision inside their lane without checking with you first? If every call still routes through you, you did not hire someone. You bought a more expensive inbox.
- At six months: does the work they own still hold up when you are gone for two days?
- And the honest one: is your own to-do list shorter than it was the month before they started? If it is not, the problem is almost never the hire.
Expect panic attacks when you let your first employee do her job
Your first hire changes your job description more than it changes theirs.
The day someone else owns a piece of your work, a different set of responsibilities lands on you. Setting the standard. Making the call when two people disagree. Keeping one paranoid eye on the horizon for the competitor sliding into your clients’ inboxes. That work is yours and it does not transfer.
We landed on opposite ends of this and both of us paid for it. Beth delegated almost too well, handing something off and moving on to the next idea before the handoff was halfway finished. Victoria held on too tightly, which served us beautifully in the early days when invoices had to go out and financials had to be current, and then hit a wall the moment the pace picked up. She was missing dinner with her kids to catch up on work she should not have been doing.
If you are going to hand something off, hand it off. No shadow delegating. No one more check. Let them do it their way, even when their way is not yours.
The first hire will make you uncomfortable. The first senior hire will keep you up at night. That discomfort is not a signal to wait. It is the price of a business that runs without you, which is the only kind of business anyone will ever want to buy.
Just do the math first. Ask the kid we had to call.
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P.S. If someone you know is in a hard week right now, forward this to her. No pep talk attached. Just this.
