How should I bring on my first employee? Should I pay a salary, use increments or profit‑share bonuses? How many hours do people work in your business? When should you hire the first hire and what should you expect?
After hiring around 40-50 people for my agency, I've realized I prefer to hire last. The common advice to delegate everything comes from a time when technology couldn't handle much of the work, but today technology gives us leverage, so you can realistically wait until you're making around $50k/month before your first hire instead of $15-20k. Hiring early is often just a band-aid for deeper problems—if you're under $25k/month the issue is usually your systems, not a lack of manpower. Focus on building systems that reduce the work needed to fulfill: automate repetitive tasks like onboarding emails, scheduling calls, and problem-solving via email; design productized offers that take half the effort to deliver (e.g., a form that auto-generates a campaign, scrapes leads, and follows up); create scalable sales flows (a discovery/closing call batched together, a proposal, and automated follow-ups that stop when a deal isn't worth the effort). Make client management discrete—set a daily 8 a.m. five-minute template update instead of letting clients interrupt you on WhatsApp all day. Hiring early means giving up a large share of profit (e.g., a $5k salary is half of your profit at 50% margins) plus management costs and risk; it's better to wait until revenue is higher so the hire is a smaller fraction of margin. I pay a flat salary plus a clear, trackable bonus—staff log it themselves and add it to their invoice—avoiding profit-share or rev-share because they misalign incentives and add overhead. Finally, I only care about deliverables: if someone is intelligent and ambitious they can build their own systems to finish work in fewer hours, and as long as the output is good I don't track hours.
The very first step is to quantify how much time you spend delivering the deliverables for your $10,000/month client. Recognize that with a single client you’re essentially a contractor, not running a true agency. Break down your deliverables line by line. Then determine how much revenue the business generates from your time and aim to receive 15‑25 % of that revenue as your compensation. For example, if the business makes $100,000/month from your work, you should be paid $15,000‑$25,000/month. This reflects you as an operator of the stack. Make this clear by tracking your time (use a clock app or similar). Once you have that baseline, you can focus on productizing and raising prices without hurting results. Recognize that your results come from the sheer amount of work you’re doing, not from a superior business model; you’re essentially squeezing a wet towel. Hard work can outweigh strategy, so you need to follow through on your awareness. To raise prices without losing results, either demand more money for the value you provide or increase the value you deliver for the same price. Avoid jumping to solutions like a content inbound playbook before understanding constraints. Instead, take a constraints‑based approach: inventory all the time you spend on each step, all deliverables you own, and the revenue you generate for the client. Identify the tightest bottleneck and solve it. Do not try to fix delivery bottlenecks by hiring; hiring is merely a band‑aid that ignores the underlying business‑model issue. Instead, restructure how you deliver services so you can handle far more than $10,000/month without burning out—there are examples of people making $20,000‑$30,000/month while working far less than eight hours a day. This is fundamentally a business‑model problem; you must solve the model itself.
I start with a kickoff call where I deliver quick wins to minimize buyer's remorse, and I always take payment upfront before any work begins - never considering a client 'onboard' until the money is in my account. After receiving payment, I create a detailed proposal that serves as both a sales document and a roadmap. Roughly 60% of the proposal outlines the client's problems, demonstrating my understanding from any prior small project; about 20% covers the proposed solution; the remaining 20% discusses logistics, principally compensation. I typically pitch a large monthly fee - recently moving from $6,900 to around $12,000-$12,300 - and often add a revenue-share component to align incentives, inspired by the idea that sharing upside makes both parties more comfortable and can lead to more money. I discuss performance-based versus flat pricing, noting that beginners should lean performance-based, intermediates may go flat, and experts often return to performance-based because they have confidence in delivering results. Once the client agrees and pays, I invite them to a kickoff call to set communication expectations: I'm highly reachable via Slack (within 15 minutes) and hold daily office hours from 12 p.m. to 2 p.m. PT, plus a weekly strategy session. I ask clients to commit to the same recurring time each week for at least 50 out of 52 weeks, emphasizing consistency so they take the calls seriously and see ongoing value. During each meeting I review wins from the past week, outline what I'll do next, and address any questions or fires, ensuring I always show up with something tangible to justify the retainer. I then follow the roadmap, checking off the 45-plus tasks in order, and optionally sync with the client's project-management system (though I've moved away from using my own ClickUp board as the single source of truth). I also note that other agencies like DesignJoy use shared boards, but I prefer bringing a quick note of wins and next steps to each meeting.
Cool man, I know you already have a full-time job, which is fantastic. You're probably working 6 to 8 hours on that job and then spending time on lead generation, client calls, and fulfillment. You're doing a lot, and it's natural to wonder if it's time to bring on help. Here's what I'd do: first, set a near‑term realistic income goal—for example, $25,000 a month. Add up your salary, income from custom projects, and any other income. See how far you are from that goal. Then calculate your current internal hourly rate (maybe around $100/hour). If you need an extra $10,000 to reach $25k, that's about 100 additional hours. Ask yourself if you have 100 hours in your schedule. If not, you don't necessarily need to hire; you could raise your prices or pursue higher‑paying clients. Doubling your rates would double your income for the same time, getting you a large share of the way there. You could also increase lead volume—more leads give you more opportunities to pick the best‑performing projects instead of settling for low‑rate work out of scarcity. My decision‑making mindset is based on expected value: I evaluate the expected value of taking on a client or making a decision and choose the option with the highest expected value at that moment. Regarding hiring, my experience shows it's not easy to post a job, review candidates, interview, and hire quickly; you add a daily management time sync. The equation for effective hiring is whether the daily management time plus the cost of paying someone is less than the value they create by doing the work. Early in a hire, you're often not profitable until they're onboarded, trained, and up to speed. So, unless you have a much higher goal—say $50k, $100k, or $200k a month—you probably don't need to hire right now. As for scaling an agency model, I do think it gets harder to scale beyond a certain point. It was harder for me at $72k/month than at $25k/month. After a certain point you're no longer just an automation agency; you become a niche‑specific service or system‑providing agency. For example, one community member scaled to $80k/month by pivoting from automation services to selling cold‑email systems—a lead‑generation focus. If you start as an automation agency but find a super‑high‑ROI CRM project, you'll quickly shift toward being a recruitment‑agency‑style CRM provider. If you stick with the pure AI‑automation‑agency idea, you'll likely plateau around a $1M annual run‑rate, because that's when you need to hire managers to manage people, which is tricky.
Are we talking no clients in general, in any of my businesses, or specifically automation? You might be talking about automation. The way I did automation was I just started out on Upwork — applied to like 10 to 20 Upwork jobs per day along with my business partner at the time, and the vast majority of them said no to us. We used a custom Loom-video-based approach: I'd record a Loom of me talking through the problem and send out a ton of those. I got really good at explaining automation problems consistently, and we scaled that automation agency pretty quickly to $15-20K a month. We languished around $20-40K a month for a while because my partner wanted to operate it as a software consultancy taking on custom projects with a big hired team, but that didn't really work — the engineers we hired could drag-and-drop in tools like Make.com but didn't understand the business side, so the automations they built were brittle. That's when I learned how difficult hiring is for something as complicated as a software/automation project. My partner and I eventually split up amicably — he wanted to focus on the consultancy side and building resellable equity, I didn't. I kept the business, focused on high-leverage applications of systems I'd already built, scaled up Upwork applications and cold email (reinvesting most of my income into cold email), and simplified the offer down to mostly cold email systems and one-click CRM templates. Around $35-45K/month I couldn't keep scaling that way, so I started pitching a fractional-COO model: I took a few smaller clients paying $3-4K/month and gave them massive 20-30 page proposals saying, 'I want $10K/month plus 7% of your business, and here's how I'll justify it by delivering $100K/month in value.' That worked for a couple of clients, my revenue shot up, and combined with old clients coming back that same month I hit $72K in revenue (not all of it was recurring).