Mike of PainterGrowth says you need 45% gross margins minimum before hiring your first production manager, ideally 50-55%. If you're not there yet, fix your current operations instead of scaling.
Is there anything else that you should be thinking about before making that first hire for production manager?
You need to make sure gross margins are good enough to be able to handle a production manager. You should have a minimum 45%, hopefully 50 or 55% gross margin on all of your projects. If you don't have that level of gross margin, you really shouldn't be thinking about scaling. You should be worrying about fixing your current ship before you look at expanding the ship.
Making that first hire can be expensive, especially if you don't have the margins to support it. You typically have a recommended gross margin?
I like between 45 and 55%, minimum 45%. And then do the math. If you're producing $50,000 a month and you have a 45% gross margin, $22,500 net margin. You have your overhead, say you have $6,000 of overhead, so that brings it down to $16,500. Now you got to think about what are you paying your production manager. If I'm paying my production manager $6,500 a month, brings my net down to $10,000 a month net. That's pretty good, but you have to look at your numbers, what your net margin is. You have the ability to afford a production manager
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