The Team You Need At Every Stage Of Business ($0–$50M)

Pas 2 million, the right hire can get you to 20 million, while the wrong hire can keep you stuck and flailing for years. Now unfortunately, most founders get this dead wrong because no one told them that hiring at scale is not actually a who problem, it's a when problem. Fortunately for you, by the end of this video, you're gonna know exactly who you need to hire next based on your level of scale. Now just for context, I've hired literally hundreds of people, some were the right hire at the right time, plenty were not. And that's why I created the Hiring Ladder. The Hiring Ladder tells you exactly who to hire and more importantly, who not to hire at each and every level of scale. Because the fact is, the right hire at $500K in revenue is the wrong hire at $5 million. And the most expensive hiring mistake that you can make at $10 million, it's not even a bad hire at all, it's a bad promotion. Quick note before we start climbing the ladder and before you start potentially scrolling forward in this video. If you're looking at rung 1 and you're thinking, "I'm past this, I'm already at 2 million or 5 million," stay with me anyway and watch this video from start to finish because the ladder isn't just about climbing up, it's about whether you're stepping on each and every rung on the way up. Watch every rung, especially the ones below where you are right now, because that's likely where you're gonna need to find the fix that you need the most. Okay, let's climb. Rung number 1 is this 0 to 500 scale range, and at this rung, your very first critical hire is, drum roll please, yourself. I know, sounds ridiculous, you already work here after all, but stay with me because the reality is most founders never actually hire themselves. When you operate without paying yourself a real salary, you're allowing the business to run at lower margins than it should for far too long, and this allows model problems, this allows pricing problems, this allows business structure problems to hide and fester. Give yourself a real title, write yourself a real job description, and pay yourself a real salary, and don't make another hire until you can afford to start paying you. Now, who do you not hire? Because who you not hire is really important at this stage, and there's 2 specific traps that I want you to avoid. Now, Trap number 1 is hiring helpers, okay? We do not want to go and hire a bunch of helpers at this stage. And I know it's tempting, right? You're tired, you're thinking, "Let me just get a couple of virtual assistants in here. Let me get some offshore contractors. Let me just throw some bodies." You didn't free yourself up. You just gave yourself a brand new job called the manager of helpers. That job freaking sucks. Now, trap number 2, this is when you just go out there and you hire an EA, you hire an executive assistant. Now, don't get me wrong, executive assistants can be great, but they are not great at this stage. They've got big titles, they've got big functions, they deliver vague outcomes. You're gonna wind up burning your budget and your patience in the process because of all of this vagueness. Now, I will give you one exception. As you're kinda closing in on $500K, If you wanna make 1 or 2 customer-facing hires, you know, that's okay. If you wanna hire a customer support person, you know, that's okay. If you wanna hire a fulfillment person, right, somebody who can handle fulfillment, delivery, something very, very specific, that's okay too. The key is we wanna make sure that they're handling a singular, specific role or task. All right, rung 2, we've got between $500K and $2 million, and at this point, the goal here is to hire your weakness. That's right, we want to hire for your weakness. Now I get it, hire for your weakness, you've heard it a billion times, it sounds cliché, but there's a specific weakness that you're gonna need to hire for at this stage. And like I said, this is gonna be your first truly critical hire, and if you get it right, it's gonna have a massive impact, probably the biggest impact that you've seen in your business so far. This is going to be your first true peer hire. Hire an executive functional leader, someone who is— and this is important— better than you at a critical area of the business that you're good at, you're just not necessarily amazing at. And here's how you figure out who that person is. So every business has two and only two constraints at any given time. They're either going to have a demand constraint, meaning you need more leads, or you're you're gonna have a supply constraint, meaning you can't fulfill and serve the customers and clients that you already have. Seriously, you're pretty good at both of these things. You wouldn't have built this business if you weren't pretty good at both of them, but there's almost always one function where you truly shine. There's almost always one where you're truly the best person on the team by far at that function, and you probably know which one it is. When things get difficult or challenging, do you default to selling like crazy or do you default to building something new from scratch for the people you already have to buy? That's how you determine which constraint you're the best at solving. Whichever one you're the best at, your goal for rung number 2 is to hire your peer on the other side. So, if you default to sales and marketing, let's just go sell a bunch of stuff, hire a phenomenal head of Fulfillment, head of client services, head of product. If you default to product creation or client delivery, hire a phenomenal head of sales or head of marketing. This person won't be cheap, right? We're talking $150,000 to $250,000, sometimes more. Heck, you might even have to pay them more than you're currently paying yourself at first, but I want to be crystal clear. This is not actually an expensive hire. This is an investment in your company's growth that not to mention your own sanity, and an amazing functional leader, they should pay for themselves inside 90 days because they're freeing up the single biggest constraint while they're simultaneously— and this is important— freeing you up to do your best work. There's one more hire that you need to make at this stage, and then I'll get into who not to hire. So at this stage, and definitely around the million-dollar mark, you should also bring in a part-time, um, or outsourced bookkeeper. Okay, this is when it's time to have somebody, you know, looking at the books. You don't need a CFO or even a fractional CFO, you just need someone keeping basic books in order. The other hire that you can make at this point, if you're ready and if you want it, is an EA. You can go ahead and hire an executive assistant, take some of the menial tasks off your plate at this point if you want to. Now, who do you not hire at rung number 2? There are 3 traps. Trap number 1 is we We don't want to hire generalists, okay? We don't want to fall into the generalist trap. So, this is the big one. You hire somebody with some fancy but fuzzy title, an operator, a COO, an operations manager. I'm telling you, if you find yourself hiring for an operator, sub-$2 million in revenue, heck, probably sub-$10 million in revenue, you probably haven't figured out the role that you actually need. Yet. What we want here are specialists, demand or supply side specialists. Pick a side, but don't pick a generalist just because you're not sure and hope that they can figure out what needs to be done. They won't, and they'll cost a lot of money in the process. Second trap, the second hire you don't want to make is a stretch hire. This is the $200,000 role that you try to fill for $90,000 by promoting somebody who hasn't ever really quite done that role yet. But you feel like maybe they could. Maybe they can, they probably can't. They're more likely going to burn out, they're going to churn, and you're going to be back to square one minus the salary and the time that you just spent. The third big trap is just again more helpers, okay? Don't just hire a bunch of helpers at this point. I get it, making a $200,000 hire feels like a lot so you talk yourself into, you know, maybe you just hire some contractors. This is the same helper trap that we talked about back in rung number 1. Just with a bigger price tag and a deeper downside. So, don't do that. By the way, now that you know who to hire, you're probably wondering, "Hey Ryan, how do I evaluate someone for a role if I've never done that role myself?" My team and I actually created a hiring scorecard to address just this challenge. It's totally free. The link to grab it is in the description, so go check that out. Now, rung 3 is the kind of $2 to $5 million range, and this is what we refer to as the swamp of scale or No man's land, and this is the rung where most businesses stall out, and they'll stall out sometimes for years because this is when you have all the complexity of an 8-figure business but with the team and the revenue of a 7-figure business to support it. That's why we call it no man's land. You're too big to be small, you're too small to be big, and what rung 3, you actually need to do the opposite of what you did in rung 2. You need to hire for your strength. So what we're doing here in rung 3 is you need to hire for the strength, for the thing that you're already great at, for that side that you naturally lean into. In other words, you bring in someone who's better than you at the thing that you're already great at, and that may sound impossible. You think, "Ah, but I'm the best, it's my business." I want to be clear, you're still going to be better at doing everything than anyone else is, but if they're focusing in on just this one thing, then they absolutely can be more effective in that role because they're not trying to do that one thing and run an entire company at the same time. Because the only way out of no man's land, the only way you get out of this swamp of scale between $2 million, $5 million, $8 million in revenue is systems. And the only way that you're gonna build those systems is if you hand off your strength to someone who can run that thing and ideally improve upon it, help you systemize it so that you can finally pull the operating system out of your head and get it into the business. This is when, by the way, you finally elevate from a doer in your own business to functioning like a true CEO. You'll see to make one more big hire at this rung. So back in rung 2, talked about bringing in an outside part-time bookkeeper. Um, now it's time to bring on a full-time in-house bookkeeper who can actually ensure that the checks are deposited, the bills are paid, and that your accounts are in order. You still don't need a full-blown CFO, but you do need a full-time you know, money person who's watching the books at this point, because good news, you should have enough money sloshing around. Here's where most founders blow it. Instead of hiring for their strength, they reach back to the same play that doesn't work in rung 2, which is the generalist trap, and what they wind up doing is they wind up hiring some vague operator, or worse, they try to hire a COO or an integrator. Stop hiring COOs and start being the CEO of your business, but by hiring for the strength that you're doing right now to replace you in that role. Now, what's the other big rung 3 hiring trap that you want to avoid? In this case, it's multiple bodies. It's duplicate roles. You probably thought this. You said, "Ah, I wish we had 2 of these people," and so you try to hire for 2 of that same role, and it feels like at the time that you're doubling capacity, but instead what you're doing is you're increasing capacity a bit while simultaneously doubling your management load. So don't multiply the people below you, hire someone to replace you so that you can ascend into your rightful role, which is the CEO role. Now, if you get this rung right, you're gonna finally stop being the operating system and the number one bottleneck in your business will be de-bottlenecked. So rung number 4 is this $5 million to $20 million range, and at this point what we are doing is we're going to hire your leaders. That's right, at this point we're hiring for all of your future leaders. Starting around $5 million and definitely when you hit $10 million, the focus needs to shift to upgrading and professionalizing your leadership team. The first team you need to uplevel is going to wind up being your finance team, because beyond $5 million, the business really needs to start being run on numbers, not just gut. And so at this point, you probably still don't need a CFO, but at this point it really is time to hire a Controller. The controller, it's your first true finance role that extends beyond basic bookkeeping and accounting. They're gonna own your books, they're gonna make sure that your accounts receivable and your accounts payable and all the management reporting is dialed in, and they're probably gonna have a bookkeeper or two reporting them. So the bookkeepers and folks that you hired back in the previous rungs, we're not firing those folks, we're just expanding and professionalizing the finance team. Um, you might also, by the way, want to hire a fractional CFO. It's not necessary, but maybe you want that extra layer of support. And what you're definitely gonna need at this point is a real CPA, an actual tax professional. If you're a $10 million business now plus, if you're an 8-figure business, your accounting really needs to act like it. Taxes are gonna start to matter, and so get you some good competent tax advice. Uh, rung 4 though, it's not just finance. This is the rung where you need to professionalize everything. I mean, so at this point we're hiring pros Marketing, sales, product, fulfillment, finance. You need to top these teams with real experienced leaders who've built and led teams at the mid-eight-figure and nine-figure level. You need people who've been there, who've done that. This is not your director of marketing from day one. These are real experienced functional leaders, and I'm telling you, they're probably not in the building right now. At this stage, to not promote. In particular, don't promote loyalists. Don't promote the quote-unquote loyal employee who's been with you all along. So, you got people, they've been with you since these earlier rungs, since you're doing a million and they're great, they're loyal, they're hardworking, they helped you get there but somewhere around 7, 8, 10 million in revenue, they're gonna hit their ceiling. Now, this is the moment where you're gonna have to make a choice. Will you reward loyalty or will you reward competence? Most founders pick loyalty. They feel like they owe this person and they don't want to upset this person, they don't upset anybody else in the team, and that single decision is what caps a $5 million business at $5 million. Now to be clear, you don't have to fire the people who brought you here, that's not what I'm saying, but you might need to bring someone in over them. And so if they can accept that, they can hang around. Unfortunately, most can't, and so they're probably gonna just quit on their own. So the decision to promote your in-house bookkeeper, again, that one that you hired, you know, back in rung 3, do not promote them to controller and definitely don't make them your CFO. The controller and the CFO roles require fundamentally different skills than bookkeeping. Second, don't promote your executive assistant or project manager to COO. All right, now we get to it. Rung number 5, we're talking $20 million, $50 million-ish. This is when, at this rung, it is time to hire for your replacement. That's right. Now the reality is, is this is the rung that most founders never reach, but if you've climbed the first 4 rungs cleanly, this is actually where the real freedom lives, because at rung 5, you get to choose between 2 paths. You get to choose, do I want to hire, you know, maybe I wanna hire a COO, or maybe I wanna hire a full-blown CEO. CEO. So path 1 is you fully exit the org chart by hiring an outside chief executive officer to come in and run the company. You're out completely. Now, I would not recommend this unless you've got another project that you're more excited about, but if you're ready to sell the business or just kick back and collect some distributions, you bring in that CEO, they're in, you're out. Now, path number 2, this is when you hire an actual COO or a president to run the day-to-day while you stay in the visionary strategic CEO seat. This is the path, in my opinion, that most founders should take. It's the path that I like to take. You get to stay in the org chart, but you just shift your focus to more, you know, future moonshot ideas while somebody else manages and optimizes the business that you already have. Either way, this is the hire that makes you optional, and for me, this is when I like to do that. And the reason I like to do that, if we go back to the Rung 4 conversation, the loyalty versus competence. In full transparency, it happens again here too, just with bigger stakes and with longer tenured people, and I don't like it. I don't enjoy it. Like, I can give the advice and say that, oh, you need to hire for competence and not loyalty, but I can also admit at the same time that it sucks, um, and it's hard, and I don't enjoy doing it. Also, if I think I'm going to sell this business in the next 12 to 24 to 36 months, I definitely want to replace myself as the primary operator, whether that's with a CEO or a COO, so that the new buyers don't expect me to go along with the sale, because I do not want to hang around when somebody else has bought the company. Now, who do you not hire here? There are two traps. Trap number one is we don't want to hire logos. That ex-Fortune 500 division head with the fancy LinkedIn profile who ran a $300 million division at a $20 billion company. Ooh, looks really impressive, but their experience rarely translates to small and medium-sized businesses like ours. Hire someone who has actually taken a company from $50 million to $200, $300 million and beyond. Find a CEO or a COO with operating company experience, not corporate division leader experience. Hire somebody who's lived your scale, who knows your math, and who knows how to take things to the next level. Now, the second trap This is when you're basically hiring from your network, when you're essentially hiring non-vetted people because somebody told you they're awesome and because maybe you've admired them from afar, or heck, maybe you're just hiring somebody from your Rolodex as a favor. At this point, we need to run a real recruiting process, and so a hire that we definitely need to make, even if it's just from a, you know, hiring somebody from a contractor perspective, now's the time when we got to bring in a recruiter. This is quite simply the most important hire of your career. Don't go cheap, don't shortcut it. The right person can take a business from $50 million to $200 million. That's a lot of extra millions, like that money will spend, but the wrong hire can easily grind it back to $30 million and trigger a leadership exodus that can take you years to repair. Again, ask me how I know. And look, hiring is one of the most important skills that that you're gonna need to master as a business owner. The first step though to doing that is to understand the sequence of hiring at every scale of business, because if you get it right, it's amazing, and if you get it wrong, it is painful. Now, if you saw yourself anywhere in this ladder, um, drop a comment with the rung that you're on and who you're hiring next. By the way, if you got value from this, be sure to subscribe. I put videos like this out every week, and I don't want you to miss the next one. In fact, I already did a video on how to hire for a role that you know nothing about. So if you're looking at this just saying like, okay, I know who to hire, but I have no idea how to hire that role. That comes up a lot, so I did a video on that one too. So if you liked this video, I know you're gonna like that one. I'll drop a link to it somewhere around here. Hopefully you can just push one of the buttons and check that one out next. If you do, amazing, I'll see you there.