As a professional mentor for owners of creative service practices, one of the most common questions I get has to do with hiring. Freelancers get busy and they wonder if they should hire another designer to help out. Small firms with just a couple designers on staff start to grow and they wonder who they should hire next. Should you keep hiring? Who should you hire first? Will you have enough ongoing business to maintain all these hires? What if you hire the wrong person? This is tricky business—mistakes can be costly.
Hiring Help: First Things First
The first thing you should consider before you hire, is to ask yourself if you’re ready to make the transition from being a “doer,” to becoming a leader and manager of your business. Owning and operating a business, whether it’s a design firm or something else, is a very different path from simply being a self-employed designer. If you take this path you should know that success will mean exiting out of Photoshop and opening up Quickbooks, closing Illustrator and logging on to LinkedIn, quitting InDesign and signing into Salesforce (though personally I’ve been using HubSpot’s free CRM). Rather than creating art and design you’ll be creating a business, which has it’s own rewards and creative challenges, but of a very different kind than the work that got you started.
The Blending of Roles in a Creative Practice
The second thing to keep in mind, before hiring help, is that every creative service practice, from the solo freelancer to the firm with dozens of employees, consists of distinct functions or roles. The creative work itself is just one role. There’s also the client relations role, the internal operations function, the marketing and sales roles, as well as the leadership and professional development roles. So before posting your job opening, give careful thought to the roles you need to fill. (And for freelancers who are not going to hire, it’s still a good idea for you to think through these roles and set parameters for how much time you will need dedicate to each function.)
The Birth and Maturing of the Design Firm
The typical birth of a design firm starts with your freelance practice. Then, as things start to take off, you may hire an employee or two to help out. (Or you might form a partnership—but I’d be very careful about that.) In these early stages it’s possible to continue doing some of the design work (though you’ll find yourself doing more and more of it at night or on weekends) while also wearing all the other business hats. But this gets tiring quickly which usually leads to the decision to hire more help.
But when you do, a very important shift will take place. Your role as owner will shift from being part of production to becoming almost entirely “overhead.” With four or five employees, much more attention needs to be given to marketing and sales in order to keep the revenue coming in. And while you might want to hire someone else for the sales and marketing role, that rarely works out. As the owner you will usually need to fill this vital and foundational role.
Of course you’ll also have to handle office management and HR issues—and so your role will become almost entirely overhead. And with you as overhead, the firm will need to be able to produce enough revenue to support your role—leading to the need to hire even more employees so that there will be a large enough base to build upon.
In addition to your role becoming overhead, for every two to three employees you hire, you’ll also need to hire a client support person. While this person’s role is not overhead (since their time is billable), nevertheless their function will necessarily increase project budgets. After all having two people, a designer and a client service person, attending meetings with clients doubles the burn rate on the project’s budgeted hours. So as the owner you need to work hard at finding clients who will be willing to pay higher fees to support your firm’s more complicated structure and necessary overhead. Which, by the way, is why it’s such a bad idea to position your firm, even when it’s small, as “cheaper due to lower overhead.” If you gain your clients based on that positioning it will be almost impossible to wean them off when you do start to grow and need to significantly increase your fees.
Proportional, Not Incremental Growth
So when considering the leap from freelance to firm, or small creative group to larger firm you’ll find that hiring is rarely done incrementally. You’ll tend to jump from the one to three employee stage, right into having six or seven. Then from seven you’ll experience a leap to ten or twelve. Hires tend to come in batches. That’s because the roles that allow your firm to run optimally will always have a certain proportion to each other: one account manager for every two or three designers, one sales and marketing for every six to eight employees, one office manager or internal admin for each team of six to eight. These are not hard and fast numbers. Your proportions will reflect your work processes and the kinds of projects you do. But whatever your balance, you’ll need to scale proportionately. So you can’t just add employees piecemeal.
You have to grow in stages.
Start By Growing Profit Before Growing Employees
Which brings me to my overall recommendation for any freelancer or small creative service firm that is contemplating taking things to the next level and hiring help. Raise your rates (or better, increase your project fees) before you hire. If your firm is currently not very profitable, I can just about guarantee that you’ll be even less profitable when you add employees and overhead. So raise your rates first! Make room in your revenue before you make room in your office space. Besides, by increasing your fees first, you’ll be able store up some cash reserves to cover some of the short term profitability pressures you’ll face in hiring. After all, each new employee will need to be brought up to speed. You’ll have to introduce them to clients, teach them your processes, and train them in your practices.
Since growing from one stage to another always involves some risk, it’s all the more important for you to carefully examine your goals and motives before hiring. Adding that third or fourth resource might take a little pressure off at first, but it may set you on a trajectory that can’t be easily reversed.
Before hiring ask yourself, are you committed to doing what it takes to lead your company into success? Are you ready to lay aside your palate for proposal writing? To forgo designing logos for business development? In my experience designers have a difficult time with this kind of transition. I think it may have something to do with their inner identity as “an artist.” But it also stems from the fact that very few designers receive adequate business management training in art school.
But if you are ready to make the transition, if you’re ready to learn some new skills, and if you’re ready to take on a different role, you can become the creator of something new. It won’t have the same feel as creating a brand identity, but you will be creating something great, something that will be a blessing to you, to the clients you serve, and to all the employees whose livelihoods will be drawn from what you built. It’s not an easy transition, but it is a worthy one.
Are you ready to take the struggle out of finding new clients?