Scaling to 8 Figures: Part III

This is Part 3 of 4

If you have not read my previous posts, I highly recommend you do so before reading this one.

We already covered the basics and learned how to develop a process, but before we start delegating, we have to learn more about Hiring.

Let's dive in.

Where to begin

Before we start building our team, we need to make sure that we can see the big picture of our business to fully understand the situation.

Owner's mindset

The first step is to shift our mindset from Operator to Owner. Most of us were conditioned to be Doers and it takes a lot of effort to change that. Some sellers will never take that step and they essentially remain employees of their businesses.

The simplest way to transition is to change the way we look at our tasks. You probably have To-do lists, dozens of tasks, and projects you would like to pursue. The problem is how we think about it:

• "I have to do X..."

• "I should do Y..."

• "I want to do Z..."

This is how Operators think... and there is a better way to look at it.

The truth is that there is simply an outcome the business needs. That is it.

You may currently be the only person who can produce the outcome, but that is fine. The key here is to change the perspective. Once we do that, we can start asking questions like:

• Is this something that only I can do?

• How could I get out of doing this task?

• Who would be just as good at doing this as me?

• What skillset would they have?

• How would I equip them to do this job just as well as I could do it?

If you do that, you will soon realize that there are just a few things only you can do. I personally printed these questions as a reminder.

Now we can get to work.

Who to hire first

Before we decide what role we want to hire, we need to figure out which process we want to delegate. It may sound obvious, but a lot of us tend to hire someone because they "need help".

I also get a lot of questions about when to hire the first employee. I recommend looking for your first employee once you have a proof of concept = a profitable product, 6 figures. The great thing about online business is that you can hire people from all around the world and many of them want to work just a few hours per week. Nowadays, it is not a big commitment...

Let's figure out which process we should delegate first. There are a few techniques I use to make the right decision:

Maintaining vs Growing
I already covered the difference in my previous post. In general, Growing requires creativity and outside-the-box thinking and those traits are quite rare and hard/impossible to teach. This means that finding someone viable will be more complicated and expensive.

= We are looking for a process that Maintains the business

Effort & Value
Each process can be categorized into one of four sections: High/Low Effort + High/Low Value. We can simply define effort as the time required and value as the overall impact on our business. For example, we can say that Customer Service is high effort and low value because it requires a lot of time and it doesn't move our business forward - yet it still needs to be done.

= We are looking for a process that requires high effort and creates low value

However, the best way to identify the right process to delegate is by looking at the data = our time allocation.

Time Tracking
It takes just a few minutes to set up proper time tracking and the benefits are enormous. You simply need to understand where your time goes to make better decisions. Categorize your time entries based on your Amazon FBA Process Map = How many do I spend in Supply? Product Development? Etc.

It allows you to:

• Identify time sinks = What should I delegate?

• Optimize time allocation = What should I focus on more?

And once you build a team, it also allows you to manage it efficiently. Time is a valuable input and you are pretty much blind without rigorous time tracking.

I can go back 3 years and tell you exactly what I was working on - I can also see the trends of how my time allocation changed over time, how it changed with new team members, etc.

It is also one of the key metrics you should look at once you bring a new employee on board = Are they saving me time or not?

So, to choose the right process to delegate, we are looking for:

• a process that maintains the business

• a process that requires high effort and creates low value

• a process that requires a significant portion of our total time

These are not fixed rules, but it is a good place to begin.

Finding the first domino
Our job is to find the easiest way to remove our bottleneck. We will use this technique to avoid a common mistake.

Let's say that our plan to grow is to launch new products on regular basis. The thought process may look like this:

We currently do not develop enough products to meet our new goal ➝ I should hire someone to research and develop new products to remove this bottleneck.

This could work, but our job is to find the easiest way to remove the bottleneck, so we will follow the techniques mentioned before.

The thought process may then also look like this:

We currently do not develop enough products to meet our new goal ➝ (Why?) We do not spend enough time on it ➝ (Why?) I am in charge of product development and I do not have enough capacity ➝ (Why?) I spend 40% of my time in Supply, 30% in Marketing, etc.

• We can fix this by optimizing our time allocation. We may decide to hire a Supply Manager first so we can dedicate more time to product development

In this scenario, it will be easier and cheaper to hire a Supply Manager rather than some Product Development Expert. We obviously want to take into account our expertise and personal preferences, but in general, we want to look for the first domino that is the easiest to knock over and achieve a similar result with minimum resources.

We chose a process to delegate and we are ready to start the hiring process.

Hiring Process

Success & Failure
We will begin with the most important step. We will define in detail what success and failure look like. This is extremely useful because we will clarify what we want/do not want and answer key questions:

• What are we trying to achieve?

• What are we trying to avoid?

• How do they fit into our business?

Other than that, it will also help us to communicate our expectations to the new employee and use it to evaluate their performance in the future.

Here is an example we used to define success/failure for our Supply Manager

Success = Supply chain is running smoothly according to our process. You proactively move through the process, minimizing delays and identifying potential issues. All moving pieces are being properly tracked and monitored - spreadsheets updated, files saved and organized. You proactively communicate with all parties involved.

Failure = Manager has to step into the process on a regular basis to fix issues. Delays caused by miscommunication. Losing track of milestones, missing deadlines, and causing other delays. Spreadsheets not updated on time, causing errors in forecasting.

Competence Levels
It is also helpful to define the required competence level. I like to use these 3 levels of competence:

• Follower = Low-level, they simply follow the steps you define

• Specialist = Mid-level, they have a contextual understanding, they understand the process

• Expert = High-level, they have their own workflows and processes

Keep in mind that most people will claim that they are Experts, but they are not.

However, you do not need an Expert in most cases. I personally like to hire Specialists because they can hit the ground running at a reasonable cost. You may consider hiring Followers for Assistant roles, but keep in mind that your processes and instructions will have to be very clear to get the results.

Now we are ready to start looking for them.

Hiring Funnel
We want to find a person with high potential and relevant abilities. In hiring, we are essentially taking shots on goal - sometimes we miss, sometimes we score.

There is no process that would guarantee us a 100% success rate. Similar to Product Development, we can do everything well and still end up with a dud. However, we can design a process that will improve our chances.

The idea is to create a funnel that will allow us to attract a lot of people at the top and filter them out with minimum effort.

The funnel can look like this, from top to bottom:

Job Ad ➝ Questionnaire ➝ Test ➝ Interview
The deeper we go into the funnel, the more involved we will be.

Job Ad = Use your Marketing skills to write the ad, keep in mind that you want to attract only relevant candidates, not everyone

Questionnaire = Various questions to make sure they meet the requirements

Test = Sample task from the Process to see how they work

Interview = One on one call to see if their personality fits into your business

Once we draft the funnel, we will share the Job Ad on our favorite platform and then wait for a few days. We will automatically send everyone to fill in the questionnaire that will test their knowledge and gather their expectations. We will filter out 2/3 - 3/4 of the candidates and send a Test task to the remaining ones. Once again, we will filter them out based on their work and schedule an interview with the best of the best.

To give you a better idea, we had 93 candidates in our last hiring funnel and I had to do just 4 interviews to find the right person for the job. The whole process took less than 3 weeks.

Final Word

Going through the process for the first time and finding the right person for the job is a game-changer. It truly changed the way we look at the Amazon FBA Business.

You have doubts and I get it, I felt the exact same way... I am sure that everyone does.

It was personally hard for me to take the leap. I did not know where to begin and I was also afraid to let go of my control. However, when I look back I wish I would have done it sooner.

It is simply better to start sooner rather than later so start tracking your time right away and choose a process you want to delegate. Define the job requirements and what the success looks like to you. Prepare your Hiring Funnel and post your Job Ad.

I did my best to summarize the game plan that worked for us and I hope you found it useful.

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