If you’re a doctor who owns your practice, you’ve probably asked yourself, “Can I afford to hire an employee?”
Maybe you’ve considered it after a long day — exhausted because you handle every single role and responsibility in the business. Or perhaps you’ve thought about it while you’re celebrating your practice’s growth. Business is doing well. Does that mean it’s time to expand your team?
Whatever brings it up, you can’t avoid asking this question for long.
As your business grows you quickly hit a ceiling. There’s only so much you can do on your own. And if you don’t want your business to plateau, you know you’re going to need some extra help.
But can you really afford it? If you jump into a hiring decision without planning, your practice could really suffer.
That’s why you need to read this article first.
Here are the things you need to do to ensure you can afford an employee.
Come Up With a Job Description
“Can I afford to hire an employee,” is the wrong question to ask.
That’s because you’re not just hiring a general employee — you need to hire for a specific role.
Hiring for some positions could be a major mistake. But hiring for others could be more than cost-justified.
To know which is which, you need a detailed job description.
What role are you hiring for? Are there tasks this employee would be taking off of your plate? How would they help your business grow?
Be specific about duties and qualifications. Then carry that information into the next step.
Know Your Numbers
Now that you know exactly what you need, you can look at the numbers.
Weigh the benefits and consider the cost.
Weigh the Benefits
If the employee fulfills their role, what value does that add to your business?
Does their work free you up for an extra 20 hours a month? Maybe they’re able to help you schedule an additional 3 appointments a week.
As the doctor, you are the main revenue creator. So an administrative role that frees you up gives you more time to earn money for your practice. That’s why an admin assistant is the first employee most doctors can afford to hire.
But some doctors are looking to add another role to their team. If you’re looking for a marketer or even another doc, know how much revenue you can expect them to add to your business.
Consider the Cost
How do you plan to compensate your new employee?
A lot of consideration needs to go into these answers.
To hire good talent, you’ll want to offer competitive pay. But make sure you weigh your profit and expenses so you don’t overcommit.
It may be well worth it to have a professional settle on the right numbers.
Do the Benefits Justify the Cost?
Compare the value your new hire would bring with the cost of employing them.
If an administrative assistant could increase your revenue by $70k a year, it’d be well worth a $40k compensation package. But if the same role can only add an extra $20k to your business, you can’t afford to pay them that salary.
This is why people often determine a compensation package based on the value the role provides.
Consider Options Other than Full-Time
Most business owners fall into the trap of thinking they need to hire full-time employees.
But other options might be the wiser way to go.
These options are less expensive and demand less of a commitment. That’s why they can be a great place to start.
Hiring contract or part-time gives you time to grow as a leader and lets the employee demonstrate the value of their position. If things are working out well, your business can make more money and bump the new hire up to full-time. It is much harder to tell a full-time employee that you are cutting their hours.
Start ‘Paying’ Your Employee Before Your Hire Them
This Profit First hack makes all the difference.
I tell clients to open a payroll account 8 to 12 weeks before they actually hire someone.
Yes, you read that correctly. Start “paying” your employee before you hire them.
Make deposits into payroll every week, just as you would when the employee is on staff. You might still be figuring out some of the questions above or canvassing for the right team member, but put this money aside in a special account just the same.
This strategy has two huge benefits.
First, it proves that you can afford the employee. You’ll have figured out cashflow before anyone comes on board. Then when they do sign, you’ll be confident your business can handle it.
And second, you’ll have a few extra payrolls banked! It might take a couple of months until your bottom line sees the benefit of your new employee. With this strategy, you won’t have to panic waiting for them to justify the cost. If they do bring in new revenue right away, you’ll have a couple payrolls saved for a rainy day.
So… Can I Afford to Hire an Employee?
If you follow these steps, your answer will be a resounding yes!
You’ll be ready to find the right person for your practice, knowing they bring great value to your team.
Then with that collaboration, you’ll be all set to continue growing your business and increasing your profits.