Want to hire employees so you can scale your business but unsure if it’s the right time to do so?

Lucy Cohen has some tips to help you work out when to start hiring staff.

On top of that, the co-founder of Mazuma joins Entrepreneurial Accountant host Mike Psaras to talk about the challenges of scaling her business, being overwhelmed and dealing with stress, and why you need to keep the faith when running your practice.

Here’s what they cover:

• Growth is painful and growth is expensive
• Working out when the time is right to hire employees
• Creativity requires bandwidth
• Keep the faith, you’re on the right path

Growth is painful and growth is expensive

Mike Psaras

Hi, and welcome to the Entrepreneurial Accountant. Today we have podcast royalty, author and accountant, it’s none other than Lucy Cohen, co-founder of Mazuma. Hi, Lucy, welcome to the show.

Lucy Cohen

Hi, Mike, nice to see you.

Mike Psaras

What problems did you encounter when scaling Mazuma?

Lucy Cohen

“What problems did we not encounter when scaling Mazuma?” is probably the easier question to answer.

You name it, we messed it up.

Look, growth is painful and growth is expensive.

When you’re scaling, and you’re scaling quickly, if you make a mistake, and it takes you in that direction, that mistake gets amplified and amplified and amplified.

And it’s a lot to kind of pull that back.

So if I was doing it all again, I’d be saying that I’d want to get systems – kind of, you want to get your systems rock solid before you’re going to press – get strong foundations, you’ve got to have those strong foundations.

And don’t fall into the trap of thinking just because it’s going like this this month means it’s keep going like that.

It might go like that, it might go down, it might go up again.

You have to, kind of, be okay with that journey.

And for us, the biggest challenge is resourcing in terms of staff. So staffing that growth is very challenging, because everyone’s got a speed to competency time.

So what that speed to competency is might be an average of, I don’t know, say 12 weeks or six months or whatever it might be.

You almost have to hire somebody X amount of months before you need them to be working at full capacity, and that costs money.

You know, that costs money to do.

You’re going to have members of staff, carrying members of staff as you scale that aren’t as efficient. And you need to have the space within your model to handle that.

Also, all the other things that go with it, you know. You have to be okay – things work in percentages.

The first client you ever have that leaves really hurts. Like, when a client leaves you like, oh, it’s awful. And you take it really personally.

If you’ve got 10 clients, one client leaving you hurts. You’ve got 100 clients, 10 clients leaving, you know, it’s percentages.

And remember that’s going to change, and everyone’s on their own lifecycles in terms of their business and their accountancy journey, their suppliers’ journeys, all that kind of stuff.

And then just systems, you know. A system that works for 100 clients is not robust enough for 1,000 clients.

So again, you kind of have to have the foresight. And if something isn’t working in the business, and you’re thinking this isn’t efficient anymore, you’ve changed it too late.

You should have seen that three steps before and gone, this works now, but in eight months’ time, we’re going to have this problem and just, kind of, accept that growth is expensive.

If growth is your goal, that bottom line is going to take a hit, but you have to decide if it’s worth it, and that’s kind of the journey.

Mike Psaras

Yeah, for sure. As you said, it’s not linear at all.

Lucy Cohen

No.

Working out when the time is right to hire employees

Mike Psaras

You’re not going to be linear unless you’re really, really lucky.

I think one of the main questions people will probably have then – and you sort of touched on it – is how do you know when it’s the right time to hire someone?

Is it when you have enough money, like, to kind of, like, have them? To train them up and have to cover them on that speed to competency time?

Or is it a feeling?

Or is it like, once you’re overwhelmed, and you’re like, ah, I can’t handle this?

When is it?

Lucy Cohen

If you’re overwhelmed, it’s too late.

And if you think you’ve got enough money to hire somebody, it’s too late.

Mike Psaras

When is it too early?

Lucy Cohen

If there’s not enough work for them.

So I’ve made that mistake. We hired people and we didn’t have enough income to pay the rent, let alone, like, salaries.

They were sitting around with nothing to do.

And, of course, people sitting around with nothing to do will get bored and leave.

People have to have the right amount of work to stay engaged, feel like they’ve got a purpose, and a part of something.

So I’ve done both. I’ve hired people way too late. I’ve hired people way too soon.

You also tend to fall into a thing of like, oh, if I could just hire somebody my life would be that much easier. But hiring people just creates you a whole other set of problems.

So you have all the HR things to deal with. You have to then also navigate and deal with somebody else’s wants, needs, ambitions and problems.

You know, you’re no longer dealing with, oh, this client’s really demanding.

You’re dealing with that client’s really demanding and now my member of staff is coming in late because their cat’s sick.

You know, life happens and it’s messy.

And the more people you have, the more life is around you, and the messier it is.

And yeah, again, you have to be prepared for that.

I’d say that the right time to hire somebody is at the point you, kind of, might have one or two days a week where you’re like, oh, I’m quite busy now. I’ve kind of got a full day, and the working on the business is starting to slip into the evening.

At that point, you probably want to think, actually, I need to start thinking about hiring somebody now.

You don’t want to hire them at the point where like, you’re doing work all day, every day, and then working on the business in the evening every night.

If you’ve got a couple of days a week where you’re extending your hours into the evening doing work on the business because you’re spending your time in the day in the business, that’s when you need to hire somebody.

Mike Psaras

Love it. Yes, that was so good. So succinct.

Lucy Cohen

I wish I’d known that 16 years ago. I wish I’d know that.

Mike Psaras

Well, see, like, through this show we’re going to help so many people.

Lucy Cohen

Oh, yeah.

Creativity requires bandwidth

Mike Psaras

One’s going to know when to hire someone and when to know that they’re overwhelmed, and they’ve got too much on.

Lucy Cohen

And you will never feel like you’ve got enough money to hire somebody. That’s it as well.

Somehow you have to – and I’m not predicting about this, but somehow you have to believe in the universe.

You will never feel like you have enough money to pay people’s wages, but somehow you just will.

And it will come together, because suddenly, when you’re not dealing with all that stuff, if you’ve suddenly got this space to, kind of, take on new clients and build your business, you’re, kind of, gifted the bandwidth to work on the business.

And that’s the magic that pays the salaries.

Mike Psaras

Yeah, that’s it, and it circles back to what you were saying at the beginning. Creativity requires bandwidth.

You can’t be creative and entrepreneurial when you’re literally bogged down with accountants.

Lucy Cohen

Yeah.

Mike Psaras

And the other thing, I’ve totally forgot now, but you said something really, really nice. Follow your passion and the money will follow.

Lucy Cohen

Yeah, absolutely.

Mike Psaras

You know, you’re doing something good, the money will come.

Like, it’s a trust thing.

And as you say, we’ve said it a few times, but the universe will provide, people!

Lucy Cohen

It will. The universe will. Just, like, the right things will come your way.

And you just have to be open to seeing them.

And when you’re bogged down and just deep, like, feeling like you’re buried, you can’t, you’re not looking up to see the opportunities – and you just always have to try.

Even now I don’t get it right.

Like this weekend, I was like oh, I’ve got so much on my plate. I was having a proper, like, little pity party about something this weekend and the sun shined, and I’ve got a grip of myself, and I feel a lot better.

But even 16 years in, I was throwing myself a little pity party over the weekend because I felt a bit stressed about something.

So it happens, but you have to look up and see the opportunities. Otherwise, yeah, you’re just going to get buried in it.

Keep the faith, you’re on the right path

Mike Psaras

Yeah.

And just to wrap it up, speaking of 16 years ago, if you had a time machine, and you could go back in time to then to see yourself, your 16-year-ago self, what words of advice would you give yourself?

Lucy Cohen

Oh, that’s a great question.

Keep the faith.

Keep the faith, you’re on the right path, you’re going to get there.

So this is the thing. I don’t know if I’d change any of the mistakes I made because I’ve learnt so much from all mistakes.

No matter how painful, how financially painful they were, I’ve learned so much from them.

That lived experience has really shaped who I am.

So I, kind of, don’t want to not make those mistakes. I might not be the person I am now.

But I’d just, kind of, whisper in 23-year-old Lucy’s ear and I’d go, “Keep at it, girl, you’ve got this, you can do it. Like, it’s going to be okay.”

Just a little like, you know… so a little, like, push in the right direction, a little bit of belief. I think that’s probably all I’d do.

Mike Psaras

Yeah, that’s really, really nice.

And you’re totally right, there’s no replacement for lived experience.

I’m sure parents and friends are trying to tell you what’s going to happen if you do this, or this might happen to you and it’s like you just can’t listen to them.

You have to follow your heart and live it, and that’s the only way to find out. 

Lucy Cohen

Oh yeah.

Mike Psaras

And thank you so much. That was such a good episode.

Lucy Cohen

I’m glad you enjoyed it. I had so much fun. Thanks so much for having me on. I’ve had a blast.

Mike Psaras

Good, I’m so glad. And for me, I don’t know, it’s weird, because I don’t know, maybe I shouldn’t be using them as this, but they’re becoming my therapy, you know.

Lucy Cohen

Good! Cool.

Mike Psaras

I get to ask all the questions that I want to know, like the burning questions, and just get so much and I hope that, basically, it’ll be really helpful for everyone else.

Lucy Cohen                                                                                 

Me too. I hope people get a couple of great takeaways out of it and just, kind of, yeah… if they’re having a wobble, I hope it makes them take the next step.

Mike Psaras

I think it will do.

So yeah, thank you so much.

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