There is no one-size-fits-all answer to the above title question. However, we can provide some tips to help you figure out what works best for you.
There are two main things to consider:
Where is your gap?
What are your resources?
Your gap is what your business needs due to a lack of capacity or skills. Your resources are the amount of time and money you have to acquire the capacity or skills needed.
Identify What You Actually Need
The first step is to identify your needs (or your gap). Small managed services providers (MSPs) often ask if they should hire an admin or a tech first. Sometimes a dedicated salesperson is an option—but a small MSP can rarely support the amount of business a dedicated sales person can bring in. So it’s probably not an ideal early hire. When hiring your first employee, it frequently comes down to whether you—as the business owner—want to continuing doing tech work or work more on the business. For a good description of what it means to work on the business, check out The E-myth Revisited by Michael Gerber.
If you want to grow the business, you probably need to pull yourself away from the tech by replacing yourself in that capacity. If you’re happy doing the tech—and growing a bit slower—hire an admin. There are pros and cons to each option. From my personal experience, hiring an admin early on can dramatically increase the velocity and regularity of cash flow by having someone do frequent, consistent billing and proper followup on collections. As your MSP evolves and becomes larger, you’ll likely divide the generic admin and tech roles into more specific jobs and start hiring sales and marketing staff. The more employees you have, the more likely they are to have more specific roles. The more specific the roles, the more specific the skills.
From a skills standpoint, the early employees will be more generalists and therefore usually cost less. The expense in hiring generalists is in training them—but early stage businesses typically have more time than money so it’s okay. As the business grows and employees have more specific experience and skills, you’ll pay more for them—but they’ll require less training. This actually aligns with the needs and resources of the business at the right times in the lifecycle.
Planning out the Future of Your Business
One of the things that helped make this real for me was to design what I thought my organizational chart should look like in three to five years. I put all the positions on the chart that I thought I’d need to run the business at that level. I then put my name in all the boxes that I wanted or needed to do. Next, I put the name “Admin” in all the boxes that an admin person could do. Finally, I put the name “Tech” in the boxes that a technician could do. This graphically allowed me to see what my greatest need was—and which role I should hire first. It also provided a roadmap for future hires.
Designing the people side of your organization can be a daunting task. With a little planning and evaluation, it can play a big role in how well your business grows. In any business, keep in mind that even though you’re hiring people with certain skills to do specific work, they must fit well into the company culture.
Eric Anthony is the Head Operations Nerd at SolarWinds MSP. Before joining SolarWinds, Eric ran his own managed services provider business for over six years.
You can follow Eric on Twitter at @operations_nerd