Go Senior Early. Here's Why.

Speaker A: Hey there firm owners. I'm Ryan Lazanis and you're listening to the Future Firm Accounting Podcast, the place where you'll get one practical lesson each episode to help you unlock freedom and growth in your firm. Thanks for tuning in today. I want to talk about hiring and and specifically about a decision I made early on back in my old firm that felt genuinely scary at the time, but turned out to be one of the best calls I ever made for the business. When I started my firm, Zen Accounting, I was at around $100,000 in revenue. Not exactly a position where most people would feel comfortable making an aggressive hire. And yet my very first hire was an experienced CPA who came from PwC. My next hire after that, if, if memory serves me, was another experienced cpa. So right out of the gate, before the firm had really proven itself, I was building with senior people. I went super senior, super early. Senior enough that I shook in my boots a little before pulling the trigger. And I'm not going to pretend there weren't real risks involved. I was barely paying myself for the first year or two. That wasn't comfortable. But I wanted to grow and I knew what I needed to make that happen. Here's how I was thinking about it. Almost all client work felt like low value work to me. Not low value in ah, an absolute sense, but low value relative to what else I could be doing with my time. My time was worth more spent growing the business than being tied up in one on one relationships where I'm presenting financial statements or putting out client fires. I needed someone who could step in and handle those things without needing me involved. Because as long as I was the person doing that work, I was the bottleneck. And a bottleneck can't grow. So I made the decision to hire senior and it paid off. I was able to grow the firm while maintaining my freedom and sanity, and eventually the firm became attractive enough to an outside buyer that they acquired it. I genuinely don't think I could have gotten there without senior team members on board early. They made the difference. That experience is why I'm consistently a proponent of firms prioritizing senior hires, and why whenever I see an overworked firm owner who's stuck as the bottleneck, one of the first things I look at is the level of seniority on their team. Almost always it's lacking. And when I say senior, I mean genuinely senior, not someone with three or four years of experience. I'm talking five to 10 years or more senior to the point where their salary makes you a little uncomfortable. That's the threshold I'm pointing at. If the number doesn't give you a slight pause or you might not be going senior enough, most firm owners stop themselves before they get there, and the fear is understandable. A senior hire is a significant line item, and when you're already watching cash flow closely, adding that commitment feels risky. What most firm owners miss is the other side of that equation. The cost of making a cheaper hire that doesn't actually solve the problem, or the cost of not hiring at all. Here's a thought process I see play out often. A firm owner is working 50 plus hours a week. A quarter of that time is tied up in complex client situations that really need someone with serious experience to handle well. Their instinct is to hire a manager level person and train them up over time to eventually take that work over. A cast manager role pulling from current salary data is going to cost you roughly 100 to $115,000 depending on the market and the firm. And sure, that role might help over time, but if that person is going to require any hand holding from you to get there, you haven't actually freed up your time. You've just added a training obligation on top of everything else you're already doing. So consider going a level up. A senior manager in the same cast stream is going to cost you somewhere in the range of 40 to 50% more than that manager role. You're looking at numbers that could push past 130, $140,000 depending on location and firm. That's a real jump, and it's the number that makes most firm owners flinch. But think about what you're actually buying with that extra investment. If a senior manager can step in and immediately take work off your plate without needing you to guide them through every decision, that's a completely different proposition than a manager who needs months of development before they're operating independently. The senior person doesn't need you to hold their hand. They've already done the work before they come in, knowing what good looks like, and they can often raise the standard of the work you're already producing. That's the ROI that doesn't show up in the salary line, but absolutely shows up in your margins, your capacity and your ability to grow. Spending an extra $50,000 on a truly senior hire is, in the grand scheme of things, peanuts compared to the return you can make when that person frees you up to focus on what actually moves the needle. Think about it this way. If a senior hire gives you back even 10 hours a week, of high value time. And you use that time to bring in one or two more quality clients a month. The math works out very quickly. The higher pays for itself and then some. Obviously they need to check the boxes on culture and fit. That goes without saying. But if you know you need someone senior on your team, my general rule is to just bite the bullet and go as senior as you can afford. Even if the salary makes you a bit uncomfortable or you have to stretch a little. The fear is the opportunity cost calculation that most firm owners never do. They calculate the cost of the hire, but but not the cost of staying stuck. So here's a question worth sitting with. What is it actually costing you to remain the bottleneck right now? Missed revenue from clients you couldn't take on because you were already at capacity? Deals you didn't close because you were too buried to follow up? Strategic initiatives that kept getting pushed to next quarter. All of that has a price. It's just invisible on the balance sheet. The higher that feels risky is often the one that pays the most. And the hire that feels safe, the one that keeps costs down, often keeps you stuck too. There's also something worth saying about what a truly senior hire signals to your clients and your team. When you bring in someone with a serious background, clients feel it. The quality of the advice goes up, the confidence in the room goes up, and your team has someone to learn from and you have someone who can represent the firm at a level that doesn't require you to be present for everything. That's not just an operational benefit, it's a positioning benefit. It changes what kind of firm you are and what kind of clients you can credibly go after. Junior hires have their place. I'm not saying you build a firm entirely of 10 year veterans, but when you're stuck as the bottleneck, when you're working 50 hours a week and still can't get ahead of it, the answer is almost never to add more junior capacity. It's to add the kind of senior capacity that can actually change the equation. Now I want to be fair here because I've been making the case pretty one sidedly for hiring senior, and there are real challenges with doing it early that are worth thinking through. The most obvious one is cash flow. A, uh, senior person costs more upfront and if you don't have a consistent pipeline coming in, you're betting on revenue that isn't there yet. You need to be honest with yourself about whether the business can actually support that salary while you're still building. Stretching is Fine. But gambling on revenue that isn't there yet is a different thing entirely. The second thing is that senior people need the right environment to thrive. They've been around the block, they have options. And if they walk into a firm where processes are a mess, pricing is all over the place, and nobody's clear on direction, they're going to get frustrated fast. Or worse, they'll try to impose their own way of doing things, which creates friction. You don't need to be perfect before you hire senior, but you need to have enough clarity about what you're building to that a senior person can actually contribute to it rather than fight against it. There's also an ego dynamic I don't see talked about enough. A lot of firm owners hire a senior person thinking they'll take over all the complex work. But then the owner still wants to be involved in every decision. Or the senior person comes in with strong opinions from their previous experience and wants to do things their way, which bumps up against how the owner wants to operate. Managing that dynamic takes self awareness. And if you're not ready for it, it becomes exhausting for both sides. And fourth, sometimes what looks like a capacity problem is actually a pricing problem. You hire a senior person thinking they'll help you handle more clients, but what you really needed was to charge more for the clients you already have. Worth making sure you're solving the right problem before adding headcount at any level. That said, when the timing is right and the fundamentals are in reasonable shape, hiring senior early can absolutely accelerate your growth in a way that nothing else really can. I've lived this at Zen Accounting. Hiring senior early while I was still barely paying myself was objectively the scarier path. It would have been easier to hire someone cheaper, someone more junior, someone whose salary didn't make me nervous. But it's also the reason the firm grew the way it did. Because those senior people could hold the client relationships and and handle the complex work without me in the room. I wasn't needed for every decision. I wasn't the answer to every question. Because once you have truly senior people around you, people who don't need you to function at a high level, something shifts you stop being the ceiling of your own business. The firm can grow beyond what you personally have capacity for, which is the only way it ever really scales. And once you experience that, you genuinely will never go back. Hopefully that helps. And if you want more help, be sure to check out my future firm Accelerate Program. We'll help you unlock freedom and growth in your firm through proven systems, expert coaching and a like minded community of hundreds of others just like you. For more info, just head on over to www.futurefirmacccelerate.com so that's all for today. Hope you found today's episode helpful and I'll catch you in the next one. Take care. Sa.