How to Find the Sales That Pay for a New Hire

You'll see how much more you would need to sell each year to keep your take-home where it is with the new person working for you. The answer is in your own units, such as clients, sales or subscribers, with the full cost of the hire broken down underneath.

Before You Start

• Where it is: "Plays" in the navbar, then "Start New". The Play is called "New Hire".
• What you need: My Business set up with your revenue streams, and Plays unlocked by ending the Score Card's tour.
• Plan: a paid tier. Each run costs 1 credit, and so does each pay or benefits estimate. On the free plan, a Custom Scenario lets you add the cost row and adjust volumes yourself.

Steps

1. Open the Play. On the Plays page, click "Start New". In "Start a New Play", choose "New Hire" under "Explore All Plays". The band at the top shows "Your take-home today", the figure the Play keeps steady.
2. Describe the role. Under "The Role", type a "Job title" and, if you like, "What they'll do". Then pick the "Worker type": "Employee (W-2)" or "Contractor or Agency (1099)". The hypothetical Steadyroot Wellness might enter "Virtual Assistant", "answers client emails, books sessions, sends invoices" as a contractor.
3. Set the pay. Choose "Yearly", "Hourly" (rate × hours a week × weeks a year) or, for a contractor, "Monthly fee". Steadyroot would choose "Monthly fee" and enter $1,000. Not sure what the role pays? Click "Estimate Pay". Occam looks up a market range with its sources, and you accept the figure or type your own.
4. Add benefits (employees only). Enter benefits as "% of pay" or "$ a year", or choose "No Benefits". "Estimate" looks up a typical figure. Employer payroll taxes are added for you.
5. Say where the work sits. Under "Work", choose "Runs the business (admin)", "Delivers the work" (pick the stream, or General) or "Closes sales (selling)". A contractor can also be placed under "Wins customers (marketing)". A sales hire can carry a commission: a percent of sales on the streams you tick, paid on "New sales they add" (the default) or on "All sales on these streams, today's included".
6. Mark the costs that change. "Costs That Change With This Hire" lists your Admin, Marketing, Selling and Direct Costs rows. Set each one to "Stays", "Goes Away" or "Drops To". Under "New Costs", "Add a Cost" covers anything new the person needs each year, such as a software seat.
7. Choose which streams grow. "Streams to Keep As-Is" lists every stream. Tick any that can't grow, and every other stream grows by the same share. "What Do You Call One?" gives the answer your own word for a sale; on a service stream it names one session, so Steadyroot might type "sessions" for 1-on-1 Coaching.
8. Choose how marketing moves. "Grows with sales, same cost per new customer" (the default) adds the marketing to win the extra customers. "Stays the same" leaves marketing where it is. Screenshot to come: New Hire intro with the role, pay, costs that change and streams filled in (hire-intro.png)
9. Click "Run Play". Add anything that helps judge whether those sales are realistic in "Additional context for Occam" first. The run costs 1 credit, charged only if Occam's review finishes.
10. Read the answer. At the top of "Recommendations", one sentence gives the extra sales a year and how many more clients or sales that means on each stream. "Extra Sales by Stream" shows today, needed and more for each stream, with the direct costs and marketing those sales bring. "What the … Costs" breaks down the pay, benefits, payroll taxes, new costs and costs that go away into the "Net Cost of the Hire", then "Tax Savings" and the "After-Tax Cost". Last, Occam grades the plan "Within Reach", "Stretch" or "Unlikely" and says why. Screenshot to come: New Hire answer with the sentence, Extra Sales by Stream and the cost breakdown (hire-answer.png)
11. Adjust it yourself. Click "Duplicate & Customize" to change the pay, the costs or the extra volume on a copy. Changing a volume also moves that stream's direct costs and the marketing to win those customers.

Tips

• Try the same role both ways, as an employee and then as a contractor. Contractors usually cost more per hour, but they carry no payroll tax or benefits.
• The costs a hire makes unnecessary are often what decides it. Mark the contractor they replace, or the software an agency brings, as "Goes Away".
• The "After-Tax Cost" is how much your take-home drops if the extra sales never come. Compare it with what you could stand to lose in a slow year.
• For the reasoning behind the numbers, read Should I Hire? Doing the Math on Your First Employee.

Common Questions

Does the Play change My Business?
No. It runs on a copy, and My Business stays as it was.

What if no extra sales are needed?
When the costs that go away cover the hire, the answer says so: "The costs that go away cover this hire, so no extra sales are needed."

Why does a stream show "kept as-is" when I didn't tick it?
Some streams can't grow by adding volume, such as a flat retainer that doesn't change with the number of clients, or a stream with no sales yet. The intro lists those streams as already kept as-is and gives each one's reason.

Is the answer monthly or yearly?
Yearly. Service streams entered per month show the extra clients per month too.