I started my business in my home. It was just me. Then I contracted with other solopreneurs like myself. Eventually, I hired my first employee and grew my engineering/construction company into a 30-employee business with over $10 million in revenue. I never could have done what I did without my employees.
And yet, many small business owners I coach are reluctant to hire people to grow. They get stuck in the same trap: doing everything themselves, paying themselves whatever is left over, and using profit for personal expenses instead of reinvesting in the business.
This post will show you how to make the shift from wearing all the hats to becoming the leader your company needs.
Step 1: Price Right
Growth starts with healthy margins. A good rule of thumb is:
-
50% for direct costs (labor & materials)
-
40% for overhead (admin, marketing, facilities, etc.)
-
10% for profit
Price too low, and you’ll never have enough margin to hire help or reinvest. If you’d like to learn more about where these percentages come from read my blog post entitled “Profit & Loss Statement Ratios Every Small Business Owner Should Know“
Step 2: Pay Yourself Like an Employee
Many owners either:
-
Pay themselves nothing while overpaying others, or
-
Overpay themselves as soon as revenue grows.
Both approaches starve the company. The right approach is to pay yourself like you would pay a replacement employee.
Here’s a healthy guideline:
-
$100K–$500K revenue → $75K salary
-
$500K–$1M revenue → $100K salary
-
$1M–$2M revenue → $150K salary
-
$2M–$5M revenue → $200K salary
-
$5M–$10M revenue → $250K salary
Your pay grows with the role you play, not with whatever is left in the bank account.
Step 3: Drop Hats in Sequence
At the start, you wear every hat in your business—worker, admin, sales, and leader. That’s normal, but you can’t stay there forever. Growth requires shedding roles one by one.
-
Under $200K: You’re still doing it all.
-
Around $200K: Drop the worker hat and hire others to produce.
-
Around $500K: Let go 100% of admin duties and hire support staff.
-
Around $1.5M: Leave most sales activity to your sales team.
-
Over $2M: You’re a true CEO, responsible only for leadership.
Here’s what that transition looks like visually:
As revenue grows, you don’t just earn more—you earn differently. Your salary reflects the market value of the one role you keep, while profits are reinvested so your company can expand.
Step 4: Reinvest Profit Before Lifestyle
Profit isn’t just “owner’s bonus money.” It’s the oxygen your company needs for growth.
Before you buy the house, boat, or vacation, your company must get the first right of refusal on profit.
Reinvesting profit allows you to:
-
Hire staff before you burn out
-
Build infrastructure (space, systems, tools)
-
Weather cash-flow delays as you scale
Only after growth investments should you take extra distributions for personal spending.
Step 5: Plan for Facilities & Infrastructure
Hiring means more than payroll. Employees need desks, phones, software, and sometimes vehicles. These are predictable costs and should be budgeted alongside salaries. The good news: banks often lend for facilities and equipment because they’re collateralized, unlike payroll.
The Payoff
If you follow this path, you’ll make the natural transition every growing business owner must make:
-
From wearing all the hats to leading a team
-
From living off leftovers to paying yourself fairly
-
From robbing your company to reinvesting for growth
At that point, you’re not just a worker in your company. You’re the CEO.
▶️ Next step: Want to see exactly when to hire, what to pay yourself, and how to forecast growth? Get my free training and tool here: Build Your 10-Year Revenue Roadmap.
