should you pay your first employees
salary or equity this is a great
question that came in from one of my
YouTube viewers PAC media who it in
which term should I hire my first few
employees salary or equity almost always
I would pick salary if you had a choice
between the two the reason is you
usually make mistakes on your first
hires if you look at most successful
business and you look at who their first
hire was they’re rarely still with the
business so you don’t want somebody
who’s not with the business long term to
have equity in your company you have to
be really careful about who you give it
equity to and how much when you first
start hiring people it’s exciting right
you have somebody on your team you’re
you’re giving away the tax that you
don’t want to do you’re hiring someone
who is better than you at some of these
tasks and it lets you focus on the
bigger picture stuff to grow your
business at and it’s great and I highly
recommend it the challenge is if you’ve
never hired people before you’re going
to make mistakes right you’re going to
make mistakes in managing you’re going
to make the mistakes in interviewing
you’re going to make mistakes and
actually bring them on board and in
training your company will probably
change its product or service a number
of times and maybe the skills that you
hired that first person for are not
useful anymore you’re going to make
mistakes your business is going to
change so the people you bring on board
may not be the right fit for you long
term with the business so I would
generally lean towards salary now you
may not have a lot of salary that’s the
thing a little great Evan let’s give
them all Sally but I don’t have any
money to pay these guys there’s a couple
ways you can do it okay
first hire part-time the first guy I
hired was for one hour a day one hour a
day to free up my time to do other
things
I hate hiring people I hate spending
money until I’m making money so I at the
start of any project put in my own my
own guts my own my own effort my own
energy I’m doing everything even if I’m
not great at it
I start doing it myself to learn about
it see if I want to keep doing this if
I’m excited by it to start trying to
make some money at it and if I make some
money then I start investing that back
into the project and that might be
technology it might be resources but it
might be people
right I might delegate this off to
somebody else to do but I know I’m
committed to it this is the path I’m
going to follow I’m not just testing a
few things and I know I have a way to
make money so I know it can afford to
pay this person so I encourage
entrepreneurs at the start to do
everything yourself and once you start
making money and you know you’re going
to continue on this path bring on people
to support you but it doesn’t have to be
a full-time person start part-time and
build up from there another way to do it
is based on success of projects and this
is where you have a little more trust
with the person if they have something
that can be measured can be defined
easily then you can give them a split of
the revenue comes in from that project
you’re not giving up equity in your
business but you’re giving them
ownership of a specific project that if
it makes money they’re going to make
part of it back as well now the
exception if you find somebody who you
think could really be a good long-term
piece of your business
there could be an option to give them
some equity I want to warn you though
bringing on a partner is like getting
married you have to really know them
like them trust them believe they have
the same values as you have the same
goals and vision as you it’s not just
somebody off the street it’s really
really hard to find good partners and if
you bring on the wrong person it could
sink your business they could sink your
business even a minority shareholder can
hold a lot of stuff back from your
business are moving forward and you
don’t need people who are not in line
with what you’re trying to do with the
business you need something to
contribute be there long term believing
the same thing you do have the same
values and be on board with the plan for
the business if not you can’t give up
equity if you are going to give up some
equity I would strongly also encourage
you to have some kind of build in
program so they’ll get it right from the
start they have to prove themselves they
have some milestones to reach both in
terms of how long they’re with you for
and in terms of results that you’re
looking for in one of my software
companies I started with a business
partner mine we had another business
together so I work well with him and we
were bringing on a third person to be
our salesperson and he worked out great
at the start and we looked at giving him
some equity
it wasn’t just oh here here’s you know
30% of the business
go forth he had to earn in he had to go
out and meet quotas he had to go and
sell he had to meet these expectations
and after three months he got a certain
amount six months a certain amount a
year a certain amount of equity if he
hit his milestones and it’s laid out
from the beginning so those expectations
of what to do but more important than
just reaching the results is again
making sure they had the same values as
you do and they’re right fit long term
from your business you see this as
somebody who you can work with even if
it wasn’t this business something
totally different you want to work with
this person long-term in tons of
businesses that’s when you want to bring
on an equity partner so for the most
part I’m looking salary I’m looking
part-time at the beginning and I’m
looking to only spend when I’m making a
little bit of money building that up to
eventually getting full-time people and
building up to going from one person to
two people to five people to ten people
to as many as you need to grow this
thing and in the rare circumstance that
you find somebody who would be a good
partner for your business let them work
with them over a period of time to make
sure you guys agree on things and have a
system where they have to earn in or buy
in over a period of time when they are
meeting their deadlines there’s no hard
and fast rule each person each case you
got to take one by one that’s part of
the thrill and the challenge of being an
entrepreneur but if you do it properly
it can make all the difference in the
world for your business believe for
those you’re watching like the video
please give it a thumbs up below it
makes you want to do more for you and if
you have a comment or a question leave
it below
I love seem to come in they make my day
every day so I really appreciate it
those comments keep me going and doing
what I’m doing so thank you so much
leave a comment and I’ll see you soon
you
salary or equity this is a great
question that came in from one of my
YouTube viewers PAC media who it in
which term should I hire my first few
employees salary or equity almost always
I would pick salary if you had a choice
between the two the reason is you
usually make mistakes on your first
hires if you look at most successful
business and you look at who their first
hire was they’re rarely still with the
business so you don’t want somebody
who’s not with the business long term to
have equity in your company you have to
be really careful about who you give it
equity to and how much when you first
start hiring people it’s exciting right
you have somebody on your team you’re
you’re giving away the tax that you
don’t want to do you’re hiring someone
who is better than you at some of these
tasks and it lets you focus on the
bigger picture stuff to grow your
business at and it’s great and I highly
recommend it the challenge is if you’ve
never hired people before you’re going
to make mistakes right you’re going to
make mistakes in managing you’re going
to make the mistakes in interviewing
you’re going to make mistakes and
actually bring them on board and in
training your company will probably
change its product or service a number
of times and maybe the skills that you
hired that first person for are not
useful anymore you’re going to make
mistakes your business is going to
change so the people you bring on board
may not be the right fit for you long
term with the business so I would
generally lean towards salary now you
may not have a lot of salary that’s the
thing a little great Evan let’s give
them all Sally but I don’t have any
money to pay these guys there’s a couple
ways you can do it okay
first hire part-time the first guy I
hired was for one hour a day one hour a
day to free up my time to do other
things
I hate hiring people I hate spending
money until I’m making money so I at the
start of any project put in my own my
own guts my own my own effort my own
energy I’m doing everything even if I’m
not great at it
I start doing it myself to learn about
it see if I want to keep doing this if
I’m excited by it to start trying to
make some money at it and if I make some
money then I start investing that back
into the project and that might be
technology it might be resources but it
might be people
right I might delegate this off to
somebody else to do but I know I’m
committed to it this is the path I’m
going to follow I’m not just testing a
few things and I know I have a way to
make money so I know it can afford to
pay this person so I encourage
entrepreneurs at the start to do
everything yourself and once you start
making money and you know you’re going
to continue on this path bring on people
to support you but it doesn’t have to be
a full-time person start part-time and
build up from there another way to do it
is based on success of projects and this
is where you have a little more trust
with the person if they have something
that can be measured can be defined
easily then you can give them a split of
the revenue comes in from that project
you’re not giving up equity in your
business but you’re giving them
ownership of a specific project that if
it makes money they’re going to make
part of it back as well now the
exception if you find somebody who you
think could really be a good long-term
piece of your business
there could be an option to give them
some equity I want to warn you though
bringing on a partner is like getting
married you have to really know them
like them trust them believe they have
the same values as you have the same
goals and vision as you it’s not just
somebody off the street it’s really
really hard to find good partners and if
you bring on the wrong person it could
sink your business they could sink your
business even a minority shareholder can
hold a lot of stuff back from your
business are moving forward and you
don’t need people who are not in line
with what you’re trying to do with the
business you need something to
contribute be there long term believing
the same thing you do have the same
values and be on board with the plan for
the business if not you can’t give up
equity if you are going to give up some
equity I would strongly also encourage
you to have some kind of build in
program so they’ll get it right from the
start they have to prove themselves they
have some milestones to reach both in
terms of how long they’re with you for
and in terms of results that you’re
looking for in one of my software
companies I started with a business
partner mine we had another business
together so I work well with him and we
were bringing on a third person to be
our salesperson and he worked out great
at the start and we looked at giving him
some equity
it wasn’t just oh here here’s you know
30% of the business
go forth he had to earn in he had to go
out and meet quotas he had to go and
sell he had to meet these expectations
and after three months he got a certain
amount six months a certain amount a
year a certain amount of equity if he
hit his milestones and it’s laid out
from the beginning so those expectations
of what to do but more important than
just reaching the results is again
making sure they had the same values as
you do and they’re right fit long term
from your business you see this as
somebody who you can work with even if
it wasn’t this business something
totally different you want to work with
this person long-term in tons of
businesses that’s when you want to bring
on an equity partner so for the most
part I’m looking salary I’m looking
part-time at the beginning and I’m
looking to only spend when I’m making a
little bit of money building that up to
eventually getting full-time people and
building up to going from one person to
two people to five people to ten people
to as many as you need to grow this
thing and in the rare circumstance that
you find somebody who would be a good
partner for your business let them work
with them over a period of time to make
sure you guys agree on things and have a
system where they have to earn in or buy
in over a period of time when they are
meeting their deadlines there’s no hard
and fast rule each person each case you
got to take one by one that’s part of
the thrill and the challenge of being an
entrepreneur but if you do it properly
it can make all the difference in the
world for your business believe for
those you’re watching like the video
please give it a thumbs up below it
makes you want to do more for you and if
you have a comment or a question leave
it below
I love seem to come in they make my day
every day so I really appreciate it
those comments keep me going and doing
what I’m doing so thank you so much
leave a comment and I’ll see you soon
you
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