When It Pays to Pay More
Archives: Entrepreneurship
For six years, we struggled with the restaurant, training the staff, upgrading the kitchen, and expanding the menu. During that time, we went through a half-dozen managers, an assortment of well meaning people with limited experience and a variety of personality disorders that were impossible to detect during the interviewing process… but then appeared almost immediately after they were put in charge.
The things we could control – how the restaurant looked, what it served, and how much it spent – got better. But the things we couldn’t control – the quality of the cooking, the efficiency of the service, and the bottom line – didn’t improve.
Finally, we hired a guy with a lot of serious experience. We had to pay him twice what we had paid his predecessors, but less than 60 days after he started, he produced the restaurant’s first complete profit-and-loss statement. And guess what? He had turned a profit.
We had been losing about $100,000 a year on this venture. Since it was an integral part of a larger business, we were able to sustain those losses. Still, we knew we eventually had to get the restaurant to run at least at breakeven. What we hadn’t recognized was how quickly that goal could be achieved simply by hiring a more qualified manager.
I’ve made this point many times in ETR: A really good manager is worth a dozen bad ones. When you are involved in a business with tight margins, getting the right person at the helm is not just advantageous, it’s essential.
Every employee you hire should have the potential to become a “superstar.” But making that goal a reality usually requires two significant costs:
• First you must be prepared to invest a considerable amount of your time and attention to finding qualified candidates and selecting the right one.
• And second, you must be willing to invest more dollars in that person by paying him a higher salary and giving him additional support.
“Elton,” a colleague of mine in the publishing business, lured a copywriter away from us several years ago. When this young man was with us, he was good and getting better. What we didn’t realize at the time, but found out later, was that he was just about to advance from better to really great.
Elton credits this writer with a great deal of the multimillion-dollar success he’s since achieved. And I keep that in mind when I mentor young people today. “Is this person about to acquire a financially valuable skill? Is he/she about to advance to a higher, more productive level?”
When you lose a good person, it hurts. When you replace a mediocre employee with a very good one, you rejoice because your prayers have been answered.
As you push your business forward, never forget the value of surrounding yourself with valuable people. Ordinary workers are fine… but they are ordinary. Extraordinary people will improve everything quickly, painlessly, and profitably.
How do you attract potential superstars? It’s a three-step process.
1. You have to find someone as good as – or better than – you at a skill that’s crucial to the success of your business.
2. You have to make him a very generous deal.
3. You must teach him everything you know.
It’s not easy to find extraordinary people. For one thing, they are few and far between. Don’t let scarcity tempt you to accept second best. You cannot make an ordinary person extraordinary. It will eat up all your time and end in failure.
Start your search now. Go to industry meetings. Place ads. Talk to people. Even if you can’t yet afford another salary, start looking.
When you meet someone who seems great, strike up a friendship. Find out as much as you can about him. Show interest. Follow his career. Offer to help. When the time is right, drop hints. “If you ever want to do such and such… give me a call.” Say it every time you see him. The message will get through.
Do this with anyone who seems great. Keep at it. One day an opportunity will present itself and you will have not just one but several highly qualified candidates for an important job. Select and hire the best.
Work with him closely for several months until you’ve seen what he can do. If he has the potential you’re looking for, it will become apparent. Invite him to share your future.
Start looking for your superstar immediately.
[Ed. Note: Finding a superstar is one of the best ways to jumpstart your business growth. Discover more keys to skyrocketing your business to success in Michael Masterson's bestselling book Ready, Fire, Aim: Zero to $100 Million in No Time Flat.
As a special thank you to our best customers, Michael has started a new VIP service in which he gives insider business-building advice usually reserved for his private clients - a twice-weekly newsletter called Ready Fire Aim: The Michael Masterson Dispatch. If you have bought an ETR product or attended a conference and are not receiving Ready Fire Aim, please let us know by sending an e-mail to Michael@ETRfeedback.com.]
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