When It Pays to Pay More

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.

Finally, we took one partner’s advice and hired a guy with a lot of serious experience. We had to pay him about twice what we had been paying his predecessors, but less than 60 days after he started … guess what? He had turned a profit.

If we had put this guy in place a year earlier, we’d be about $40,000 better off, on a net basis, than we are today. If we had been lucky and/or smart enough to hire him in the beginning, we’d probably have been collecting dividends for years instead of losing hundreds of thousands of dollars.

I’ve made this point many times before in ETR: Having great employees is not just advantageous, it’s essential. But making that goal a reality in your business 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 ones. And second, you must be willing to invest more dollars in those people by giving them higher salaries, bigger bonuses, and all the support they need to do the job.

Never forget the value of surrounding yourself with the best people. Ordinary workers are fine, but they are ordinary. Extraordinary people will improve everything in your business quickly and painlessly.

[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]