Hiring Advice EVERY Entrepreneur Needs to Know
Summary
- To find the right CEO or GM, utilize your network first, as relationships matter.
- If your network falls short, actively search on LinkedIn by targeting specific qualities and companies similar to yours.
- CEOs' equity typically ranges from 1-4% depending on their experience.
- Competitive CEO salaries range from $200k to $450k based on company size; use resources like payscale.com to validate.
- Actively search and reach out personally when hiring key roles to ensure you find the best fit.
- Validate prospective hires during interviews by questioning their fit across various critical areas.
- For executive hires, use a vesting schedule for equity to ensure commitment over time.
- Incorporate a cash incentive alongside equity, tied to both revenue growth and profitability to align goals.
- Determine if the hire is meant to manage daily operations or help grow the company, and hire accordingly.
- For roles like operations managers for single locations, prioritize character traits such as hard work, enthusiasm, and detail orientation.
- Sales aptitude is crucial for managers in physical locations to ensure revenue generation.
- Onboarding is vital for quick value production; consider a week-long intensive training for new hires.
- Focus initial training on core competencies that lead to early success and build strong relationships within the company.
- Evaluate your most successful employees' initial skill sets and determine what you can teach effectively to enhance your onboarding program.
Video
How To Take Action
I would suggest starting with your network. The people you already know can be a great source for finding the right CEO, GM, or any key personnel. Just ask around and leverage those relationships. If your network isn't fruitful, move to LinkedIn. Look for people who have experience in companies similar to yours. This direct approach often works well.
Next, for the CEO role, offer equity wisely. Professionals typically expect 1-4%. Use tools like payscale.com to determine a fair salary, which ranges from $200K to $450K depending on your business size. Ensure their interest aligns with your long-term goals by tying equity to a vesting schedule and including a cash incentive based on revenue growth and profitability.
When hiring any high-level executive, conduct thorough interviews to ensure they align with your company’s mission and culture. Don't offer immediate equity—instead, have a one-year cliff in the vesting schedule.
For managers at single locations, prioritize character traits such as hard work, enthusiasm, and attention to detail. Sales skills are crucial here. Look for candidates who are motivated and have an “owner-operator” mindset, as they'll likely contribute more effort and make your business more profitable.
Onboarding new hires effectively is also key. Implement a week-long intensive training program that immerses them in the company culture and their role. Focus the training on the core competencies they need for early success. Recurring weekly training sessions can help maintain and build this foundation.
Assess your most successful employees to refine your onboarding. Identify the skills they already had and what you were able to teach. Use this to create a structured training program aimed at rapidly getting new hires productive.
Good luck! Each of these steps is aimed at helping you grow without needing huge investments in time or money.
Quotes by Leila Hormozi
"When hiring a CEO, look for a leader who has influence"
– Leila Hormozi
"Use your network to find the best candidates"
– Leila Hormozi
"Think about compensation as both art and science"
– Leila Hormozi
"The fastest way to train is to put effort into the onboarding"
– Leila Hormozi
"Hire for someone who can manage and grow, not just manage"
– Leila Hormozi
Full Transcript
well why are they not growing the company if you hire someone look for someone who is a leader I'm a guy who's like more in marketing I build a personal brand on YouTube um like for three four years about recovery and addiction I tried like a couple guys to run the business it didn't really work so thank God I didn't have like an agreement for a long term with them so how do you know like how do you pick the right CEO like how do you think you're going to you need a GM instead of CEO or like do you want to give away some shares for him on the long term so he would be like I mean in general how to find and pick a really good guy to run the business while I can like expand the marketing do the media and like bring all the sales in why didn't they work out uh so actually some of them I discovered that they don't have the much skills at the beginning they were nice and everything were good but I mean we had a different Vision at the end um the other guy was more like tweeting the employees in a not really in a nice way which is like opposite of our culture because in a mental health treatment treatment business so we need to do that so it's kind of really hard like you can easily find a marketing guy or marketing director but it's not easy to find a guy who runs all that and like has all these stuff all together you know what's funny is like an operator would hear what you said be like not hard to find a marketing person what the um I mean it's it's difficult but I mean not not like a CEO it's like you find a find your partner you find a wife or it's not easy you know the first thing I'll say is that um often times finding somebody like this is best done through your network if possible um because the more relation you have uh when you're finding something like that I think the better but if you can't find someone through your network and you're going out to look then it absolutely would do outbound like I would be on LinkedIn looking for the exact type of person that I need thinking like what are companies like mine or companies that have components of my company in terms of their infrastructure doesn't need to be the external infrastructure but like their team that if I were to go and approach this person they might have interest coming to my company right or they would know people who would and so that's the first place I would start for you how to attract that person um I think that most CEOs like professional CEOs who are in like private equity for example are used to anywhere if they're inexperienced they might take 1% if they're really experienced they might take 4% in terms of like an equity like structure in the company um I haven't seen I think a lot of people that are smaller businesses tend to throw up higher numbers but I've seen like in companies that are doing 50 60 million 100 million 150 million like I haven't seen somebody with more than 4% and that's pretty standard across the board um compensation wise you know it depends on your company size I would say it probably ranges anywhere from 200 to 450 based on size and so I would go on something like payscale or salary.com and I would just like compit meaning like you can run a comp for like your size company the role you're looking for to just double check what does it say there and then I would go back on LinkedIn and I would look at those companies and I would see if I could find on LinkedIn or glass store what kind of pay that they're getting for them so because there's basically like there's what the pay scale and salary.com and all that says and then there's like word on the street which is like okay but what is like actually getting paid to these people um because I think pay is a little bit of an art and a science um and then I think like the reality is that they're not going to come knocking on your door you've got to go find them and you have to go find them because the difficulty is to attract some like this like if I were to go and try and say like I want to go find a CEO right now like I I my team is fantastic but there's a difference with Leila reaching out or Alex reaching out than like somebody on my team reaching out and so if I'm trying to get one of the best CEOs to join my team then I'm going to coming like guns blazing and I'm going to message everyone I'm going to do the out on myself because like think about it this person is the unlock for your business if it's the biggest constraint that you have then you want to throw everything at it and it means like you're chief Problem Solver right now so you go in and solve the problem so I have found the best way to be using my network so like for example like I had a role that I opened up a few days ago and I was like I need a killer so I literally go through my phone I go through my Instagram I go through everything I just think like who do I know that would know somebody like this and then I put it out there word for everybody um and then I get referrals and then the next thing I would do is I would say okay now I'm going to go outbound which is like I'm I'm going to go on LinkedIn and I'm going to find people who work at companies that would have a role like this that I would want I would start messaging those people you know and a lot of times what I do is I use my track record I'm like here's my name here's the company that I own here's what I've done in the past here's what I'm looking to do and here's what I'm looking for because I want them to know like I'm a credible person that's reaching out to them and this isn't just like some random you know message um but it's going to take work and then in terms of what you do for that person like the same framework that Frank shared yesterday like that's the framework that I use for hiring and I think the most important thing is like if you're hiring a CEO if you're hiring an executive someone you're going to pay a ton of money then I think it's really important that the last area in terms of making sure it's a fit that's what I hone in on in the interview is like are they a fit in all of these areas and if this person were to be fired in 60 days what would the reason be and then I try and work backwards from that in terms of like what are all the things I need to do to drisk this situation um for example like if you're going to bring in somebody who's at a higher level in your company like don't give them 4% equity on day one have a cliff of a year and so it's like I would never bring in an executive and say like you get 4% on D one I'd say like cool we have a one-year cliff and so that means that if you're here in 12 months 1% vests your two 2% you'll get 2% then three then four Etc um I would say like a waterfall structure like that um and then I would probably give them some sort of uh cash incentive because like there's Equity then there's their cash incentive which is Sal which I mentioned the 200 to 450 plus I would probably say some s of incentive based on Revenue uh growth and profit so like how much has Revenue grown that year and what's profit that year because you don't want them to focus on either one you want them to focus on both uh and I hope that answer your question sorry there's so much I'm like all right let's make a course thank you so much so we've got department heads our Top Line revenues around 20 million I'm thinking I want to hire a like oper manager or like just someone to like be the point of like the head and me step back and work on like just growing the business and am I on the right track and if so any advice on hiring that because I feel kind of scared because it's kind of like letting go of the wheel in a sense I I don't know if I'm on the right track here or not yeah yeah I mean I'll I'll ask you these couple of questions which is one what are the top three things this person is going to do weekly daily basis managing all department heads holding them accountable to their scorecards and then just putting out small fires you know random that comes up okay so it's mostly somebody who's a leader correct okay um how much of that person do you need to help you in facilitating growth in the company do you see them as somebody that you would like to grow into that or do you just want somebody to handle the day today I want someone to handle the day today so I can focus on growth okay um I don't I mean I think absolutely you're at the size where you could hire that people hire at half your Revenue I think it comes down to preference and where you want to spend your time you know what I mean like I like actually managing the core team that's actually something I really enjoy doing and it sounds crazy but it's it's I like it and so I just spread myself super thin but um uh I think there's no right or wrong is what I'm saying is like if you would prefer not to do that to just focus on this one thing because you know you operate best that way then let's do that you know because I think that there's different ways that you can play the role of CEO or founder some people don't manage anybody except for one person right and some people manage every person it's just like how do you know that you're going to work best and if all this noise over here is just too much that you can't get the other stuff done then get somebody and the only thing I'll say is this if you hire someone look for someone who is a leader who has influence and at this point if it's not something that you feel like you can teach that person that it means you hire for somebody who already has that but where a lot of people make the mistake is they hire someone to manage the dayto day and then what I see a lot of times is then it trans it transfers over they're like why are they not growing the company I'm like well what did you hire them for and so I think that is a very important delineation to understand is like when I'm hiring for an operator I really think about like do I need somebody that can just manage or like manage and grow you know what do I need now what am I going to need in a year so I would just think that through to understand because it's definitely a different Avatar got it thank you when hiring for uh a position such as a general manager for Brick and moral locations which you know they do a lot of stuff what are the three main threads you look for when hiring for that position so it's an operations manager for a physical location yeah because they but they do a lot of stuff so it's like what's the most important thing you look for it yeah well I I'll give you a couple um do you want technical skills or character traits well character trace for was more important in my experience but technical also help um I would say somebody who's hardworking enthusiastic and detail oriented okay um and then how that translates into technical skills is I want somebody who is sales driven has sales aptitude because when you're running a single location like if you're not able to make sales and generate Revenue that's a little tough um and so I wouldn't want someone who just knows back office back operation stuff that's actually not when we're looking to hire um like in our portfolio companies that have locations I'm looking for sales-oriented people who we can teach a lot of this customer success and operational side uh too that doesn't mean that eventually one day you're going to have one Mega operator over all of them which that would happen eventually if you expand locations but for just like a single location um that's what I'd be looking for out of somebody and I think you want somebody that wants to put all that that's hungry they want to put all their discretionary effort into this location because what you'll see is that to make single location metrics work you can't have some giant team and so a lot of people hire the wrong I would say like Avatar they hire people that just want to clock in and clock out to run their locations doesn't really work in a small business single location um at least like the profitability difference is insane like we have one chain and their locations where we have what we call like the owner operator mindset people where we hired them with the intention of like this is like your location you're running it it's your business um those locations are twice as profitable as the ones that have hired just like clock in and clock out and that's just discretionary effort it's not like they're not doing the job they're just not putting in that extra effort you know yeah got it thank you but like a lot of skills I think for running a single location of of certain things like can be taught it's not something that you need to be able to hire that exact person who's done it before yeah yes for the record my experience is always easy to teach skills to someone with aptitude and a good heart than trying to H hire you know technical people that are just horrible people yeah just not a match that's great then you're on the right track all right thank you for sure we have about 15 guys right now we do a lot of polishing like skilled labor um I'm trying to grow it to like 30 to 40 guys um and I'm trying to figure out what's the best way to FastTrack the the training because we like to we prefer to bring them on without really knowing anything cuz they didn't they don't have bad habits yeah um and then train them ourselves uh so what's the best way to FastTrack the training and then maintain high quality think about like this right so for a customer you guys have heard like time Dev value is very important right so like how quickly can you get this person the value of the product they just got I look at it in the same with an employee which is like how quickly can I get them producing value in the company the fastest way is to put a lot more effort into the onboarding um and so for me for example like structuring out for a role that is duplicative like the one that you're describing we have a lot of this people doing the same thing we have that in a couple portfolio companies and so what they do is they batch onboard people so basically what they'll do is they will every month or however long they will if you're you're already in person I assume for this business um they will have them all do basically like a whole weekl long training and so before they do anything they go through this s-day training and then thereafter they have once a week continued training as well as self- assignments I really think The Upfront investment of those seven days makes all the world of a difference because you're immersing that person into everything they're building relationships they're building a relationship with you with their peers with the company the amount of like contextual knowledge that they get from those seven days just like far surpasses think about how long you would have to like do to replicate that it's like okay I need seven days let's say they're they're there spending time with people for 12 or 13 hours a day it's like how many months of once once a week meetings would that take yeah you know and so when I I think of onboarding I think of not onboarding but acceleration for an employee so it's like I actually feel like onboarding is such a lame term it's like it's really acceleration how do you get them up to speed as fast as possible and so what you need to think about in my opinion is what are the core things that in those seven days they need to learn like to be fundamentally successful uh and so I would probably look at if you have a hard time thinking that through who were my most successful people off the bat and there's two things you want to think about one what skills did they already have when they came in because you say they had nothing they had some maybe it means that they could show up on time maybe it means that they could do math maybe it means that they knew how to say no to customers think about those things right so think about those best people what were the skills they already had and then the next piece is what were the skills that you successfully taught those people because what this is doing is it's figuring out what skill level are you able to successfully teach because we all have one I'm know for me what level of skill I can teach and what one is truly not worth my time based on the business I have or maybe is beyond my level of competence to teach and then I would use that to put together that 7-Day accelerator okay that makes sense yeah thank you