Hiring people is a trap. I know that sounds cynical, or maybe like I’m just a bad leader, but I’ve spent the last six years watching service providers drown the moment they hit the ‘growth’ button. They think that more heads equals more capacity, which equals more profit. It doesn’t. Usually, it just equals more meetings, more Slack notifications, and a much smaller paycheck for the person at the top.
The Tuesday I realized I was a terrible boss
It was October 2019. I was sitting in a Caffe Vita in Seattle, staring at a spreadsheet that made absolutely no sense. At the time, I had four full-time employees. We were doing ‘good’ work—or so I thought. But my net profit was actually lower than when I was working by myself with a part-time VA. I had to fire one of them that afternoon. A guy named Mark. He was a great guy, but I had hired him because I was overwhelmed, not because I had a clear role for him. I felt like a fraud. I remember the condensation on the window and the way my hands were shaking because I realized I had built a cage for myself. I wasn’t a consultant anymore; I was a full-time babysitter who didn’t even like the kids. I fired him, went home, and spent three days in bed. Total disaster.
That was the turning point. I realized that scaling isn’t about headcount. It’s about how much you can do with the least amount of human intervention possible. What I mean is—actually, let me put it differently. It’s about protecting your time from other people’s incompetence, including your own.
I decided then that I would never have a ‘massive’ team. I’d rather have a lean, mean operation that actually makes money than a big agency that just looks cool on LinkedIn. Most agency owners are just insecure people who want to feel like bosses. There. I said it.
You don’t need a team, you need a menu
The biggest mistake service businesses make is being ‘custom.’ If you tell a client ‘we can do anything,’ you are signing up for a life of manual labor. You can’t scale custom work without hiring experts for every single project. That’s how you end up with 15 people and a 12% margin. No thanks.
Instead, you need to productize. Turn your service into a menu. In my own business, I stopped taking ‘strategy’ calls that could go anywhere. I created three specific packages. If a client wants something else? I tell them no. I know people will disagree with this—they’ll say you’re leaving money on the table—but I think you should never, ever offer a discount or a custom tweak, even if a client is literally crying about their budget. It’s a bit harsh, but the moment you bend, your systems break. If you can’t document a process in a 10-step checklist, you shouldn’t be selling it. That’s the rule.
- Standardize the intake: No more 60-minute discovery calls. Use a detailed form.
- Fixed pricing: Hourly billing is a scam you play on yourself.
- Narrow the scope: Do one thing exceptionally well.
Scaling a service business is like trying to carry a tray of overfilled martinis through a crowded bar. The more people you add to the tray, the more likely someone is to trip.
Why I’ve spent $4,200 on software to avoid talking to people
I might be wrong about this, but I honestly believe that a well-configured Zapier account is worth more than two junior associates. I’ve spent a disgusting amount of time—probably 40+ hours in Q3 of 2021 alone—mapping out automation paths. I tracked it. I tested 14 different ways to automate my client onboarding. When a client pays an invoice in Stripe, it now triggers a folder creation in Google Drive, sends a Slack notification (to a channel I rarely check), and invites them to a kick-off call via Calendly. It took me three weeks of trial and error to get it right. But it works 100% of the time. Humans work about 70% of the time if they’ve had enough coffee.
I refuse to use Monday.com, by the way. I hate the interface. It feels like a toy for people who want to look busy instead of actually working. I stick to Trello or just a simple Airtable base. If the tool is too ‘pretty,’ it usually means it’s hiding a lack of actual functionality. I’ve found that for every $100 I spend on the right software stack, I save about 5 hours of ‘management’ time per week. That’s a trade I’ll make every single day. Worth every penny.
The project manager myth (and why I hate Slack)
Here is my most unfair take: Project managers in small service businesses are mostly useless. They are ‘professional reminders.’ If your systems are good, you don’t need a person whose entire job is to ask other people if they’ve done their job. You just need the system to flag when something is late. I’ve seen so many $500k-a-year businesses hire a PM for $60k plus benefits, and all it does is add another layer of noise.
And don’t even get me started on Slack. I actively tell my friends to delete it. It’s a productivity cancer. It creates this false sense of urgency where everyone feels like they’re working because they’re typing, but nothing is actually getting done. In my business, we use email for everything non-urgent. I know, I know—email is ‘old.’ But email has a beginning and an end. Slack is a never-ending void of ‘hey, do you have a sec?’ No, I don’t have a sec. I’m trying to run a business.
Anyway, I digress. The point is that humans create complexity. Software creates consistency. Choose the latter whenever you can.
The math of the “Third Person Trap”
I did some digging into my old books and some data from a few peers in a mastermind group I used to be in. There’s this weird phenomenon I call the Third Person Trap. When you are a solo operator, your margins are huge (maybe 80%). When you hire one person, they usually pay for themselves. But when you hire that third person—the one meant to ‘take things off your plate’—your overhead usually spikes by about 18.4% without a corresponding jump in revenue.
I saw my own margins drop by 42% the year I went from two to five people. We were making more top-line revenue, sure, but I was taking home less money and working twice as many hours. It’s a math problem that nobody tells you about because they’re too busy selling you courses on ‘how to build a 7-figure agency.’ You don’t want a 7-figure agency. You want a 7-figure bank account. Those are very different things.
I might be wrong about the fractional COO trend—maybe they actually help—but from what I’ve seen, they just come in and make spreadsheets about the work instead of doing the work. It’s just more bloat. If you can’t run your business from a single iPad while sitting on a beach, you haven’t scaled; you’ve just built a very expensive hobby.
Trying to scale by hiring is like trying to fix a leaky boat by building a bigger boat around it. You’re still taking on water; you just have more wood to rot. Stop hiring. Start automating. Start saying no.
I still think about that day in Seattle sometimes. I wonder what Mark is doing. I hope he’s working for someone who actually knows how to run a team, because back then, I certainly didn’t. I was just obsessed with the idea of ‘more.’ Now, I’m obsessed with ‘better.’ I don’t know if I’ll ever want to manage more than two people again. Is that a lack of ambition? Or is it just finally being smart enough to know what I’m bad at?