My company does both consulting and products. In the past, I have been able to hire sub-contractors on an as-needed (per project) basis when my workload increased (have large client projects, launching a new product etc.). I also handle a lot of the creative/production work myself. Now I want to grow my company and build a small team of full-time employees. My dream is to build a cohesive, collaborative team that produces amazing work together. Contractors work out great for short bursts of work, but not ideal for a longterm growth strategy. My dilemma: I don't know that I have the consistent revenue to support FT salaries quite yet. My products alone bring in barely enough to pay my own (small) salary. My consulting work has lots of ups and downs and doesn't have a predictable revenue stream. I think the answer is to refine my marketing strategy to make my consulting work more predictable (develop the flywheel that brings new clients in consistently). I also need to work on growing the product income. But it's hard (and slow) doing these things without a team around me. So it's a chicken or the egg question. I've been wrestling with this hurdle for a couple years now, thinking at some point the revenue/predictability issue will be resolved, signaling it's time to hire and grow. But maybe I'll never truly be "ready" to hire until after it's done? What am I missing? Would I benefit from speaking with a business coach (and what specific type of coach)? Are there any books you'd recommend? I think I'm going to give E-Myth a 2nd read soon...
Jason's answer is right-on. A rule of thumb that I've used when considering the big move from 1099ers to employees is if the employee's effectiveness in year one could recoup a 3x return on the investment of their salary. In other words, does the employee free you up to bring in more consulting clients, or generate sufficient product sales to justify their salary?
The issue you raise of not having a predictable revenue stream as a consultant is exactly what led to the creation of the Seal the Deal Success Kit, which we created for coaches, but works as well for any consultant who wants to level out the ups and downs of the unreliable in-flow of revenues. http://sealthedealsuccesskit.com/ It's essentially a fully-stocked kitchen of information about essential mindsets for integrating leveraged action across three domains simultaneously: Networking, Marketing, and Sales. Do you feel you have a sustainable system for generating new consulting work/ revenue?
A business coach could make sense for you...there's a great article out recently citing Stanford research into the value of having a coach for your business. Here's that article. http://www.suzipomerantz.com/stanford-executive-coaching-study-reveals-most-ceos-want-coaching/
Books I'd recommend include: Seal the Deal (by me), Upside Down Selling (by Ian Altman), Beyond Referrals (by Bill Cates), Made to Stick (Heath brothers), and Dynamic Laws of Prosperity (Catherine Ponder).
Hope this is somewhat helpful!