From Solo-Preneur to Manager-Preneur

Becoming a Manager

In Audience Ops’ first year, we’ve grown from a team of 1 to 17—6 full-time employees and 11 part-timers who we still very much consider team members in every sense of the word.

As you might imagine, there’s one personal entrepreneurial skill I’ve been forced to focus on this year:

Management.

It’s been several years since I started managing teammates in one form or another.  But now that I have several “levels” of team management under my belt, I feel it’s a good time to write my guide to what I’ve learned.

Today’s article is my answer to one of the top questions I hear from readers.  It typically goes something like this:

“How did you go from working solo to managing a team and when did you hire and manage your first employee?”

I’ll cut straight to my answer:

There is no quick answer.

Hiring your first employee is one small step in a multi-level progression you’ll take from being a solo-preneur doing everything yourself to a manager-preneur, building a team to execute your entrepreneurial vision.

Bonus Download: See my hiring history since 2008

A Self-Taught Manager’s Roadmap

This guide assumes you’re taking a similar path to the one I’ve taken:  You started as a freelancer / consultant, perhaps built up your consultancy, then transitioned to a product business.  At every step, you find the need to bring on help and talent, often wondering how to take those next steps in growing a team.

I believe most of what it takes to be a great manager can only be self-taught. Meaning, what works for one person won’t necessarily work for another.  You must figure out and embrace your own personal style at every level of managing a team.

That’s not to say you shouldn’t learn from great (and horrible) managers you’ve come in contact with.  I certainly have drawn lessons from some of my former managers when I was employed.  Some were excellent, highly efficient, and they facilitated some of my and my teammate’s best work.  Others, were, well… not that.  And it showed in both my and my team’s output.  There are always bits and pieces to take away from experiences like these and apply in your own business, as I have.

This guide on becoming a manager is built on my experience as a manager.  I broke it into 6 distinct “levels”:

  • Level 0:  Managing Sub-contractors
  • Level 1:  Managing Part-Time Assistants
  • Level 2:  Managing Part-Time “Creative” People
  • Level 3:  Managing Full-Time Employees
  • Level 4:  Managing Managers & Creative Leads
  • Level 5:  Managing Executives

You may not experience every one of these levels in the same order I did, but if you’re self-funded and building your business organically as I have, chances are you’ll see a similar progression.

For each level, I’ll describe what it looks like.  I’ll offer some prerequisites—things that should be established before this level of management comes into play. And I’ll cover the essential skills you’ll develop while managing at each level.

Ready?  Let’s dig in.

Level 0:  Managing Sub-Contractors

I call this Level “0”, not “1” because this level typically happens before you have a product business.  I started my self-employed career as a freelance web designer, and I built my consultancy for several years before I transitioned to product businesses.

It was during my freelance/consultancy days that I cut my teeth on my very first managerial experience:  I brought in project-based sub-contractors to help me execute parts of my client work.  This served as an excellent preview of what it’s like to manage a team, and it helped me learn basic but essential skills in owning a project that has multiple people delivering assets.

The great thing about starting with sub-contractors—especially when you’re consulting—is a lot of the big question marks are answered for you right from the start: You know exactly how much you can budget and exactly what you need from a sub-contractor. These are short-term engagements with a defined start and finish, which allows you to get a taste for managing without a long-term commitment.

Prerequisites:

  • You’ve sold client projects with large enough budgets to allow room to bring on sub-contractors.
  • Your projects have the scope necessary for 2 or more different creative professionals to execute.  For example, a designer, a developer, and a copywriter.

Essential management skills you’ll pick up at this level:

  • Budgeting and profit margin.
    You’ll figure out how to define your budget, what your profit is, and how sustainable this model is over the long-term.
  • Managing deliverables and deadlines.
    You’ve mastered the deliverables game as a solo freelancer, but managing someone else’s is an entirely different beast.  You’ll figure out how to communicate expectations, track progress, and how to deal when sub-contractor’s don’t deliver.

Level 1:  Managing a Part-Time Assistant

This next level is really the first level of management once you’ve launched a product or a productized service business.

I call this an “Assistant” role, but I don’t necessarily mean this is their literal job title.  By “assistant”, I’m refering to anyone who takes on tasks that you’ve been doing yourself for a while, and have defined a trainable process for someone to take over.  An assistant-type role doesn’t necessarily bring skills or talents that you wouldn’t have been able to produce yourself.  But they do relieve you of day-to-day “busy work”, which can open up new bandwidth for you to push new things forward.

Examples of a part-time assistant role would be tier-1 customer support, an administrative virtual assistant, a bookkeeper, perhaps a quality assurance checker.

Don’t let the “low level” of this role fool you.  If your business isn’t truly ready to have someone in this role, it will turn into a huge waste of time and money, resulting in a big setback for your business (and you personally, as a manager).  It took me two failed VA hires to realize the problem wasn’t the people I hired, it was the fact that my business didn’t have the repeatable need for an ongoing assistant.

Prerequisites:

  • You’ve identified a few repeatable (think: happens every day or every week like clockwork) tasks that can make up this person’s responsibilities.
  • You’ve started to document step-by-step procedures to train this person on how to take care of these ongoing tasks.

Management skills you’ll pick up:

  • How to identify tasks that you can (and should) delegate.
  • How to document processes in a standard, optimized way.
  • Basic employee management routines such as training, payroll, regular meetings, evaluating progress, etc.

Level 2:  Managing a Part-Time “Creative” Person

As you move up the management food chain and your business grows, there should come a point when you seek to bring on creative people to your team.

Again, I don’t mean “Creative” in a literal job-description sense.  I’m referring to any teammate who produces new assets for your business.  Examples might include designers (produces visual assets), developers (produces code & functionality), writer (produces content), marketing (produces leads), sales (produces customers).

A creative person can still serve in a part-time capacity.  If your need is only temporary (for example, you’re launching a bi-annual redesign of your website), then this isn’t much different than the sub-contractor hire I touched on earlier. But most product businesses develop an ongoing need for creative work, such as a designer or front-end developer. The ongoing position is more along the lines of what I’m focusing on here.

Prerequisites:

  • Revenue (or funding) to support the cost of creative talent, which tend to cost more than an assistant-level person.
  • Identifiable and ongoing need for this person or an ongoing value they can bring to the business.

Management skills you’ll pick up:

  • Managing creative output without micromanaging.
  • Establishing and managing a creative process.

Level 3:  Managing Full-Time Employees

At this level, you reach a scary decision:

Do you hire more part-time employees to cover the growing demands of the workload, or do you convert your part-time contractors into full-time employees?

Hiring more part-timers is the easier, simpler option.  You’ve successfully done it before, so why not just double down and hire more people this way?  Technically, this can cover your workload needs.  But it might result in an over-grown team. Too many people, all who’s focus is split in many directions.  Plus, it’s common for part-time contractors/freelancers to suddenly take other gigs and leave you in a constant hiring mode.

For the long-term health and your own personal sanity as a manager, you’re better off with a few full-time employees than many part-time freelancers.  But committing to your first full-time employee is scary!  I know it.  Although I’ve had full-time teammates in years past, this year was the first time I brought on full-time W2 workers here in the US.  Something about that step felt bigger, more complex, and came with more responsibility than any other hire I’ve made before. Some of this is natural entrepreneurial nerves, but some is reality.

Prerequisites:

  • Your business absolutely needs this person.
    And you need them onboard in a full-time capacity in order for your business to breathe.  In other words, not hiring them on full-time will actually cost your business more money because production or growth would stall.
  • You feel confident in the person.
    My best advice is to start them in a part-time role for a while before promoting them to full-time.
  • You feel confident (enough) in your ability as a manager.
    You’ve passed the previous levels I described above.

Management skills you’ll pick up:

  • You’ll figure out HR
    This is a massive administrative time-suck (at least it is here in the US) when you make your very first hire US-based W2 hire.  Employment taxes, workers compensation, registering your business to pay taxes in other states (if you’re hiring remotely), setting up a payroll system (I use and love Gusto — that’s my referral link), updates to your bookkeeping and accounting processes… Ugh!  The good news is it gets easier with your 2nd hire and onward since most of the heavy lifting is done with your first.
  • Company Culture
    This can really begin in previous levels, especially if your part-timers work with you on a daily, ongoing basis.  But at this level, you’re at least starting to think about how happy your teammates are, how engaged they are, how well they work together, and how “fun” is it to work at your company.

Level 4:  Managing Managers

As your team grows in size, there comes a point when you can’t possibly manage everyone and everything yourself.  You have to develop a management structure.

The conventional wisdom on how many direct reports a manager should have ranges anywhere from 6 to 10 to 15.  I think it really depends on the type of company and your personal style.  For example, according to Business Insider, when Tim Cook took over as CEO of Apple, the number of direct reports to the CEO increased from 9 to 17.

If you’re running a small, lean startup, and if you’re using the productized service model like I am, then there’s another factor to take into account here:  Which management duties do you want to have?

Even if your team is still relatively small, there might be daily or weekly tasks such as checking in on progress or keeping clients in the loop, which you don’t really want to (and shouldn’t be) handling yourself.  For example, in my business, Audience Ops, I’ve built a group of Project Managers to oversee our day-to-day production line of content, which frees me up to focus on improving our processes and building new things.

Another question that comes into play at this level is deciding whether to promote someone into a management role or to bring someone new directly into a management position. I have found it can work (and not work) in both scenarios. Your super talented developer might not make a great CTO. Your rainmaker sales person might not be as effective in a sales management position. Someone with strong communication and organizational skills will probably excel in a management role, so it might be best to hire someone directly when this need arises.

I’d lump one more type of hire in this level:  Creative Lead.  While some of your creative asset-producers may not be best suited for a promotion into management, they might be better suited to become a creative lead.  Think creative director, product owner, lead developer, etc.  This person works on the mission-critical components and helps drive strategic and creative decisions.

I was fascinated to read Rand Fishkin’s dual-track system for employee advancement at Moz, where some can take the “Individual Contributor” track and others can take the “People Wrangler” track.

Prerequisites:

  • Your team has grown to a size that can’t be managed by one person.
  • Tasks in your business that need to be managed shouldn’t be managed by you as the founder.

Management skills you’ll pick up:

  • A more nuanced approach to identifying and recruiting talent—specifically, identifying who will make an effective manager and why.
  • You’ll learn to coach key employees.  I don’t recommend dictating that managers manage exactly the same way you would.  But you should seek ways to coach and support them in being successful in their management style.

Level 5:  Managing Executives

Managing business partners and “C-Level” executives at a large company.  I’ll be honest, I don’t have a lot to say at this level because I don’t have a ton of experience here.

Although I tend to work best as the sole founder/owner of my business, I have worked in partnerships before and I do still take on side project collaborations with partners.  So I can speak a bit about working with and managing partners.

I think there are two key tips to making it work:

First, you must recognize you’re on equal footing.  Even if, technically, your ownership shares may not be equal, you must treat your partners, and your relationship, with an “equal” level of authority.  In other words, unlike managing employees under you, where you generally have the final say on things, partners should share that final say.  Not all decisions will be yours and you have to be OK with that.

My second tip here is to make sure you and your partners compliment one another in terms of the skills and experience you bring to the table. There are very few successful partnerships between two highly technical programmers. More often it’s a programmer and a designer, or a biz dev marketing person and a CTO, or a similar matching.  No matter how well you may work together, too much overlap won’t do anyone (or your business) any good.

Prerequisites:

  • You enter into a founding partnership with someone who compliments your skill set and shares your vision.
  • You promote a key employee to equity-holding position because you all agree on the need to take this step.

Management skills you’ll pick up:

  • Collaboration with higher stakes.
    Unlike a simple collaboration with a co-worker, you’re co-owners of big decisions that you’ll make together.  You’ll learn how to build a new level of trust.
  • Defining ownership domains.
    You and your partners should each “own” different domains within the business.  For example, the CTO should own all technology-related decisions while the CEO owns the strategic direction of the company.

Overcoming The Fear of Management

I’ll conclude with this:  Don’t let “Becoming a Manager” prevent you from starting a business that’s bigger than yourself.

Managing people can actually be truly rewarding and enjoyable—Yes, even if you come from a technical/creative background like I do.

I write and talk a lot about “learning by doing” and growing as an entrepreneur. There’s no area where this rings true more than when it comes to managing people and growing as a manager. And like most things, the way forward is to take it one level at a time.

Bonus Download: See my hiring history since 2008
  • Thanks for sharing your journey and insights Brian. Great job moving up the ladder of management as an entrepreneur! Growing as a person and growing the economy too. Booyah!

  • Super article Brian, thanks for being so transparent with your own process. I’m curious why you decided to go with Gusto rather than QB or Xero’s built-in payroll, or something lower-cost like Wave.

    • Thanks Ryan!

      Well, Gusto is really a different tool than those… It’s not a bookkeeping tool (I actually use Xero for bookkeeping). I suppose those tools offer payroll options, but they’re not ideal for this imo.

      Gusto is good because I have a mix of contractors and full-time W2 employees. But aside from actually running payroll, Gusto gets me set up for filing payroll taxes in all different states, etc. Huge headache-saver.

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