Hiring your first employee is one of the most fulfilling experiences of owning your practice. But getting your first hire is also nerve-wracking! You want to find the best person for the job, but you also, likely, have a “bootstrapping” budget.
Hiring your first employee means answering questions like:
- How do I know when/if I’m ready to hire someone?
- Can I afford to hire someone?
- How do I find someone that’s a good fit?
- Should I hire for a full-time position or contract work?
- What kind of paperwork do I need to have?
We’ve provided answer to each of these within AANE – in our blog, our resource center, and our Facebook group. But today’s article is here to address that first big, hairy, scary question:
“How can I afford my first hire when cash is tight?”
Let’s talk about some creative ways you can hire new employees and how you should think about the hiring process…
When to Expect an ROI
First and foremost, you have to realize that hiring employees should be an investment in your practice, not an expense. And with any investment, you shouldn’t expect an ROI (return on investment) immediately. It might take a few months or even a year in some cases.
Here are a few different ways employees provide an ROI:
- Saving you time so that you can grow the business
- Growing your practice’s capacity for patients – and therefore, income
- Expanding your practice’s services and/or service area
- Decreasing churn rate; improving patient retention
- (for insurance-based practices) Increasing RVUs and higher value RVUs
- Actively bringing in patients
- Providing efficiency to processes, which saves time, money, and resources
Your ROI will depend on your practice’s business model. For example, practices that are fee-for-service generate revenue per patient visit. But in a direct pay model, revenue comes from bringing patients/members to your practice.
BONUS TIP: Always hire someone before you think you need them. If you don’t, the growth of your practice will stall. Practice hiring ahead of the curve.
Important Conversations To Have With New Hires
Finding the right fit for your practice is absolutely key. But when you’re starting, you probably can’t afford the going market rate (or higher) for a full-time employee. But that shouldn’t stop you from finding ways to make it a win/win for you both!
How do you make it a win/win for you and your employee? By having conversations with your candidate about what’s important to them.
Let’s assume you’ve found a promising candidate for the position. During the interview process, they’ll learn about your needs and what you’re looking for. And you should do the same.
Everyone has different job needs, depending on their stage in life. A mom of 4 kids might value flexible hours more than working full-time. On the other hand, a recent graduate might want longer hours because they want to pay off student loans.
Be sure to ALWAYS have compensation conversations in person. Schedule a meeting, take them out to lunch, or hop on a Zoom or call. The personal connection is vital to these conversations.
Ask about:
- What their capacity is for weekly working hours – now and in the future?
- Do they value flexibility or routine?
- What are their compensation requirements?
- And, beyond money, what else is important to them?
When you’re in start-up mode, you want to know what your potential employee needs to pay their bills – their basic living requirements. Knowing their bottom line – the minimum they need to pay their bills, but doesn’t cause them stress or anxiety – is helpful to know when you’re on a bootstrap budget. But, of course, that’s not entirely kosher to ask. So, one of my favorite questions to find out what they need is “What do you need to be whole?” From there, I can get a sense of where their starting point is.
Don’t worry if their compensation (aka hourly or salary) requirements are higher than you can afford at the moment. That doesn’t mean your conversation should stop. You still have valuable options to offer!
Options in Structuring Compensation for Your First Employee
Trial Periods
When hiring, it’s important to be upfront about what you can and can’t afford.
- “I can’t afford to hire someone full-time right now. I can currently offer 16-20 hours per week. But in 4-6 months, I can afford more.”
- “I can’t afford $70/hour right now, but I can pay $68.”
And just because you can’t afford it right now, doesn’t mean you won’t be able to in the near future.
I’m a big proponent of 90-day trial periods. When your new higher proves that they are able to meet (or even exceed) the job requirements, your practice will grow and you can then pay more after the 90-day trial.
Plus, you can offer bumps in pay based on performance, too! (see the ROI list above)
Revenue Share Options
You might consider offering your first employee a base rate + a percentage of the revenue they generate.
When I started out as a nurse, the doctor I initially worked with took 70% and I took 30% for house visits I did. Personally, I think that wasn’t very fair. I believe I should have taken 60% and her 40% (plus my hourly). But you can make the numbers work for what makes sense for your practice.
Another option is equity, meaning particle ownership in your business. This probably won’t apply to the majority of nurse owners, but it is an option. When offering equity, you need to clearly outline the ownership roles. Offering equity works best when someone is bringing in money or skills you don’t have. Generally speaking, equity percentages range from 0.5% to 5% max.
If you are considering equity, I would offer something that vests over time or is based on specific metrics or benchmarks in performance and/or growth.
Beyond Money. Creative Ideas for Compensation
If the recent “great resignation” has taught us anything, it’s that people value more things than just money. People want a job that can support their lifestyle. And that could look a lot of different ways.
- Flexibility and autonomy are HUGE these days. If your employees can work from home, your practice is more attractive than one that requires them to spend 8-10 hours a day in an office (+ commute time).
- You could offer your employees and their families free healthcare through your practice.
- You also might consider offering to pay for their healthshare membership through your practice. This could also likely be a significant tax write-off for you.
- Paid time off is another big one. You might not be able to do this right away, but then again, maybe you can!
- Personally, I think that providing childcare can be a game-changer. The majority of nurses are moms and if you can cover part or all of their childcare, or even have a childcare employee on staff, MANY nurses would HAPPILY work for you.
- Think about what else you might offer that’s unique and valuable. My husband and I have a vacation home in Tennessee and we let our staff stay there from time to time so they can get a (mostly) free vacation with their families. You, too, might have access to something that offers an added perk to the job.
By the way, we cover all of this and more within our Launch Your Own Practice Course, including what you need when hiring someone under a W2 or 1099, how to find great employees, and every other step involved in starting and owning your own practice.
And if you have any other questions, you’re always welcome to join our free Facebook group. We have an active community of new and veteran nurse owners that are wildly helpful and insightful.
Hiring your first employee doesn’t have to be as scary as it sounds. Remember, you have options. The most important thing is that you communicate with your candidates and work together to find the best win/win situation for you both.
And it’s worth it because being a nurse owner who gets to hire her/his fellow nurses and create a happy work environment is one of the best parts of being an entrepreneurial nurse.
Veronica Pike
FNP-C President & Co-Founder
Veronica co-founded Med2You, a healthcare company based in Austin, Texas that provides primary and psychiatric care to underserved populations with a completely remote care team led by nurse practitioners.
Veronica started her business as a single provider with a mobile “doctor bag,” cellphone and a laptop.
As a family nurse practitioner and entrepreneur who has operated her own practice since 2013, Veronica knows the unique challenges and needs APNs have when navigating the business, legal and regulatory components of starting and operating a thriving healthcare practice.
Now, her mission is to put this knowledge in the hands of other advanced practice nurses so that they can realize their full potential as clinicians, entrepreneurs and leaders in their community.
With her business partner, Griffin Mulcahey, a healthcare regulatory attorney, Veronica has designed the educational programs, resources, and community support network that is the American Academy of Nurse Entrepreneurs (AANE).
Veronica is also a sought-after speaker around the country. She speaks to healthcare entrepreneurs, clinicians, hospitals, and associations – proudly educating and helping the growing community of healthcare entrepreneurs who are giving more options and better care to communities around the country.
Practicing Patient Autonomy Within Your Practice
Patient autonomy has become a buzzword in our industry and it tends to be discussed like a philosophy, but rarely in terms of actual patient interaction. So, today I'd like to share some insights about patient autonomy and how you can approach it in your practice.