Once you hire an employee or assistant to work for you, you will earn a portion of the money that this individual generates. If you hire a second employee, the amount of money that you earn will then be twice as much. It is for this reason that I like to refer to employees as being assets. Regardless of how large a company is, the profits earned by the owners of that company is the amount of money they have left over after paying all their employees.
For example, if you're a a freelance computer programmer with a large client network, and you find that you're having a difficult time completing all the projects, you can hire an assistant programmer in order to help you complete your projects much faster. This assistant can help you write the code that is needed, and then once payment is received for the finished product, you then pay them a portion of the earnings. These earnings can be paid hourly, or they can be paid by salary, but the basic principle remains: the assistant takes the weight off your back while earning you money simultaneously, which means you now have a cash flow producing business.
Many people attempt to hire employees as soon as they become self employed, but we think this is a bad idea. It is much better to spend the requisite amount of time building a client network “before” you hire your first employee. This could be just a few months or a few years. Just as we recommend transitioning from an employee to self employed and then investor, we also recommend a transition from working alone to working with an assistant.
A key thing to remember is that, the more people you have assisting you in the completion of a project, the faster that project will be done, and as we said earlier in this book, the faster you can produce a product or service, the wealthier you will become. For each employee you hire, your income will grow higher, so long as there is a sufficient amount of work available for you and the employees. This is also why we recommend starting alone before hiring people, because once you have a large network of clients, and you know the average amount of work you receive in a week, you can sit down and figure out how many employees you will need, how much you will pay them, etc.