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Profit 101 Video #12: Pursuit of Profit Margins - Fractional Hiring

How Fractional hiring can help you achieve 50% profit margins

October 25, 2023

All right, so here we are in pursuit of 50% margins. Today's topic is about hiring, and in particular, the key approach that we used in the past. We had so much success with it that I've now built a company on it: fractional hiring. Why did fractional hiring work for me in the past? Why do I believe startups, and companies at large, should embrace it?

It really comes down to three main advantages with fractional hiring that you can't achieve any other way. I'll highlight them right up front:

Firstly, and perhaps unsurprisingly, is cost. There's a substantial cost benefit with fractional hiring. You can save as much as 40%. I'm not just saying this because of the fractional aspect. I mean, on an hourly equivalent or on a full-time equivalent basis, your costs could be up to 40% less. That's significant.

The second aspect is the ability to evaluate the person's work. One of the biggest risks in hiring is not knowing the quality of their output. To encapsulate this point, let's call it "lower risk."

The third advantage revolves around the applicant pool. It's simply larger. When you can hire individuals who already have a job or have other constraints on their time but are willing to work fractionally, you have access to a broader pool of talent.

So, these were the three facets that we identified. Now, let's delve deeper, starting with cost.

More Posts from the Profit 101 Series

Business Principles

  • Profit 101 Intro
  • How to Start
  • Year 1 - Quit or go All In
  • Minimum Viable Revenue
  • Fail Fast
  • Total Addressable Market (TAM)
  • Pricing & Unit Economics
  • Not all Cofounders Are Created Equal
  • Not all Revenue is Created Equal
  • Tech Debt

Startup Costs Video Series

  • Software
  • Marketing
  • Hosting

Pursuit of Profits

  • How to get 50% Profit Margins, Part 1 Video
  • How to get 50% Profit Margins, Part 2 Video
  • Pursuit of Profit Margins Video - Fractional Hiring
  • Pursuit of Profit Margins Video - Cost Savings
  • Pursuit of Profit Margins Video - De-risking
  • Pursuit of Profit Margins Video - Talent Pool
Back to Profit 101

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