Been running solo for three years now and hitting a wall where I need to either grow or stay small forever.
The math gets weird when you start thinking about hiring people or taking on bigger contracts. Cash flow becomes this whole different beast when you’re not just managing your own income anymore.
Wondering how other contractors wrapped their heads around the financial side before making that jump.
Yeah I just wing it and hope for the best honestly.
The financial side can be tricky. I just focused on what I could handle without extra risk.
Get a line of credit set up before you need it. Banks want to lend money when you don’t need it, not when you’re scrambling. I got mine when business was steady and used it to smooth out those gaps between big payments. Makes hiring way less scary when you know you can cover payroll even if someone pays late. Also helped me take larger jobs that required upfront material costs I couldn’t float on my own.
I stayed solo but took on bigger projects instead of hiring people. Way less risk and headache.
The trick is finding clients who need more work done but don’t care if it takes a bit longer. I just charge more for bigger jobs and spread the timeline out. Still get the growth without payroll stress.
Maybe test the waters with subcontractors first? You can scale up or down based on workload without being stuck with full-time employees.
The jump from solo to having employees changed everything for me. Had to start thinking 3-4 months ahead instead of just month to month.
Biggest thing was building a cash cushion before hiring anyone. I saved up enough to cover 6 months of their salary plus my own expenses. Sounds like overkill but it saved me when a big client paid 60 days late.
Also had to get real about which contracts actually made money. When it was just me, I could take lower paying jobs to fill gaps. With employees, every hour they work needs to cover their wage plus overhead plus profit. Really forces you to be pickier about what work you take.
Started tracking everything in spreadsheets - projected income, fixed costs, variable costs per project. Nothing fancy but it showed me exactly how much runway I had before things got tight.
Three years solo puts you in a tough spot. I get it.
Here’s what I learned when I hit that same wall:
Test with project partners first - Found other solo contractors and we’d bid bigger jobs together. Split the work and risk without the employee commitment.
Track your true hourly rate - Not just what you charge but what you actually make after all expenses. Eye opening when you see some months you’re barely hitting minimum wage.
Map out your worst case - What happens if your biggest client disappears tomorrow? If you can’t survive that scenario, you’re not ready to scale.
The cash flow thing is real. I started asking for bigger deposits on larger projects. Some clients balked but the good ones understood.
Also worth looking at your current client mix. If most of your income comes from 1-2 clients, growing just makes you more vulnerable. Better to diversify first then think about scaling.