Take your median monthly profit and subtract the full monthly cost of the hire: wage, taxes, and the software seat or gear that rides along. What's left is your cushion. Then re-run the same subtraction on your worst honest month. If the cushion survives the worst month, the hire is affordable. If it survives only the median, the hire is affordable on average, and average is where hiring mistakes live.
A worked example
Kiln & Co. clears a median $3,050 a month with a worst honest month of $2,050. A part-time hire at $1,400 all-in leaves a $1,650 cushion in a normal month, and $650 in a bad one. That's a real yes, and you can see the floor. If the worst month had been $1,200, the same hire would be a coin flip wearing a yes costume.
Three more things to check
- Ramp time is a cost. Budget 4 to 8 weeks where the hire costs full price and produces half value. Your cushion pays for that gap.
- Revenue swing belongs in the test. If your months swing 30%, stress the cushion at median minus 30%, as well as at the historical worst.
- Rehearse it before you sign it. Stack the hire against your actual history: how many of your last 12 months would have carried it? Eight of twelve is a different answer than twelve of twelve, and both are better known in advance.
The hire calculator runs this exact test with your numbers.
Common questions
Should I hire before or after the growth?
A hire is affordable when your existing months can carry it, and strategic when you're already turning away the work it would do. You want both to be true at once.
What about contractors instead?
Same math, better exit. A contractor converts the fixed cost into a variable one, which effectively raises your worst-month cushion in exchange for a higher hourly price.