I was on vacation. I was thinking about our law firm and I was, as usual, reading a business book.

The book started me thinking about shifting some personnel around to new positions. I got excited. I had a great idea about moving several people to new roles in which they had no experience.

It seemed like a great idea as I sat on my towel, under a palm tree, listening to the waves crash.

I don’t think I need to tell you how that decision turned out.

Fast forward to right now. It’s January. We’ve only had two work days. But what a two days it’s been. The new clients are lined up – they’re throwing money at us. It’s crazy and it’s only been 48 hours since we got back to work.

I suspect the rest of the month will be good (not as good as Monday and Tuesday), but good.

Here’s what happens to me. I get excited. My brain sees the revenues pouring in. I make new projections based on short term income and I decide to hire more people to handle the work. I add personnel when we’re booming and then we’re overstaffed when things slow down. I’ve done it before. The fallout is horrible. I’ve got to stop.

Why do I do it? Because I’m giddy, I’m optimistic. Are these good decisions? Of course not. These can be seriously bad payroll decisions. Payroll decisions are our biggest decisions. Making a bad call on payroll impacts everything and it can ruin your year.

Hiring needlessly is a big mistake. I’m writing this article in hopes that I’ll remind myself not to repeat my mistakes (and maybe help you along the way).

I need to repeat to myself, over and over, the following words –

Don’t hire the people. Don’t hire the people.

That’s what I need to remember.

We need to stretch out the work and work a little harder for the next few months without dramatically expanding our payroll.

When I hire people based on my giddy January projections we end up killing our profitability when the work slows down.

And for us, the impact of a slowdown is sudden since we only bill with fixed fees. Those of you that still bill hourly (and there are fewer and fewer of you) are able to mask the impact of the seasonality of our work. But it’s no less of a problem, it just isn’t always as obvious.

So, bottom line,  don’t make decisions, especially big decisions while you’re on vacation or during January. Wait until things calm down and you aren’t excited.

As an aside, in an effort to head off a confrontation with my wife, let me say that our decision to get married, twenty years ago, while on vacation in Hawaii, was a good decision and I was obviously thinking clearly that day.