Startup Mondays: When Should You Hire Your First Employee?

Growing a startup eventually changes how much one person can realistically manage. What started with a few customers and manageable day-to-day tasks can quickly become more demanding. There are customers to respond to, accounts to keep up with and new business to chase. At some point, the founder becomes the person responsible for almost everything.

But being busy does not automatically mean the business is ready to hire. A salary is a monthly commitment, and a wrong hire can put pressure on a young business. The decision should come down to the work that needs to be done, the money available and whether bringing someone in will actually help the business move forward.

Here are four things to consider before making your first hire.

Look at What Is Taking Your Time

Start with your own workload. What are you spending most of your time doing? If you are spending hours every week on administration, customer enquiries, bookkeeping or other repetitive tasks, those responsibilities may be taking you away from work that only you can do. The first hire does not necessarily need to take over your biggest task. They should take responsibility for work that is important but does not require the founder to handle it personally.

Hire for a Specific Problem

It is easy to think about hiring in terms of job titles. A better starting point is the problem you need to solve. If accounts are growing but orders are becoming difficult to manage, you may need someone to handle operations. If you have customers but struggle to keep up with marketing, that may be where the first hire should sit. Be specific about what you expect the person to take off your plate. If you cannot explain what the employee will be responsible for, you may not be ready to hire for that role.

Know What the Hire Will Cost

Before making an offer, work out the full cost of bringing someone into the business. Salary is the obvious expense, but there may also be equipment, software, recruitment costs, taxes and other employment-related costs. Put those numbers against your current revenue and cash position. A business does not have to be highly profitable before hiring, but the founder should know how the additional monthly cost will affect cash flow.

Do Not Hire Because You Are Overwhelmed

There is a difference between needing help and simply having a difficult few months. If you are dealing with a temporary increase in work, a freelancer or contractor may be enough. If the same workload keeps coming back and prevents you from focusing on sales, customers or product development, a permanent employee may make more sense. The first hire should solve a problem that is likely to remain after the person joins.

Founder’s Tip

Do not hire someone simply because you have too much to do. Look at what is holding the business back and decide whether another person can make a meaningful difference. A good first hire should give the founder more time to work on the parts of the business that drive revenue and growth.

Your Action Plan

This week, write down everything you spend time on in the business. Mark the tasks that someone else could handle and then look at which of those tasks takes up the most time. Work out what it would cost to hire someone to take over that work. Then compare that cost with what you could realistically gain from having more time for customers, sales, product development or other priorities. If the numbers make sense and the need is consistent, it may be time to start looking for your first employee.

Read More about Startup Mondays HERE