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    When to Hire Your First Employee

    April 27, 2023

    As a small business owner, knowing when to add an extra set of hands can be tricky. Hiring an employee too early can create cash flow constraints and hinder growth, but waiting too long can create undue stress and pressure on you as a sole proprietor. Here are some tips for figuring out when it’s the right time to hire your first employee.

    When-to-Hire-Your-First-Employee-DreamSpring-blog-post

    The Relationship Between Your First Hire and Customers

    If you find yourself becoming increasingly burnt out, rejecting quality projects, or saying “no” to interested clients or new business, it may be time to consider adding an employee. Customer satisfaction is another critical component of knowing when to hire. If you cannot provide strong customer service yourself and your client experience is deteriorating, you may want to seek support before your customers seek alternatives and end their relationship with your business. Questions to ask yourself include: Is the quality of my product or service impacted? Do I have longer wait times than in the past? Am I providing good customer service? 

    Dollars and Sense 

    A key step in hiring your first employee is knowing where you need help. Do you want someone working in sales or accounting? Should you get help with marketing or production of your goods or services? Knowing what role your new employee will play in your small business will help you build a job description, shape interview questions, and have clarity around what your needs truly are.

    Running a successful small business depends on routinely tracking your financials, submitting your taxes on time, managing your accounts receivable and payable, and executing compliance tasks. If you’re falling behind on your business operations and administration, it may be time to hire someone to support you. Software and accountants can provide assistance too, but if you’re struggling, make sure you seek help.

    You should also make sure that you can afford your new employee. Conducting a review of similar positions at other companies will provide guidance as to the market rate of this type of employee. In addition to the salary, you’ll want to ensure that you bundle in all related costs, including taxes, company vehicles, office supplies and technology, and any other expenses related to the new hire.

    It’s important to identify specific tasks you need support with and estimate how many hours per week you anticipate those tasks will require. This will give you a clear understanding of the scope of work and help you determine whether you need a part-time or full-time employee. Start by making a list of all the tasks you currently handle yourself and then determine which ones can be delegated to a new hire.

    What to Look For

    When you’re seeking out the best candidate for your needs, make sure to find someone who shares your values, understands the role and your business, and demonstrates the flexibility you need. You’ll be working closely with your first employee, and it is critical that they align with your objectives.

    Consider each candidate’s experience, skillset, and attitude. During the interview process, be sure to ask questions that will assess any candidate’s alignment with your values and business needs. Drafting interview questions in advance and embracing consistency in your interview approach will help you make informed decisions and hire the best person for the job.

    Conclusion

    We know that this is a big step for your small business and we are excited for you! Remember that finding the right first employee (whether part-time or full-time) is about more than just filling a role — it's about finding a partner that helps you achieve your business goals.

    If you have questions, you can find additional guidance through our resource partners.