The startup process can be exciting and extremely rewarding, but there may come a time when you face the decision of seeking additional help. Before deciding to hire your first employee, you should be certain it will benefit your business. Here’s how to know if you’re ready.
Questions to ask yourself before hiring your first employee
If you’re considering hiring your first employee, here are some questions to ask yourself before doing so:
- Can I afford to hire an employee with my current budget? There are a lot of factors that need to be considered before bringing someone on board to help you. Will you have enough income to cover costs of inventory, pay taxes and insurance, as well as to pay the employee? Will you need to buy supplies, rent out a larger space, etc.?
- Do I have enough work to delegate to an employee? Keep in mind that hiring an employee will redirect money toward paying them and paying for any supplies or space they need. If there isn’t enough work for an employee, it won’t be worth it to hire someone.
- Am I able to keep up with deadlines on my own? Having someone else to help out can benefit you in several ways. You can delegate tasks to increase productivity and efficiency, and you can focus on growing your business while your employee works on maintenance-related work.
- Do I lack certain business expertise that's necessary for success? To ensure a well-rounded business, it may be a smart move to hire someone who complements your strengths. They can offer expertise in areas you may not be skilled in, which can help bring in customers you may not have been able to reach before.
[Read more: Why You Should Consider Hiring in 2021]
Working with contractors is a great way to test out whether or not having a long-term employee will work out.
When to hire your first employee
These three common situations will help you decide the right time for hiring your first employee.
When an employee will generate or save money for your business
Hiring for the first time is a big financial decision. An employee can affect the influx of profit by bringing in new customers, increasing productivity and marketing products well. They can also save money by using technology instead of outdated methods, improving efficiency and using their talents to add value to the business. If you find someone that fits the criteria you’re looking for and has the potential to bring in or save more money, they’re worth bringing onto your team.
When you have enough tasks for a specific role
One of the most important considerations before hiring someone is ensuring there is enough work to be done. If an employee runs out of tasks to complete, it can be a waste of both time and money to hire them. It might be helpful to create a list of expectations and tasks you have for the role, an estimate of how long each task should take and supplies or resources that will be needed to complete said tasks.
When you need more than what a contract worker can offer you
Working with contractors is a great way to test out whether or not having a long-term employee will work out. They can be hired for a certain period of time or hired per project, which can be good for business owners who need temporary assistance. However, if you notice that your business is growing quickly and needs more than what a contractor can offer, it is time to bring someone on board for the long haul.
[Read more: How to Make Smart Hiring Decisions]
How to hire your first employee
When deciding to bring in a new hire, you need to create a plan for how you will pay your employee. You’ll want to obtain an Employer Identification Number and find out which tax IDs you need. Once you determine what type of employee you want (contractor or full-time), you can determine tax withholding, compensation plans and which tax forms need to be filed. When going through the hiring process, you’ll also need to follow federal and state labor laws to stay legally compliant. Additional things to consider are employee benefits and incentive programs. Once you hire someone, you’ll want to make sure you find ways to motivate them and help them grow.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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