7 Signs You're Ready to Hire Your First Employee

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Many entrepreneurs start their business as a one-man operation. But if all goes well, your operations soon double or triple, making it nearly impossible to do everything by yourself. If you want to increase your revenue and profits you may need to get help to manage the logistics of the increased orders.

But, hiring extra employees too early could lead to payroll costs that your business may be unable to support. This makes it hard to know the right time for hiring your first employee.

We have made it easy. Read on for 7 clear signs that you're ready to hire your first employee.

1. Your Customer Service Needs Improvement

Being too busy to give your desired level of customer service to clients is a clear sign that you need an employee. Missing deadlines or ignoring and neglecting your customers will make them walk away to your competitors. Not only that, but they may also tell others about your poor service.

In today’s business climate, bad customer service can destroy your reputation and bankrupt your business. Customer service is one of the easier tasks to delegate to new employees.

When you are ready to hire, get a pleasant individual that can answer phone, email and internet inquiries. They can also help with basic troubleshooting and fielding customer complaints. Hiring someone will free you to concentrate on the more technical aspects of your business. 

2. There is Enough Work to Keep an Extra Person Busy

If you are working 16-hour shifts daily and your projections show a steady flow of clients for at least the next year, then you are ready to hire. But if you are only going through a busy season then it would be better to hire a temporary worker or seasonal contractor. 

For example, busy periods as a result of the Christmas holidays is not a reason to hire a new employee. If you do, you may find yourself unable to pay for their January salary. 

Before you hire your first employee ask yourself if there are enough tasks to fill a realistic job description. If you have a bit of work in social media marketing, a little work in administration, sales, etc. it may make better sense to hire freelancers to do the tasks. 

It will be hard to find someone that has a varied enough skillset to fulfill all the tasks. Also, only hire someone if they will be working at tasks that will be bringing in revenue. For example, hiring a skilled salesperson can pay for itself if the employee brings in new clients. 

3. You Have the Time, Ability, and Resources to Conduct a Thorough Recruitment

Hiring your first employee will be a time-consuming process that will need funds and patience. You will first need to educate yourself on all your legal responsibilities as an employer e.g. provision of a safe work environment, insurance, work contract, etc. 

You then have to draft a comprehensive job description and send out advertisements to recruit the right person. Once you hire the person you have to spend time training and onboarding them. You also have to invest in payroll software or look for a free paystub generator.

If you don’t have the time, money, or know-how for the recruitment process then it is best to hire a contractor from a staffing agency. Rushing the process and hiring the wrong person can be very costly. 

4. You Need a Specialized Skill

You may need to hire your first employee if you find yourself in need of specialized skills that you don’t have. For example, you may land a new client that requires you to perform tasks that you aren’t qualified to do. 

You may have started a business because you saw a need in the market but you may not have all the skills advertised by your business. For example, if you start a spa and you don’t know how to do massages, you may need to hire massage therapists. You may get away with paying specialists per job done until you can afford to hire them on a full-time basis. 

5. You Have to Turn Clients Away

Another sure sign that you are ready to hire your first employee is if you are turning away work. 

Acquiring a customer costs much more than retaining them so it makes little business sense to turn away clients. Rather than losing customers to your competition, hire and train an employee that will help you scale your business. 

Also, if you are too busy with current projects that you don’t have time to look for new clients then you may need to hire help. Growing your business should be your priority. This way you always have a cushion of new clients in case business from your current clients dries up. 

6. You Don’t Have Time For Weekends or Holidays

You know it is time to hire help if you are working 7 days a week, 365 days a year. Startup businesses are demanding but you should be able to take at least one day off a week and an annual vacation. 

Your productivity and strategic thinking will suffer if you don’t take breaks away from your business.

7. You're Neglecting Your Paperwork

If you find yourself unable to do your accounting, taxes, and other necessary paperwork, then you need to hire an employee. The employee can either take on the paperwork or can take up some of your other tasks. This gives you free time to complete your books.

Your financials are the livelihood of your business so you shouldn't neglect them. 

Know When You're Ready to Hire

The decision on when to hire your first employee should not be a result of stress due to overwork. It should be something that you have deeply thought about. It should even be in your business plan before you open your doors for business. 

Hiring your first employee as part of a bigger strategy for growth and expansion will lead to fewer regrets. If you hire on an ad-hoc basis you may use up your cash flow, causing your startup to fail.

Knowing when you're ready to hire employees before things get too hectic can save you a lot of time and frustration. For more hiring tips, visit the HR and careers section of the Bootstrap Business Blog.

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