When to Hire Your First Employee

Hiring your first employee is one of the biggest jumps a small business makes. Do it too early and payroll outruns revenue; do it too late and you become the bottleneck that caps your own growth. The trick is reading the right signals.

The signals you are ready

• You are consistently turning away work, not just having one busy week.
• You are spending hours on tasks well below your best use of time.
• The extra revenue a hire would free you to earn comfortably exceeds their fully-loaded cost.

Count the real cost

An employee costs more than their wage. Payroll taxes, benefits, equipment, software, and the time to train and manage them all add up — often well above base pay. Budget for the fully-loaded figure, and for a ramp-up period before they are fully productive.

Consider the in-between steps

You do not have to jump straight to a full-time salaried hire. Contractors, part-time help, or freelancers let you add capacity with less fixed cost and commitment while you confirm the demand is durable.

Hire for the gap, not a clone

The instinct is to hire someone like you. Usually the better move is to hire for the work you are worst at or least want to do, so you can concentrate on what only you can do. Write down the specific tasks first; the job description should follow the work, not the other way around.

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