Hiring your first employee is a major step in your new life as a small business owner. The hire comes with all kinds of positive vibes. Having an extra pair of hands to manage the workflow can feel like a huge relief. And besides, bringing on the first member of a team can make your small business seem more like a genuine company and less like a hobby job. No matter how exciting it is to hire your first employee, though, taking a significant decision like that requires a thoughtful approach.
Whom should you hire? What position needs filling? How do you attract the right person? What does it cost to hire a new employee? And when should you bring on your first team member? Once you start a business, you’re a bona fide entrepreneur, and it’s up to you to find out the answers to all these questions, act on them, and own the results.
Here are our top 10 tips for whom to hire as your first employee, how to hire them, and when to bring them on board.
1. Hire your co-founder
Most first-time business owners don’t have a partner to share the load, but that doesn’t have to be the case. You can find someone to help out. Many new entrepreneurs imagine that their co-founder needs to be a friend, sibling, or roommate. Sometimes that’s true.
Many famous business leaders such as Alli Webb and Mark Zuckerberg created their startups with family and friends as cofounders, but it’s not necessary. If you didn’t start out with an entrepreneurial soul mate, you can hire a cofounder instead.
In most cases, in fact, your cofounder is the first hire you should make because this person will help you determine your team’s composition, establish your corporate vision, oversee your employees, and design and manage your product. You can often find good prospects for cofounders through your mentors, on LinkedIn, at professional networking events, or through the Chamber of Commerce. But if you are richer in cash than you are in connections, you may want to advertise the position and work through a recruiting firm to hire your cofounder.
2. Attract complementary skills
Your first employee should possess skills and expertise that complement rather than duplicate your own. The quicker you can hire someone with a skillset that is complementary to yours, the quicker you can scale up that area of your business.
For example, let’s say you sell your product online but you are not an expert at e-commerce retail. In that case, hiring someone to focus on your e-commerce and digital marketing strategy can equip you to grow your business rapidly.
Hiring someone with complementary skills means knowing and owning your own weaknesses since you’ll want to compensate for those particular areas by bringing on board new talent. Many new entrepreneurs struggle with admitting their weaknesses, though. They believe they should present an image of the impeccably prepared, always knowledgeable new business owner. But that approach doesn’t work.
No one can do it all and build a business of any size or scope. That’s why self awareness is key to attracting the right team members.
3. Stay on the right side of the law
Most business owners don’t intend to break employment law, but unfortunately, all too many of them do and then pay the penalties for it. Most of the time, when bosses break laws, it’s just from lack of knowledge, not from any attempt to deceive or defraud the government. But the consequences are the same regardless of your intent. So know the relevant laws.
Make sure you don’t classify a non-exempt employee as exempt, for instance, and don’t try to say a full-time worker is actually a freelancer if you maintain control over them. Also, be sure to abide by your state’s workers’ compensation laws and any other employment regulations lawfully imposed by state or local agencies.
It’s important to pay your employees a fair and legal wage, too. You probably expect to pay at your industry standard for the job, but employment laws sometimes trip up well-meaning entrepreneurs. Service workers, wait staff, and cleaning staff, for instance, must be paid by the hour and not by the piece. Many pizza delivery franchises have recently had to settle massive class action lawsuits with their delivery drivers because the companies failed to meet minimum wage requirements, even though the drivers were often earning more than minimum wage when tips and mileage were figured in.
Don’t go there. Be sure you are ready, willing, and able to pay your employees legally, fairly, and generously.
4. Don’t hire someone just because you’re busy
Brian Casel, an entrepreneur who runs Audience Ops, a productized done-for-you content marketing service, says, “Being busy is not a reason to hire someone. You have to be busy with the right type of tasks….. You must first figure out the strategies and high-level processes that actually produce results. Then, boil those down into daily and weekly tasks that can ultimately be delegated to an employee.”
You may need help because you’re busy, but what are you busy doing? No matter how smart or creative they are, a new employee will not be able to take over your relational and creative tasks. Those activities are uniquely you.
If you’re busy with other things, however, consider what might help you reduce your workload. Automation, for instance, is a great way to limit time spent on repetitive tasks. Hiring freelancers, investing in a virtual assistant, or simply submitting to a more effective time management system may all be more appropriate than hiring an administrative team member full time.
The best team members complement you as equals rather than support you as employees. Spend your time and money creating a full-time team of sharp people who are your equals in their fields.
5. Know exactly what your new employee will be doing after their first day
In the middle of a busy week, most entrepreneurs can rattle a list of several tasks they would like to hand off to a helpful colleague. When you actually have to keep someone busy 40 hours a week for 48 weeks a year, though, filling time can prove more challenging than you might have thought.
Underworked employees grow bored, and bored employees quit. If you don’t have enough work to keep someone busy, you might consider either hiring a fractional employee or relying on a trusted freelancer.
In most cases, however, you probably have the workload to consider bringing someone on. You just need to make sure you list your employee’s tasks before you ever write their job description, determine which tasks are repeatable, and make sure those tasks are ongoing. If the majority of your new employee’s job description looks like one-off activities, consider whether you might really need a mentor, a freelancer, or a partner instead of a full-time staff member in that role.
6. Hire someone before you start turning down work
When should you hire your first employee? A good rule of thumb is: hire someone before you lose business because you trying to produce great results while you are understaffed. Turning down interested clients is a top money-losing strategy. You don’t want to implement it. Instead, hire someone to help you before you have to say no to well-paying work.
As internet marketing guru Neil Patel says, “You won’t even have a chance to retain customers if you turn them away from the start. These customers will go to your competitors and form relationships with them instead of you. Feeding your competition new customers will put you out of business.” If you have turned down a potential customer because you are too understaffed to serve them, it’s time to scale up.
7. Hire a new employee when you spot a new revenue source
Entrepreneurs have a natural eye to spot new ways to generate revenue. These potential sources of income might help expand the customer base, help you become more competitive in the marketplace, or offer new solutions to your existing clients.
New revenue streams can provide sustaining, refreshing opportunities that help small businesses maintain or grow their market share. Often, however, you as the founder don’t have the time, expertise, or other resources to explore these potential business options. But you can bring on a new employee who does.
That’s why hiring someone new can help you begin making money in new areas. Once you’ve identified your options and assessed your resources, a new team member with fresh ideas and proven skills in the target area can turn a potential opportunity into a productive one.
8. Hire your first employee before you lose your family or your sanity
Entrepreneurship is tough. It can challenge you emotionally, relationally, and physically. Lolly Daskal, the President and CEO of Lead From Within, said, “In any endeavor, reality is better preparation than fantasy. And when it comes to entrepreneurship, the reality is complicated. Being an entrepreneur is hard work.” Most new businesses don’t last five years.
It takes patient endurance just to survive in this business, and thriving in it requires a lot of skill, long hours, and many other factors beyond just having a passion for what you do. When you’re grinding away at your idea, you may find that leadership is more lonely than you thought.
That’s not to discourage you! Entrepreneurship can be painful and challenging, but it offers rewards that working for a boss never can give. Still, you can easily lose your relationships, physical health, and personal sanity during the hungry years of starting a new business.
If your business is causing fractures in any of those areas, it’s time to consider bringing on a staff member so you can take a vacation, enjoy a hobby, and spend time with friends and family. Hiring your first employee can greatly help your mental state as long as you are willing to delegate authority and responsibility and not micromanage your new team member.
9. Hire a new employee to keep your product & customer experience consistent
Today’s consumers expect both good quality products and excellent customer experiences. They want their product well designed, easy to buy, simple to assemble, and quick to use. Once your buyer purchases your product, they don’t want to have to repeat themselves to customer agents, and they expect efficient, personalized service. Can you provide all that with a smile? If not, hire your first employee fast.
According to Gladly’s 2018 survey, 92% of customers will give up on a brand if they have 1-3 bad experiences with customer service. Don’t risk losing your customer base. Start hiring help now to oversee quality of both products and services.
10. Don’t wait until customers are complaining to bring in help
Customers and clients don’t want to wait several days, or even several hours, for you to answer their email, return their call, or fix their problem. But you’re a business owner so you can’t spend all day sending emails, calling on the phone, and solving product problems. You need to be building your business. If you don’t love your customers, they’ll leave you. If you don’t build your business, it will leave you. Hire someone to do one of those things while you do the other.
Once your customers are complaining, it’s not a great time to start thinking about adding a second set of hands. That said, unhappy customers are often the very best people to bring back on board. Once satisfied, these folks will usually stick with you through the long term. So if you’re already shorthanded and the customers are getting crabby, hiring your first employee can turn the ship around sooner than you might think.
While bringing on a new employee can be challenging, scary, and exciting, it’s also critical to shaping and growing your business. The time to hire someone new is now. Get started on it.
Check out all of the articles in the ‘How to Survive the First Year of Your Business’ series:
- Why You Shouldn’t Quit Your Job When Starting a Business
- Don’t Have a Partner? You May Want to Hire a Co-Founder
- You Probably Won’t Make a Profit Your First Year and That’s Ok
- Why You Need to Hire Your First Employee as Soon as Possible
- Finding Investors in the First Year Can Be a Waste of Time
- Building a Business Is a 7-10 Year Journey
Stephanie is the Marketing Director at Talkroute and has been featured in Forbes, Inc, and Entrepreneur as a leading authority on business and telecommunications.
Stephanie is also the chief editor and contributing author for the Talkroute blog helping more than 100k entrepreneurs to start, run, and grow their businesses.