For new entrepreneurs, there are several milestones to celebrate when you launch a new business.
Your first customer, first sale, first distribution deal – these are all things to toast. But at this point, put the coffee mug down and get back to work because you’re an entrepreneur. Don’t spend a ton of time celebrating milestones (although you should definitely celebrate them).
One milestone to celebrate is when it’s time to hire your first employee. You are no longer a one-person show. However, as great as it may feel to hire your first employee, it’s a step that requires a lot of preparation and consideration. Unlike a larger corporation, you (and you alone) are responsible for payroll.
Here are six hard-earned lessons to learn when it comes to hiring that first employee:
1. Spend 25% of your time recruiting your first hire
A bad hire is much more than just a headache. The wrong hire can actually kill a startup dead in its tracks, according to Sam Altman, president of Y Combinator. He says if your first hire does not believe in what you’re doing with the same amount of passion as you, that person can end up poisoning the culture of the company (before the culture even has a chance to be established).
Airbnb spent five months hunting for their first hire, Altman says. The founders spent a good deal of time on the recruitment process because they wanted their first employee to share their passion and, more importantly, not get scared and leave at the first crisis.
As any successful entrepreneur knows, every small business faces several bumps in the road. You need people that have the same seemingly-absurd, crazy faith as you that things will work. Altman suggests 25% of your available time should be spent on the recruiting process for your first hire.
2. Remember, employee #1 is a ‘culture starter’
When you hire your first employee, you are also creating the process and set of guidelines to be followed when you hire subsequent employees. You’re also establishing the traits you want your employees to convey to each other, to you and to the general public on behalf of the company.
As your business grows, that first hire will be 50% of your workforce (when it’s just you and that person), 33% of your workforce (when you hire your second employee), 25% and so on as you hire more people.
When you look at it that way, you realize just how important that first employee is. They are a huge chunk of your workforce and therefore need to exemplify your company culture. Your first hire needs to be as invested in your company’s success as you (even more, if possible).
3. Refrain from hiring for potential
Sometimes people get hired, not for past experience, but for their attitude and potential. This is fine when you’re running an established company. However, for the initial hire in a startup, use past accomplishments to judge suitability.
You may be tempted to trust your gut and hope that an under-qualified person will embrace the position and grow into it, but your gut doesn’t have the cash to pony up if you end up being wrong. Of course personality does count for something. You should want to work with the person. But it’s better to take time to find someone who fits both the personality and the experience qualifications of your ideal candidate.
During the interview process, focus your questions on candidates’ prior accomplishments, relevant work and life experience and what motivates them to perform at their best.
4. Invest in your first employee
When you hire an employee, you’re not just hiring them to serve the business. The business should also serve them. Whether it’s job training, continuing education, etc. help your first employee become the best possible version of themselves. In turn, they will help your business become the best possible version of itself.m If you’ve hired the right person and lead them the right way, they will stick around.
5. Empower and trust your first employee
Eventually, you want your business to grow to a point where you aren’t knee deep in daily operations. Instead, you can shift focus and start scaling up. In order for that to happen, you need to trust your employees to make decisions. To build that trust, you’ll need to empower them.
This isn’t always easy for an entrepreneur to do. Your business is your baby. You want to see it grow and prosper. It can be difficult to put decision making power in someone else’s hands.
It’s best to start with a small level of responsibility. Build up from there while offering constant feedback and critique.
6. Hire slow, fire fast
If it’s not working with your initial hire, let them go quickly. A quick exit will benefit the (former) employee and let them move onto their next job in a timely manner. More importantly, though, it will benefit your business.
You’ll be free of someone who could have proven disastrous for your business in its fragile startup stage. You will now be better prepared to hire the right person because you will (hopefully) have learned something from the bad hire.
The quicker you act, the less likely a bad hire will adversely affect your business. It might be tempting to hold off and see if things will turn around. But you’re talking about the very future of your company. It’s etter to be decisive sooner rather than later.
Hire smart from the start
Although it will eat up a big chunk of your time, hiring your first employee is well worth whatever amount of time you need to dedicate to the task.
Be diligent as you sift through the embellished resumes. Ask the pointed questions. You’re ensuring the survival of your company, developing your corporate culture from scratch and investing in someone’s future. That deserves an ample amount of dedication.
This article has been edited.
Rafael Romis founded web design agency Weberous in 2011 to help businesses stand out and boost their online presence. Originally from Greece, Rafael lives in Los Angeles and when he’s not working at Weberous, he offers business and marketing consulting to small businesses. And when not working, he enjoys the California sunshine with his wife Jennifer and his puppy Goldie. Connect with @RafaelRomis on Twitter.