5 Signs It’s Time To Hire Your First Employee

Do you really need to hire a new employee? What if you hire someone completely incompetent? What if you’re a terrible boss?

Every entrepreneur sets off with the goal of being their own boss. Now it’s time to decide whether you should hire your first employee.

If you’re faced with this decision, that’s a good sign. It means your company is making progress. Now you’re ready to kick things up a notch. It’s an exciting time, but also an uncertain one.

Do you really need to hire a new employee? What if you hire someone completely incompetent? What if you’re a terrible boss?


Making your first hire

It’s easy to get bogged down and overthink how to make your first hire. The more you think about it, the more uncertain you become about the process. Knowing when to hire your first employee can really make the difference between a successful expansion and premature scaling.


Photo: © Boggy, YFS Magazine

Remember, the extra money and effort exerted on your first hire can easily be spent elsewhere.

So how do you know when the magic moment has arrived?

Like in all facets of life and entrepreneurship, there’s no secret formula that reveals the right answer. However, there are some signals and ground rules that will allow you to make a more informed decision.


1. Hire with your bottom line in mind

Forget the trivial things you’re worrying about. Simplify your hiring situation down to this one question: Will your first hire generate more money than they will cost?

This is the crux of all financial decision-making. After crunching the numbers, if a venture into a new market or certain project will net a higher bottom line, then company’s will typically go for it. Think of your next hire as just that – another financial decision.

This means doing some numerical calculations. Forecast how much more revenue you’ll be able to generate with a new employee. Compare that to how much it’ll cost to bring a new hire on board. If you find that the additional revenue exceeds the expenses by a considerable margin, then go for it.


2. Hire when you need more than a freelancer

Hiring a new employee comes with a lot of other hassles, more paperwork and more legal responsibilities. As a small business owner if you want to avoid this type of unnecessary responsibility, you might find that hiring a freelancer can be a very appealing alternative.


How to protect your startup idea
Photo: © Boggy, YFS Magazine

Online freelance marketplaces such as Upwork and Freelancer make it extremely easy to hire freelancers on a project basis. Simply sign up and create a job listing. Before you know it, offers will be flying your way!


3. Hire when you have no time to think big picture

As an early stage startup founder or solopreneur, you wear many hats. This includes tedious tasks like answering phone calls, online support, shipping, and every task required to operate your business.

This might seem perfectly fine at first, but don’t forget – you’re the CEO and mastermind. All the time and effort you spend on daily activities can instead be used to grow your business on a far larger scale.

Making business connections, finding new revenue sources, and yes, even hiring new employees, are vital to business expansion. So if you find yourself too busy with menial tasks to work on big picture items, then hire a helping hand.


4. Hire if there’s an uptick in customer complaints

Let’s say your company creates animated B2B sales videos. You’re an expert at video creation and editing. Yet you’re not a voice-over expert, so you start receiving customer complaints about video narration.


How to protect your startup idea
Photo: © Boggy, YFS Magazine

If you find yourself in a similar scenario, listen to your customers! This is a sign that you have spread yourself too thin at the expense of the quality of your work. Hire or outsource to an expert in this area to ensure high quality work and attract more business.


5. Hire when you can keep an employee busy

Sometimes the extra work you need done is only temporary. It’s easy to get excited by an increase in sales without accounting for the fact that a burst of new clients may not be sustainable going forward.

That is why it’s crucial to accurately forecast your future sales. This will give you a better feel for your long-term hiring needs. You wouldn’t want to hire for a full-time position just to have your new employee sit around all day waiting for work to do.


This article has been edited.

Peter Yang is the co-founder and CTO of ResumeGo, an online resume writing service for job seekers looking to advance their professional careers. Prior to this, he worked as a human resource manager for Hewlett-Packard and IBM. He looks forward to sharing his experience in HR and entrepreneurship. 



© YFS Magazine. All Rights Reserved. Copying prohibited. All material is protected by U.S. and international copyright laws. Unauthorized reproduction or distribution of this material is prohibited. Sharing of this material under Attribution-NonCommercial-NoDerivatives 4.0 International terms, listed here, is permitted.


In this article