9 sure-fire signs you should be hiring your first employee

Hiring your first employee is an important milestone for any new business start up. Hire too early and you may face cashflow problems, while leaving it too late could limit your business’s growth. Hiring your first employee is a crucial decision that’s vital to get right.

It pays to know the right time to hire your first staff member. Hiring an employee can be risky, especially with tight budgets and the increase in administration. Trusting someone with key aspects of your business requires a big leap – but there are nine clear signs that reveal your business needs to hire its first employee.

1. You’re turning down work

Gaining and retaining customers is the key to your business’s success. If you find yourself turning away work on a regular basis it could be a clear sign that you need additional staff. Turning away customers can see them head to your competitors, which will help their business grow instead of yours. Expanding your workforce means you can take on more work and retain existing customers. Make sure, however, that there is enough ongoing work for a new employee otherwise you could be out of pocket.

2. You’re losing customers

If you’re too stretched with work, your business could lose vital customers. Being too busy to take customer calls, missing customer deadlines or being unable finish work to a high standard are all clear signs that you need to hire your first employee. It’s far harder to acquire new customers than to keep existing ones and losing one good paying customer can cost far more in the long run than hiring an employee.

3. You’re struggling to complete day-to-day tasks

If you’re busy with customers all day, finding time for the admin of running a business can be struggle. Often there isn’t enough time in the day for everything. Most entrepreneurs and small business owners find they end up doing the bookkeeping and administration after hours and at weekends, leaving them in danger of burnout.

A key, initial hire may be a staff member who can handle day-to-day tasks such as email, bookkeeping, diary management and answering phone calls. Taking the admin off your desk can free up your time to grow your business.

4. You need specialised skills

Like most entrepreneurs and small business owners, you’re probably a jack of all trades. But that doesn’t mean you can do everything that’s required in running a successful business. Your business may need specific skills that you lack, such as sales, marketing or IT. Learning a new skill is powerfully attractive to entrepreneurs, but probably isn’t the best use of your time. However, before hiring a full-time employee, consider whether these roles can be outsourced as this may be a cheaper option.

5. You need a holiday or a break

Most owners of start up businesses put the idea of a holiday or time away from work on the back burner for some future date when work allows. Hiring staff to ensure you can take time away from work can be highly beneficial, helping boost your productivity and improving your wellbeing. You don’t have to employ a full-time member of staff, consider hiring a temp or outsource some of your work so you get time away from your business to recharge.

6. You want to grow your business

You may have found new ways to generate revenue but if you don’t have time to explore these because you’re too busy with day-to-day business, then it could be time to hire your first employee. This is doubly true if you’re aiming to sell your business in the future. Potential buyers will expect full-time staff running operations, rather than having to step in and run it themselves.

7. You have to time to recruit

Hiring your first employee isn’t an easy decision. It’s important to take time to select and hire the right person. Hiring the wrong person can be devastating for a small business, with increased time spent managing poor performance as well as the additional costs involving in employing staff. Take time to interview prospective employees and put in place a probation period so you can quickly remove staff from your business who aren’t a good fit.

8. You can write a detailed job description

Before hiring your first employee, it’s useful to create a job description. This should clearly outline their day-to-day duties and responsibilities. This is a chance to clearly define what work needs handling, the skills required, and the type of person you are looking for. It should also help you to determine if there is enough work for a full-time or part-time employee.

9. You have the money or the potential to generate money

This is one of the most positive signals – that your business has the chance to generate more revenue if you had more staff. You’ll need to develop a sales forecast and budget for the year ahead, and factor in staff costs such as salary, recruitment costs, workplace pension and office perks. Make sure you have enough cash reserves to pay for staff salaries until the business grows and the new hire starts generating additional revenue.

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