As a small business owner, hiring your first employee is a major step in your entrepreneurial journey. It is a significant decision that requires a thoughtful approach because expanding your business comes with a lot of responsibilities that you must be prepared to handle.
Knowing the right time to make the first hire often poses a problem for small business owners as they are usually unsure if they are making the move at the appropriate period. This is not a baseless concern since hiring an employee could put a business in a vulnerable position; at risk for potential cash flow problems.
To avoid such issues, here are some signs to look out for in order to help you decide when to hire your first employee:
1. You’re overwhelmed and losing customers
As a business grows, so will the customers or clients. This means you have to meet up with more orders, requests and deadlines. These may have a snowball effect on your business (and even your health) if you can’t keep up by yourself. When you begin to neglect and turn down customers, it becomes a problem.
The aim should be to acquire new customers and use relationship marketing techniques to connect with them. Customer acquisition is the hard part. It’s much easier and cheaper to retain them. If you cannot handle the workload, It’s time to start looking for your first employee because one thing is for sure – You do not want to lose your customers to competitors.
2. Unable to catch up with daily financials, and bookkeeping
Dealing with customers, following up with orders all day leave little or no time for bookkeeping. You cannot afford to fall behind on your paperwork; it tells you your current business status and offers an insight to what is obtainable in the future.
As the business grows, the responsibilities will grow as well. Therefore, If you don’t have enough time to check your books, you should consider a software that helps handle your daily accounting and financials such as Quickbooks, and Zoho Books. However, If you don’t have enough time in the day to do this, even with software, it’s a sign that you need to hire your first employee.
3. You need expertise
As an entrepreneur, you’re passionate about your business and you are convinced that you know what you want to achieve and how to get there but in reality, you can’t simply have it all figured out.
There’s nothing wrong with bringing someone who has specific skills to help out. You could be great at manufacturing your products, but you don’t know the best marketing approach. Hire a marketing expert.
It is easy to think that you are capable of learning these skills and applying them on your own but ask yourself the questions Do I have time? Will my business suffer before I’m able to acquire this skill? If your answers to these questions are NO and YES respectively, then you should admit that you have some weaknesses – which is not bad thing – and hire the right people with the necessary skill set to help you grow.
It’s time to hire your first employee
Having gone through your checklist and observed that you have solid reasons to take the step of hiring your first employee, the next move would be to figure out how ready you are in terms of finances. Bringing in someone to assist comes at a fee. You would have to pay them and even before that, you might incur some expenses here and there like advertising the position. Your business’ cash flow is a determining factor in whether or not you’re ready to hire. You need sufficient and steady cash in your accounts to cover payroll. So you have to make sure that you are ready for this and that your hire would increase sales, revenue and contribute to the overall growth of your business.
Once you realise that you must make your first hire in order to progress and you’ve checked your financial standing to see how well you can cope with salaries, then you can go ahead to post the job opening. Here are a few guidelines:
Spread the word
There are so many platforms available these days to post job openings, social media is not exempted. However, It’s crucial to make sure that the one you work with is likely to get the attention of the kind of candidates you are looking for. While LinkedIn might be a great place to search for a marketing expert, you could have access to creatives on Instagram and Twitter. Spread the word but tweak the message style to suit each audience type for quick results; finding candidates through social media can save you both time and money.
You can also share the job description with your network, as referrals can be a great source of high-quality candidates.
Hire your supporters
This should not be a challenge especially if you have developed and maintained active social media handles, networking, and engagement or have made public appearances. If you also have a community of people that are loyal to your brand perhaps through membership or subscription, you can look inwards to see if any of them might possess the qualities or skills that you are looking for.
Hiring people who believe in your business is a dream come true for founders and CEOs because these people will work harder and smarter to make the business grow. They are emotionally connected to the business and they genuinely want the best for it.
Interview and hire!
This is your first time interviewing candidates to hire so you should brush up on questions to ask and questions you cannot ask for discrimination purposes. Do your research to know how to ask the right questions that will expose you to the true capabilities of a potential hire. Do not be biased in any shape or form because the future of your business is dependent on the people you allow into your company.
Hiring your first employee is a decision that should be made based on your own business needs and not what other entrepreneurs are doing or the trend. You’ll know it’s time to hire, when you can identify a number of things that must be done that you need assistance with, but that will also increase revenue.
A suggestion would be the contractor route. This may be considered instead of hiring a full-time employee. It is less expensive and allows for flexibility since it’s less of a commitment as well.
Contract work can be a way of testing the waters to see what it is like to manage people and how comfortable you are giving up complete control. You can take this approach before hiring your first employee.