When to Hire Your First Employee

There is so much debate around when the right time is to hire your first employee. Some say it has to be when the business is making $5K a month. Others say it has to be when the business has reached a certain margin percentage. There is so much information floating out there, it is tough to find solid advice sometimes.

I now have 4 employees, and the process of hiring has been mostly painless. Here is what I have found the most helpful for my business.

First, you need to realize the two key barriers to your success with hiring your first employee.

The biggest obstacle is figuring out how to pay this person.

When do you have enough money to pay someone? How much do you need to pay them? There are SO many factors around this.

Usually the timing is right when you are drowning in work, and you are making a good salary for yourself.

You will likely have to take a pay cut to cover the expenses of your first hire, but I promise it will be worth it. The thing is, when you lessen your work load, you can then shift your attention to sales! The increased sales will then cover the expenses of your new helper.

The problem is getting over your own fears around money. I totally understand not wanting to take on increased risk, like you did with starting this business in the first place. It was hard, and you finally feel like you are out of the weeds financially. BUT, with your workload being through the roof, it is really tough to see how you can continue to scale.

Know that there are options with types of workers you can hire.

  1. Casual employee: You would give them projects on a case by case basis without a guaranteed number of weekly hours. The benefit is that this person would not be 100% relying on the income, so you can test the waters slowly. Dip your toes in a little bit without over committing yourself. Then, if it is working well, increase their workload as you can afford to. The downside is you would have to be set up for employees- payroll, Worker’s compensation, etc. This is some work initially, and is set up differently depending on your local rules.

  2. Intern: Connect with your local colleges to find out the rules for interns in your area. This was the 1st type of helper I had, and it worked out great for both of us! She learned a lot, and I got help smoothing out my systems! It was great to have an extra eye on things and she helped me get a lot done too. You can do paid, or unpaid. If you do paid, you still have to set up your business for employees like above. You will have a set number of hours per week for the intern. Mine averaged about 10 hours per week because she needed 150 hours in the semester to get credit for the class. Many employers take advantage of interns- especially unpaid ones. The benefit is supposed to be weighted to the intern, meaning they should be learning more from you than you are having them get tasks done. Make sure to completely understand the rules around interns before hiring one.

  3. Consultant: You can hire someone as a consultant for a set hourly wage or on a project by project basis. This option is nice, so you do not have to put them on payroll. The downside is that there may be restrictions on the type of work they do depending on what your business is and where you are located. For instance, as a barber shop, you may not be able to hire barbers as consultants in some areas because it is the same type of work your business provides. However, that same barber shop can hire a bookkeeper or a cleaning service with no problem. Research the regulations on this in your area, so you can ensure you are compliant.

To recruit your first hire, I’d suggest or You can also find great college recruits if you connect with your local Universities. Another great option is hiring a staffing company.

The second hurdle is trusting someone else to help you run your business.

Once you have the person, odds are you probably won’t be able to start delegating right away. You will need to provide training. The learning curve can really vary based on industry and job duties.

The key is for this first employee to be super flexible. They need to be okay with wearing multiple hats; afterall, you are a startup.

Once you feel like they are starting to understand their roles, you have to LET GO. Yes, you will have to ensure there are checks and balances in place, but you have to let them make their own decisions and make their own mistakes. This is how they will learn!

They will eventually create their own systems and ways of doing things. Give them the foundation and then let them run with it. If you hired well, odds are they will create a better system that you ever could have!

You have to trust them. I know you are a perfectionist Karen, but you are simply going to have to let it go. Your new hire will not sound exactly like you on the phone. They won’t do things exactly like you would do them. They are their own person with their own brain. If you train them the way you want it done, then let go and trust them, they will feel empowered. They will WANT to make you proud. The last thing that you want to do is disappoint them.

You must understand that this person is an investment for you and mistakes are part of the process. My first employee on payroll made a mistake that cost me $6,000 in her first couple months.

When mistakes are made, you can’t just fire them over it. This is a learning opportunity for both you and them. You need to be prepared for mistakes just in case. The more you teach and provide training, the less costly mistakes are.

Employees are great assets that can help accelerate the growth of your business if done in the right way. Don’t be the person who hires and then decides it is not for you because it is hard. Good things challenge you and take time. Give it a few months and I promise, you will feel relieved! My team is the best investment I have made in my business. I am extremely grateful for them every day!


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