It’s every solopreneur’s dream: You’ve started a business, and it’s booming.
But then it starts booming so much that you can’t seem to handle it all on your own.
That’s when you consider getting some help. But how do you know if your needs warrant hiring a staff member?
There are plenty of factors that go beyond feeling overwhelmed with your workload. What types of additional costs will you have? Can you afford those costs? Can a contractor get the job done? How do you know what position to hire? How do you know who to hire? And where do you even get started?
Find Out if You’re Ready for Your First Employee
Just because you feel like you need help, it doesn’t mean you’re actually ready for it. To improve your chances for success, clearly identify your needs and use data to back up your decision.
Still not ready to take the plunge? Hire a contractor for the position to see what kind of impact they make. The risk is smaller, and if it works out, they might be interested in joining on a full-time, permanent basis.
But before you make any moves, here are some questions to ask yourself:
Which Tasks Take the Most Time, and Which Ones Can Someone Else do for You?
Maybe it feels like you’re spending endless hours on your email marketing campaigns, for example. How do you know you’re right? Track your time.
Review the data after a week, a month, or even a quarter to see what’s taking the most time. First, list all of the functions you do. This could include accounting, customer relationship management, marketing, etc. Split each of these tasks up as much as you can, and then start tracking time spent on each. An app like Toggl can help.
Ask yourself if this is something you personally need to continue doing, or if someone else can do it. Can you hire a freelancer, or is this better tackled in house? In the latter case, hiring an employee could be the way to go.
Retailer Greg Rudolph started his business, Board Blazers LED Skateboard Lights, when he was still in college. It didn’t take long for Board Blazers to take off, and he knew he needed help.
His advice? “If you find yourself doing the same thing for three months, you should hire somebody to do it.”
The philosophy behind that statement is simple: Once you’ve found yourself in a routine with a specific task, it’s likely that someone else can take it over. That person will have more time to identify new and innovative opportunities, instead of simply managing on autopilot.
Rudolph knew hiring a contractor wasn’t the route for him. He first hired a Content Manager, because the role was too involved and comprehensive for a freelance resource to meet his needs.
“There were many small, but related, duties for the position,” he explains. “For example, responding to Instagram comments, posting blog article announcements to Facebook, and designing banner images for each blog post are all minor tasks, but together they don't fit the mold of any of the pay-per-post writing services. Plus, we wanted to ensure an excellent level of quality.”
Can You Maintain a High Level of Customer Service?
For many entrepreneurs, it’s not about suffering themselves. The decision to hire a staff member comes from the need to cater to customers and keep them happy.
Take a look at how long it takes you to fulfill orders; if this has changed since you first started, it could indicate that you need help.
Allen Walton of Spy Guy Security wanted to maintain customer service as his number one priority. When he became too busy, Walton knew he couldn’t keep his customers happy on his own.
“I needed to make sure orders were shipped, inventory was in stock, and the business was growing because of my actions,” he says. “The first thing I needed to do was get off the phones and out of the inbox.”
How did Walton know his level of customer service took a downturn? Negative customer feedback led him to review his list of outstanding customer issues more closely.
At the end of the day, the list would be longer than the day prior, and I knew that I had other important stuff that needed to be done to actually grow the business. I wanted growth — not maintenance.
Are You Able to Meet Demand?
Beyond customer service suffering, there might come a point where you’re not able to offer any service at all. If you’re too overwhelmed to fulfill orders, you’re probably ready to hire.
But don’t wait until you become desperate. Take it from Walton, who wishes he had hired someone months sooner.
“It took a lot of time to get my new hire up to speed,” he recalls. “If I had done it three months earlier, when my business wasn’t as big, the onboarding would have been smoother and I could have handled the growth we had encountered.”
Hamilton Perkins, founder of Hamilton Perkins Collection, found himself unable to meet customers’ demands to have his handbags available at brick-and-mortar retail locations. “[Customers] inquired about our presence in major markets,” he says.
He made his first hire to help establish key wholesale relationships with retailers to meet demands for his products to be available not only on his website, but in physical stores as well.
Things to Think About Before You Hire
Consider this: To keep an employee at an annual salary of $50,000, it actually costs employers anywhere from $62,500 to $70,000 each year, according to one MIT study.
At the end of the day, your first hire needs to be someone who can help you take your business to your next level — and be someone you can sustainably afford.
So what makes it so expensive? Here are some of the costs that come with hiring staff members:
- Recruiting expenses: These costs can include job ads and postings, or fees paid to headhunters if you choose to go that route (more on that below).
- Salary: Perhaps the most straightforward cost, this is the salary you will pay your employee.
- Taxes: This includes a bevy of federal and state taxes, unemployment taxes (these vary by state) and more. The IRS has resources to help employers understand these taxes more thoroughly. .
- Benefits: You need to decide what types of benefits you want to offer — medical, dental, 401(k) contributions, etc. — as well as which ones you must provide. The U.S. Small Business Association has a list of required employee benefits that all potential employers should review.
- Physical space: Think about if you have a physical space available and how much it will cost to prepare that space. Don’t have anywhere at the moment? Determine how much it’ll cost you to change that. This may not apply to all employers (for example, if you make a virtual hire or onboard a remote employee).
- Other equipment: Similar to the physical space cost, equipment might not cost you anything. However, if you plan to furnish equipment related to an employee workstation like a computer and other office supplies, these are costs to remember.
You should also look beyond your first staff member. Come up with a hiring plan that maps to your individual business needs. Remember, not all businesses are the same, so what works for someone else may not work for you.
Be flexible; you might need to change your plan as different needs arise. Refer back to Greg Rudolph’s three-month rule: If you’re doing the same thing for three months, hire somebody to do it.
At the time of his first hire, Rudolph didn’t consider hiring for any other positions. “As we’ve grown, however, we’ve continued to add staff in the order they’re needed instead of following a more traditional path,” he says. For example, his first staff member was a Content Manager, instead of following the norm and recruiting a Customer Service Manager first.
“While we’re still growing — we now have a team of six — I try to stick to this same mantra,” Rudolph says of his hiring plan. “It sharpens our focus on what positions we need, and it keeps us from hiring unnecessarily just for the sake of growth. We only hire as needed — [which is] a valuable lesson for any retail entrepreneur.”
Making Your First Hire
After you’ve determined you’re ready to become an employer, you need to find the right candidate for the right role.
For many solopreneurs, there might not be a specific position to hire at this point. Look for someone with a variety of skills and experience, so you can depend on them to be versatile. They might need to jump in on marketing, vendor communication, on- and off-site website optimization, content creation, shipping orders, and other unpredictable tasks.
Candidates with experience in startups or small companies are ideal, as these are the types of fast-paced, non-traditional environments that often demand employees wear multiple hats.
Is there something this person can bring to the table that you don’t already have? Look for skills and experience that will complement your background. Again, you don’t need a mini-me; you need someone who can help get your business to the next level.
Other characteristics that indicate a valuable candidate:
- Have a similar vision and values
Experience is key. An inexperienced candidate as your first hire likely won’t bring a lot of added value to the table. Rudolph recounts his first mistake, when he hired a student. “He did an excellent job, but as often happens with students, his schedule changed, and he couldn’t continue.”
We’ve identified the who, but where can you find these dream employees? Referrals can be the most valuable source for candidates. Rudolph turned to his network to help him find the right person for the job. “We found our current Content Manager after she came highly recommended from working for an entrepreneur friend’s company,” he says.
Ask people in your network if they know anyone who might fit the bill. You might be surprised and learn of individuals you already know who are looking for a new opportunity.
Allen Walton actually hired someone who trained him in one of his previous positions within the security industry. “It turned out that he needed a job that would allow him to work from home, and his current job wasn’t cutting it,” he says of the situation that “couldn’t have been more perfect.”
A simple email blast or LinkedIn message to your contacts could be all you need. Offer a quick overview of the opportunity, describe what you’re looking for, and provide the best way to contact you for more details. You never know who will bite.
Niche job boards can also be a great place to find quality candidates, as opposed to generic job sites where you’ll likely receive poor applications. These professionals will already have interest and/or expertise in your industry, and you’re more likely to avoid mass appliers (people who apply to as many job postings as possible, often without reading the job descriptions thoroughly).
You can also hire a recruitment agency or headhunter to help. They can weed through candidates and identify the top picks, completing some of the vetting process for you. Look for headhunters with expertise in your industry, as they’ll be more privy to what you need and can tap into their network of existing qualified candidates.
So you think you’ve found the right person? There are still a few final steps to take. Contact the candidate’s references to make sure they all check out. Then consider conducting a pre-employment background check before finalizing the offer.
For more tips on how to find your first employee and retain them, read Retail Staffing 101: How to Hire, Train, and Retain the Right Employees.
Have any other tips on hiring your first employee? Share your advice in the comments below.