Hiring Your First Employee… When Is The Right Time?

You think about it more often as business picks up and you’re burning the candle at both ends. The thought of hiring someone has crossed your mind plenty, but you’re not sure if “now” is the right time. Whenever “now” is, hiring your first employee is a huge step. You are taking on new people, new payments, new paperwork and new problems. It’s a familiar dilemma for most small businesses and one that requires planning and thought.

When is the right time?

When Joe Palko and I started TheFerretStore.com, the “right time” came about four years in. We both worked full-time jobs (40+ hours a week) and packed and shipped orders until bed time. When it was no longer physically possible to keep up with the number of orders and effectively run the business, we knew it was time to start looking. We kept burning that candle at both ends though; even after our first employee came on board we kept our “day” jobs for another two years.

A Brave New World of Paperwork

Be prepared: Your first hire will send ripples throughout your business. The most important thing to remember is that when you hire your first employee, you’re now responsible for maintaining a payroll and paying appropriate payroll taxes. If you plan to offer benefits, you need to research affordable health care policies. Your business is now taking a more professional shape, so you should consider writing an employee manual complete with a company mission statement and policies you expect your employees to follow. We also recommend a human resources seminar to become more familiar with the HR and employment laws for your state.

On the Trail of Talent

Hiring family is convenient. Or is it? The first place most people turn for help is their family. While this may be a good option over the busy holiday season or in a crunch, we believe if you hire relatives, be aware of the risks. True, you may know and trust them best, but as you add more employees it becomes increasingly difficult to treat family members like the rest of your employees. This can lead to tension in the workplace and at home. Many businesses hire relatives despite the risks. For the sake of your business though, remember that when it comes to policies and possible disciplinary action, all must be treated equally and fairly.

Many of the same risks exist with hiring friends. The upside is familiarity; the downside is discipline. In our case, our first employee was a friend whom we both knew and trusted. Hiring friends is much like hiring family. Make sure that you and your friend remember that during working hours, you have an employer-employee relationship. Also, as Mom would say, “choose your friends wisely.”

So what about our first employee? I’m proud to say that Jason Longo is still with us! After joining TheFerretStore.com in 1998, Jason moved over to Solid Cactus as Implementation & Support Manager for the Cactus Complete Commerce group in 2005.

Hiring your first employee is a big step in making your venture start to feel like a “real” business. It’s exciting, nerve wracking and it’s going to cost you some money. But it’s something that every small business needs to do to grow. If you do it right, you’ll have no regrets.