It’s a huge decision.
Between the cost and the implications it could have on your work, it might be the biggest decision you make all year.
I’m talking about hiring your first employee.
As a service-based small business owner, it’s difficult to know when the timing is right to hire, and your imagination can run wild when thinking about it.
What if you end up hiring and it costs more money than you earn? What if something goes wrong and you end up hiring the wrong person? What if a new employee messes something important up?
The decision can seem overwhelming at times. Here are four questions you can ask yourself to make sure that you make the decision when the timing is right. Some of these questions may be difficult to answer, but if you’re honest and open with yourself while you explore the answers, you will be able to make the right decision.
1. Can You Afford It?
It can be difficult to figure out when you should hire your first employee as a small business owner, but the first step should always be to determine whether you can afford to hire.
Do you have room in your business budget to take on the costs of an employee?
The employee does not necessarily have to be full-time, but there are costs other than wages to keep in mind when assessing your budget as well, including:
• Worker’s compensation insurance
• Potential for benefits
• Employee uniforms and supplies.
The government has a webpage outlining the process involved including the costs, so take these expenses into consideration as well as the potential wages involved when you’re assessing whether you can even afford to take on an employee.
2. Can You Afford Not To?
Are you struggling to keep up in your business?
Have you ever had to turn down clients because you’re just too busy? Maybe you’ve had to work well past a standard workday to meet the demands of customers.
If any of these statements sound familiar, it might mean that you can’t afford not to hire.
If your business it at a point where you have a lot of work but not enough time to complete it all, it’s more expensive to not hire an employee than it is to pay an employee’s wages, because you’re losing revenue by not bringing another person on your team.
Consider whether you could either free up more time to take on more clients and keep up with client demand, or hire somebody to help you take on more clients in your business.
3. Are There Duties You Dread in Your Business?
You didn’t start a service-based small business to do work you don’t love.
You became an entrepreneur to follow your passion, to work with your dream clients and spend your days in “the zone.” So it is disappointing to dread some of the tasks your business requires to remain running.
If there are some tasks you must do in your business that you’d rather not do – or worse, that you’re not good at – it may be time to consider hiring your first employee. Consider hiring somebody to pick up those duties, who is good at them, and who loves working on those things that you’re less than enthusiastic about.
That way, you can free up that time to focus on the work you actually like doing.
4. Are You Ready to Give Up Some of the Work?
The most difficult part of hiring is that to do so, you have to give up some of the work that was previously your sole responsibility.
As freeing as this sounds, it’s also daunting for most entrepreneurs.
We tend to have a lot of fear around giving up our control. If you’ve ever thought that things are easier if you just do them yourself, or that you are the only person who can do the duties and tasks of your business, you may have a difficult time giving up the control of wearing all the hats in your business.
This is completely normal and something most small business owners struggle with at first, but if you aren’t ready to relinquish that control, you risk wasting your money with an employee you’re not fully utilizing.
Hiring an employee can be a great decision for your business. It can free up some of your time so that you can focus on the things that matter.
But timing is everything. So ask yourself whether you can afford to hire an employee – or whether you can afford not to. Explore the tasks in your business you’d rather not be responsible for, and whether you’d be able to give those tasks to somebody else.
You may just find that the answers to these questions are in favor of hiring. And you never know – when you hire the right person, you may just be able to take a day off here and there.