Hiring your first employee is one of the most exciting decisions any entrepreneur will make. It can also be one of the scariest. Think about it: that first employee doubles the head count of your company! In many ways this makes it the most important hire you'll ever make. Every year thousands of business owners make this first hire decision and each one faces all the same questions and anxieties such a big step can create.
Is this the right time to hire someone?
Can I afford to hire/can I afford not to hire?
How do I recruit?
How do I interview?
What if business falls off?
What if they don't care about my business like I do?
What if they prove unmanageable?
What if I train them and then they decide to move on?
In many instances, your business growth is determined by the people you hire, so you can't afford to make mistakes.
The right timing
One of the mistakes entrepreneurs make with a first hire is not doing it soon enough. Consumed with survival, many solo business owners miss key opportunities. Engulfed by the technical work, (doing it, doing it doing it) they fail to innovate and become obsolete in the face of more nimble competitors. Waiting too long may also force you into a hurried hire which greatly increases the likelihood of ending up with the wrong person.
So what signals the right time to bring on that first employee? It could be that you're suddenly having to turn away customers, or that you find you're spending too much time on lower-level administrative work instead of concentrating on the strategic activities required for business growth. It might be spurred by the absolute necessity of gaining expertise in an area that you don't possess. Or perhaps you've simply realized that it takes a team to satisfy your target market.
Whatever the cues, you need to back away from the business a bit and look at it objectively. Ask questions. Quantify. Do whatever it takes to determine whether adding your first employee will remove the current frustrations... not add to them. For example, if you're a contractor feeling overwhelmed with the amount of work on your plate, your first instinct may be to hire another contractor to help you do that technical work. But upon closer examination, your business may in fact be better served by bringing on a part-time administrative assistant.
Think the decision through carefully and consider the exact results you expect to achieve by doubling your head count overnight. How will adding this person help you make more revenue or better serve the customer?
Remember, even if clients don't pay on time, your employee expects to be paid. Taking on an employee is a commitment of your time, your money and other resources. Double check your basic premise surrounding this new hire. How quick do you need to see sustainable results? What type of training needs to be involved? How will their coming on board further your sales effort, handle a critical area of the company or free you up to focus on generating more income? If you can't ask and answer a series of questions like these, then maybe it's not the right time for you.
The right fit
Besides the timing and finance issues, another source of anxiety in hiring is how to choose the right person.
First, create a position agreement for the new hire and be absolutely certain you can afford to pay them while you're waiting for the results of their position to ramp up. You might consider starting them out as a contractor since it's easier to extricate yourself from a contractor relationship than an employee if things go sour. In keeping with the E-Myth perspective, your first priority shouldn't necessarily focus on a particular skill but rather on identifying the right attitude. Are they passionate about the business you're in? Do they have that certain knack for responding to customers? Do they have a high energy level coupled with a good equilibrium to handle the rapid changes in a small business? Remember skills can be learned, attitude rarely can.
Recruitment and hiring decisions are surely some of the most important ones you'll make in growing your business. Don't rush it. You may have friends, family or acquaintances that fit the job requirements, but don't settle too early on a particular candidate. Cast a wide net in your recruitment efforts by thoroughly understanding where the best candidates search for work and communicate what you're looking for and why you're a great opportunity for a lucky first employee.
One valuable tip: besides the position agreement, develop a ‘behind the scenes' ideal candidate profile listing all the qualities and skills you're seeking so you know precisely what you want in that first employee. Then gear your interview questions to determining if they fit your profile.
The right decision
Many solo entrepreneurs break out into a nervous sweat as they attempt to make the right decision about hiring their first employee. But as you've seen, this decision requires a combination of art and science, working through the numbers and the necessary tasks and deciding it's the right time.
Once you decide to make that first offer, on the first day as you greet your new employee on the job, be intentional about the one fact that changes with your first hire: you're now a manager. If you're not used to wearing the Manager's hat, along with that of the Technician and Entrepreneur then commit yourself to learning about management and realizing that your new hire needs your support and guidance as much as you need their energy and skills. If you begin engaging with the managerial part of yourself with that first hire and adopt strong management systems, you'll be that much further on your way towards creating a world class company, one team member at a time.
Share your story
Tell us about your first hire. What did you learn? What would you do differently? Post a comment and tell us about it.