Finding Margin in Business and in Life

Four Questions To Ask Yourself Before Hiring An Employee

“I meet myself coming and going, I just don’t know if I can keep up with the demand! It seems like I can’t get it all done any more! There’s more work here than I can ever hope to accomplish! If I only had some help around here!” Sound familiar? For almost every small business owner there comes a time where he or she needs to make an important decision. Is it time to hire an employee?

Hiring an employee is an important business decision, especially when it is your very first employee. This hire will set the stage for future hires, so it is critical to establish your hiring processes before you take your first interview. This is the first of a 3-part series of blog posts, in which we will cover a number of considerations involved in bringing your first employee on board.

If you’re thinking that it may be time to hire, I believe there are four questions to ask yourself before hiring an employee:

  • Can I offset the additional cost with revenue?

This is, in my opinion, the first question to ask. Why? If you can’t generate more income as a result of this position, then perhaps, you have a different underlying business issues to consider. Can you quantify the financial impact of bringing a new employee will have on the business? Bringing on help must lead to revenue growth, either directly or indirectly.

  • Can I afford a reduction in income to bring on someone else?

When you bring anyone into your business, there will be a learning curve. For business owners, “learning curve” equals “your time” multiplied by “your income”. You must be prepared to invest the time early and often with a new employee to help them understand your business and ratchet up their proficiency and efficiency. This is very difficult when you consider the time constraints that drove you do this point thus far.

The point to consider is your business will likely suffer temporary setbacks financially during this learning curve. The extent of these setbacks is determined by the quality of the new hire and the time and effort put into training and development of that individual. Make sure you have accounted for this cost before you hire. If you can’t afford it yet, it may still be time to wait on hiring.

  • What do I need this person to do?

Don’t hire anyone until you can clearly define your expectations of the new hire. Create a job description. Have someone else review it and give you feedback. It may take several iterations before you get it down right. The key here is to make sure that your expectations and the job description are clear and in alignment. Secondly, this job description will become a great interviewing tool, as well as evaluation tool in the future.

  • What will the position cost to fill?

Now that you have created a job description, you can evaluate the likely cost to fill the position as described. Is it within your financial means? If not, you may need to get creative. Can you fill the position on a part-time basis? Can this be outsourced? Do I need to scale back the duties in the job description? These kinds of questions, in most cases, will lead you to the appropriate answer for your business.

Aside from starting the business, I believe hiring that first employee is the biggest hurdle small business owners face. Effectively addressing the questions above is important. To the extent you have a trusted business or financial advisor, a spouse or close friend; involve them in the process. You want your first hire to be a good experience. One that you can build upon for the future of your business.

What is the biggest challenge in hiring your first employee? I would love to hear your thoughts and comments!

Don’t forget you can follow and reach me on any one of the social media sites listed below. Simply press on the preferred button. If you would like to read more blog posts in the Where Do I Start? series, simply press on the link provided. In the next blog post, we will continue this topic with Four Mistakes to Avoid In Hiring Your First Employee.


Disclosure of Material Connection: Some of the links in the post may be “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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