November 25, 2019

An Entrepreneur’s Guide to Hiring the First Employee

If you are a startup entrepreneur working many hours, burning the candle at both ends, doing work you love but hating the fact that there are not enough hours in a day and not enough days in a week, then this question has probably crossed your mind:

“When can I hire my first employee? I could move so much faster if I hired someone to take this work off my plate!”

Before you take the leap of hiring someone, with all the effort, cost, and responsibility that entails, consider that over 25 million businesses in the United States are nonemployers (as of 2017). That number is likely to increase as more and more entrepreneurs opt to build their million-dollar businesses using freelancers and automation.

Below are some steps to take before hiring that first employee…

Step 1 – Identify and outsource tasks outside your zone of genius.

In your business, there are probably dozens of tasks that you are capable of doing but could be done cheaper and quicker by someone who does that task professionally.

Freelance services like Fiverr, UpWork, Freelancer, and ProcessPeople are building a global workforce of people who do one thing well. These valuable workers are rated by previous clients, so you can see their reputation and their work ethic.

You know that task you abhor because it takes ten times longer than it should? There’s probably someone out there who will do that for you in a fraction of the time. Sure, it will cost money, but if it accelerates your business toward profitability, then isn’t it worth the expense?

ACTION: Make a list of tasks that you do in your business. Star the ones that only you can do. Place a checkbox next to the ones you can outsource. Now you have your list of potential tasks for outsourcing.

Step 2 – Automate repeated tasks

Some repeated tasks are worth investing in automation. Tools like Zapier, IFTTT and ProcessPlan allow you to build scheduled or triggered workflows that simplify repeated tasks using data from various sources. Why hire a person when a platform can do that work for you automatically?

Some repeated tasks could be eliminated by using existing software solutions. For instance, why manually create a financial spreadsheet each month when you could use systems like Quickbooks, Xero, or FreshBooks to automatically generate these reports?

Some complex tasks could be handled by creating software. There are freelancers and companies like Clear Function who can help you create software to handle those complex tasks that existing platforms cannot handle. Again, why hire a person when a platform can do that work for you more efficiently and cost-effectively?

ACTION: Take your list of tasks and put an “R” next to the repeated tasks. Are there automated tools out there that could handle that work for you? If you are not sure where to begin, you can outsource that research to someone as described in Step 1!

Step 3 – Hire a contractor

When you get to the point where you need multiple freelancers to do the same sets of tasks, you may find that having a dedicated contractor will be more efficient and cost-effective. You could start by asking your best freelancer to work with you on a more exclusive basis. If they are not able to do so, it may be time to post a contract-to-hire position.

By now, you should have developed a good sense for what this role will look like as a full-time position. For instance, if the task is software development, then your future position for a small company might be a Software Engineer. As your company grows, the position may become something more specialized, such as a DevOps Engineer or Enterprise Architect.

Don’t worry if you don’t have the full evolution of the position all mapped out from the start. Your needs, their needs, and technology itself will change over time. But you do need to prepare for what might come after the contract-to-hire phase, including both the potential promotion to full-time employee status and a “Plan B” if the arrangement doesn’t work out, which is always a possibility. You are probably not their only client, and their talents are appreciated elsewhere.

Step 4 – Hire your first employee

If the contractor you hired believes in the vision and mission of your organization, and if they are eager to help you build your company in a supporting role, then and only then should they be considered for a full-time position.

This first hire is the most important hire. They should buy wholeheartedly into the beliefs that shape your business, the vision of the world you are trying to create, and your plan for creating that world. You want someone to advocate for your business based on conviction, not obligation.

Is your business shaped by the belief that something is wrong in the world? Is it your purpose to right that wrong? The person you hire should have the same beliefs and the same purpose.

What will the world look like if you are successful? Does the person you want to hire see that world as a possibility? Do they believe in your plan to make that world a reality? Do they want to bring the best of themselves to help make this happen? If yes, then they are a great candidate.

Finally, will their presence as a full-time employee increase your profitability, not just preserve your sanity?

You know you are ready to hire your first full-time employee when all of the following are true:

  1. They believe in what you are doing.
  2. They are willing to wear many hats to make your shared vision a reality.
  3. They will make your company more profitable.

Without a shared vision or a boost to profitability, they will likely leave and your investment will be lost. You want someone who will evangelize your vision, mission, and values to the next new hire.

You are not just hiring your first employee; you are planting the seed of your future employee culture. Choose wisely!

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