How Do You Know It’s Time to Add Your First Employee? (Part 1)

While growth can be incredibly exciting for you and your small business, there are several factors that come into play when considering to add to your first employee or not… you want to make sure that the increase in business is sustainable and will support an employee.

GROW Blog image - time to hire-

What Type of Growth Is This?

Is this short-term growth due to seasonality or an industry change? If yes, then hiring someone may be something you’re not quite ready for. Perhaps adding a contract employee or a temporary staff person might be the right answer.


Are You Working Efficiently?

The right time to add staff comes after you’re sure that you’re are working optimally. And, since you’re the owner it is likely you are spending more time working IN the business instead of ON the businesses. Could adding the right person, or outsourcing some aspect of your responsibilities free up your time to focus on more revenue generating activities? This is one of the bigger dilemmas most of our clients face. Don’t worry, we can guide you through it!

What Skill Sets Do You Need?

Identifying the position, roles or responsibilities you need to add can help clarify what type of help you need. And, adding much needed skills could also help you attract more clients or produce better products having a longer-term impact on your business.

You’re probably wearing all the hats and are finding yourself bogged down by work or not working to your fullest potential. This is a critical time in your business for you to ask yourself if hiring someone to help you out will have a better and lasting effect. Do you need someone to do administrative work, or do you need help on a bigger scale? Pinpointing the kind of help you need will help you to find the perfect person to hire, contract with, or even outsource.

Hiring’s Impact on the Bottom Line.

Hiring that first employee can be scary. We get it. Employees and staff can impact more than just productivity. Payroll is one of the largest portions of small business budgets. An employee directly impact finances, so make sure you review your budget. Understanding and managing your business’s growth is huge. If you’re going to be raising fixed costs through payroll, it’s important to evaluate revenue and projected revenue growth to support this addition.

If you have even the smallest inkling that your finances might fall short at some point, don’t be afraid to consider an independent contractor or freelancer to help with specific tasks on a project by project basis. This arrangement may help you through a short term need, and help set the tone for adding employees as you grow.

Many businesses hire staff for busier seasons, especially around the holidays or special events. This may be an effective strategy for your business, depending on your busy “season”.  As the business owner, ask yourself if the help needed can be outsourced or if it truly requires an additional employee.

Remember, always consider you’ll be paying more than just a salary with a new hire. You’ll need to budget for taxes and other payroll related fees.

GROW Can Help

As a small business owner, you face all kinds of decisions that impact the bottom line. Our staff at GROW is here to provide guidance and support for you every step of the way. Consider talking with our team about connecting with a business mentor who can assist with your budgeting, forecasting or operations aspects. Or, attend one of our small business training workshops around business finances. Either way, our team is here to help, contact us today with your questions or try our free Intro to GROW class to learn about all we have to offer.

If you’re ready to hire your first employee, there will be some requirements and regulations to be aware of. Visit for some great resources. This can include having your own EIN number, registering with the state for reporting and of course setting up records for withholding taxes. Don’t let this scare you, business growth is exciting – and GROW has many resources here to help you every step of the way.

Stay tuned for Part 2 on this topic when we’ll talk more about the financial aspects of hiring your first employee.