How to Know When It’s Time to Hire Your First Employee

Neil Patel

At some point, every entrepreneur must face a challenging decision: Is now the time for me to hire my first employee?

Hiring can be a paralyzing event. For so long, you’ve incubated the idea of your startup. Now, you’re ready to deploy your resources and make this happen.

It’s exciting, all right. But at the same time, it’s unnerving. What if the new hire doesn’t work out? What if you hire a flop? What if he’s incompetent? What if she quits? What if you’re an awful manager? Amid all these quandaries, one of the most fog-clearing questions is: Is this the right time to hire?
On one hand, if you hire too early, you’ll likely bring yourself cash-flow problems, a worker who has nothing to do and the added stress of management.

On the other hand, if you hire too late, you could miss that critical market moment for the release of your project, or you could be inundated with work that you can’t accomplish.
Finding the right moment to hire, therefore, can make the difference between a failed enterprise and a successful business. But exactly how do you know whether the time is right? And what does that magical right moment look like?
As in any arena of life and business, there are no single, pat answers. I can, however, give you some guidelines that have helped me as I’ve founded companies and made all kinds of hires.

Know the points at which you shouldn’t hire.
You’re desperate. Often, a hiring decision is made in the heat of a stressful moment. You have more work than you can humanly handle, and you just need to get another body behind a desk. A hasty decision born of desperation is rarely a good one.
You don’t know exactly what you want the new hire to do. Another mistake involves realizing you need help, but not knowing exactly what that help is going to look like. Unless you have a defined set of responsibilities and expectations for your new hire, do him or her a favor and don’t hire anyone. A new hire at this stage will rightfully be confused and ineffective. So, instead, hire a coach, not an employee.
You take the first person who comes along. If you’re lucky, the first applicant will be an absolute rockstar who can blast your business to the next level. But normally that doesn’t happen. You’ll learn a lot about yourself, about the applicant market and about your own position by interviewing more candidates.
Start with a co-founder.

If you’re a solopreneur looking to make that next step, hiring will certainly be challenging. You’ve had this business for a long time, and bringing on an employee can be intimidating. So, instead, hire a cofounder, at least mentally. A co-founder is a great idea, to begin with, but if you don’t have one and instead are making that first hire, look for someone with co-founder potential. What are some characteristics of a good co-founder? Here are a few that I suggest.

Complementary skills
Similar vision and values
Passion or energy
Emotional intelligence
A co-founder hiring mentality is critical. Your first employee will hopefully be one of your longest-lasting and most knowledgeable. You can also depend upon him or her when you eventually appoint managers or successors.

Hire when the tasks to be done will generate money.
It’s been said that the only two purposes of an employee are to:
1) make money for the business, or 2) save money for the business. If you have a reasonable degree of confidence that your new hire will do at least one of those two things, go for it.

In the early stage of a company, making money is more important than saving it. Besides, if you’re like most startups, there’s not much money to save. What you need to do is create the product or market the product. Later, you can worry about finding people to protect your hoards of cash.
You’ll know it’s time to hire, then, if you can identify a number of things that need to be done but that also will increase revenue. Here are some typical activities in that category:

Creating the product (designers, developers, etc.)
Marketing the product (growth hackers, content marketers, etc.)
Supporting the product (customer support, help desk, etc.)
Hire when the tasks to be completed fall under a particular skill set.
Before you look for an employee, know what kind of employee you’re looking for. There are a million different skill sets that you could identify. It’s not enough to simply know that you “need some help” or “need a developer.” Bringing on a jack of all trades may sound appealing, but it’s unrealistic and unlikely.

Instead, use a laser focus on a job candidate. You don’t want just a “developer.” You want a Javascript developer with GitHub experience able to create machine learning algorithms with educational applications. Now, that’s specific. And the clearer the set of responsibilities you layout, the more accurately you’ll be in hiring someone to fill these responsibilities.

Kick the tires by hiring a contractor.
You may still be undecided over whether or not it’s time to hire. Don’t sweat it. Instead, test it. Instead of hiring a full-time employee, hire a contractor. The introductory hassle of hiring a contractor is low compared to that for hiring an employee.

Hire a contractor with the same set of parameters you’re looking for in an employee. You can create a contract for one month, six months or a year. Try to answer these questions during the contractor’s tenure:
Is this contractor helping the company or holding us back?
Can we use a position like a contractor’s for the long term?
Do we need more?
If the contractor route works out well, you can transition this person into an official hire or else look for a full-time employee.

Don’t be afraid to hire. Even a terrible hire is better than no hire. Mistakes are an essential part of growing, improving and expanding. Sure, you might hire the wrong person. Or, maybe you’ve chosen the wrong time. At least, now you know.
You’re also likely aware that your company won’t grow until you get some help. And that’s something you want, right?