6 Signs It's Time to Hire Your First Employee

Written by: Christina Merhar
Originally published on July 14, 2014. Last updated October 26, 2020.

Hiring employee number one is a big milestone for any small business owner or entrepreneur. You’ve gotten your business up and running. Now you need help in order to grow, operate, and/or sustain the business. 

How do you know if it's time to get started on hiring? Here are six signs it's time to hire your first employee.

This article is an excerpt from An Owner's Guide to Small Business Hiring (click to download the PDF).


It May Be Time to Hire if You...

  1. Need employees on day one for operations

  2. Turn away work because you’re overbooked

  3. Can’t find time to do paperwork or send invoices

  4. Lack time to pursue new business ideas or clients

  5. Need someone with specialized skills

  6. Want to grow your business to eventually sell

It's Time to Hire... Now What?

First, evaluate your hiring and personnel needs by asking these three questions:

  • What role will the employee fill?

  • How much help do I need?

  • How much can I afford?

Read more: 3 Questions to Ask as You Prepare to Hire

Then, get organized and know what you must do to comply with federal and state labor laws. Some of these steps include:

  • Getting an Employer Identification Number (EIN)

  • Setting up a payroll system

  • Registering with your state's new-hire reporting program

  • Getting worker's compensation insurance

  • Posting labor-law notices

  • Evaluating small business health insurance options

Read more: 8 Things You Need to Do When Hiring Your First Employee

Originally published on July 14, 2014. Last updated October 26, 2020.


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