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Hiring your first employee is not an HR decision it is a rite of passage!

You’re up and running with your business, figuring out how to win and service profitable clients but never quite having enough time to get everything done, to grow as fast as you’d like.

Is it time to hire your first employee?

Can you afford to? Can you afford not to?

For so many nascent companies hiring their first employee is a massive step. It turns your business into, well, a business! All of a sudden it’s not you any more and the next step is likely to be employee #2, employee # 3 etc.

But the economics! Up until now the profits have been yours – and you’ve earned them. When employee #1 turns up they’re an extra mouth to feed, most likely the first mouth to feed, and you’re paying for it!

Cashflow hurts because employee number 1 will want to be paid at the end of the month but the clients you bill that month will want to pay you 30 days later, if not later still.

So profits and cashflow take a hit. Where, then, is the benefit of employee #1?

The person with the new job is not your first employee… it is you!

This is the real challenge of the first employee. They’ll be doing work that you used to do, so your role changes. In the extra time you now have available you have to add more value to the business  than it costs to hire employee #1.

And that’s the scary bit. Can you get out there and sell?

This is where you find out if you’ve got a business or not. If you can milk this opportunity and grow the top line and rely on the new guy to deal with product / service delivery (with your help, but not doing the job for them) then you have a business.

If you can’t make the most of the opportunity then say goodbye to employee #1, lick your wounds for a while, learn from the experience but try again in a few months or a year’s time.

Your first employee is not an HR decision, they’re a rite of passage

If you want to build a business from the ground up then hiring your first employee is a rite of passage, one of the phases you go through where the business takes a quantum leap forward.

You have to pass through this phase to get to the world beyond; a world richer in opportunity, challenge and reward.

Yes, your profits will dive and your cashflow will hurt for a while, be prepared for that, but if you get it right you won’t look back.

 

Michael
@diaryofanomb