Attracting talent

Hiring your first employee – a playbook for small business owners

Hiring an outstanding new team member just got easier! We address all the important questions, give you steps to follow and share invaluable hiring tips from successful startup and small business owners.

Hiring your first employee – a playbook for small business owners
Listen to this article. Audio recording by
Brook Fischer

It's time to hire your first employee, and that's exciting. 🎉

But with that excitement can come some first-hire jitters, especially if you don’t have any hiring or HR experience. And what about standing out amongst more well-known businesses whose reputations precede them?

Hiring your first employee indeed takes careful planning, preparation and execution – and we’ve got the hiring playbook to get you there.

We'll share the three most common questions startup and small business owners ask themselves before hiring their first employee and insights from those who've been there before – including our very own Thomas Moes (co-founder of Homerun). We'll also share the steps you need to follow and practical tips to help you hire with ease.

Table of Contents

  • <a href="#3-questions">3 key questions (with answers) about hiring your first employee</a>
  • <a href="#10-steps">10 steps to hiring your first employee</a>
  • <a href="#Choosing">Choosing the right moment to hire</a>

<div id="3-questions">3 key questions (with answers) about hiring your first employee</div>

If you're the owner of a startup or small business, you're going to encounter a lot of firsts. One of those will be finding and hiring your first team member!

Before you start hiring, ask yourself these three questions to get yourself set up for success.

Question #1: How do I know when to hire my first employee?

There are some obvious circumstances that indicate it's time for you to hire your first team member. Homerun's co-founder Thomas shares that you might find yourself:

  • Overwhelmed by the amount of work you have
  • Annoyed with the type of work you’re doing
  • Unable to keep up with the demands of the business
  • In over your head lacking expertise in specific areas

If you’re in one or more of these situations, he says, “That might be the right time to hire your first employee.” Bottom line: If you’re consistently busy and you have to turn some clients away then it’s time to reevaluate your current setup.

Of course, you must be financially ready (so hiring may depend on your business's cash flow💰) and you should already have a business strategy in place. Having a well-defined strategy will help you identify the exact skills and expertise you need in your first employee and keep you on track.

Finally, you have to be prepared to search for, interview, hire, onboard and manage your new team member.

📣 If you’re looking for resources, Homerun has everything you need to help you get started with hiring.

💡

Super advice from small business owners

We asked some small business owners about the moment you should take the leap and hire your first employee. Here is what they had to say:

Kyle Fretwell, owner of Arwell Digital and TruckInfo.net shares, "When starting/running a small business, it always feels like there's more work to do than you can possibly handle. That's usually counterbalanced by your cash flow situation though so it's always scary committing to paying a salary. That said, once you have 1) clearly defined projects you can pass off to another individual and 2) high-leverage growth projects you could be tackling as a founder, you should be looking to hire as soon as you can. I've waited too long in the past because I was worried about the cost of hiring but a few months afterwards, the businesses had grown because I was able to focus on my time on more high-leverage opportunities."

Tory Jon, Founder of Camper FAQs notes, "You can be as efficient, multitalented and driven as possible and actually hinder your business with your unwillingness to invest in your first employee. When you get to the point where you are turning away opportunities because you are spread too thin, it’s time to find a budget for a freelancer at the very least. When that helps you grow, look at investing in a part-time employee and go from there! The goal is to get to a point where your vision for your company can be your main priority, and the daily operations can be taken over by employees who can lend that singular focus to those tasks."

Naman Nepal, Founder of Cove Commerce, who recently made his first full-time hire, points out, "As a growth marketing consultant, I operated on a lean budget and initially hesitated to commit to the expenses of hiring a full-time employee. I worried about the financial impact on our cash flow and profitability. I closely analyzed financial projections and determined the potential return on investment of bringing in a new team member. I considered factors such as increased productivity, the potential for business expansion and the value of having specialized expertise on the team. With better data-driven insights, it was a no-brainer for me to bring someone on board, giving me additional confidence."

Question #2: What do I need to know before hiring my first employee?

Hiring your first employee requires careful planning and prep to ensure that you find the right person for the job and that you're complying with local laws and regulations.

There are understandably a lot of important logistics that go into hiring. First, you need to understand the cost of hiring beyond the employee's salary, such as payroll taxes, benefits and insurance.

This is where things can get tricky and why we recommend speaking to the right people (HR and legal experts) to figure out your responsibilities as an employer.

If you decide you want to hire someone to work with you remotely, you'll still need to ensure you're complying with the employee's local labor and tax laws. For remote and hybrid teams, a service like Remote is a good solution for compliance. (For example, we’re based in the Netherlands and they handle payroll and benefits for our remote team members in Spain and the UK.)

Hiring admin stuff aside, there are some important things you need to determine before you look for a new team member – like who is best equipped (and motivated) to do what.

In the beginning, Homerun's co-founders Thomas and Willem did all of the marketing and design while our third co-founder, Bob, was in charge of tech and finances. And together they all did customer support.

Thomas shares his two cents 🪙 🪙 on this: “When you’re starting out, it can be good for you and your co-founders to try most of the work yourself. I actually started doing the admin and taxes simply because I raised my hand when assigning tasks. However, we pretty quickly found out that I was horrible at it (forgetting to pay invoices and stuff), so Bob took over since it comes easy to him, and he’s been doing a great job ever since!

When you try doing different things, this helps you find out:

  1. What you’re good at
  2. What you like doing
  3. What you’re bad at
  4. What you don’t like doing

It also gives you a more in-depth understanding of the work to be done. This helps you with the hiring process; because you know better what to look for in your first hire.”

Even if you’re currently a team of just one, two or three, you need to consider what your company culture is like (or what you aspire for it to be) and the type of person that would enjoy working with your team. Think about the values and work ethic that are important to your company and prepare yourself to look for candidates who share those.

Homerun hiring software's founders and their first employee in front of a house in Scotland.
March 2015: Thomas, Willem and Bob with their first hire Jasper (seated) in Scotland.

💡

More helpful advice!

These startup and small business owners have gone through the process of making a first hire and have a few more tips for you:

Catharine Montgomery, Founder and CEO of communications agency Better Together, recommends "evaluating your cash flow, revenue projections and profit margins to ensure that you can afford to pay a competitive salary, as well as any benefits and taxes. In addition, you need to make sure you have a reliable stream of revenue and a solid client base to support the ongoing cost of the employee. Without that, you run the risk of having to lay off the employee if business slows down. Planning ahead and ensuring your business is financially stable before hiring your first employee will set you up for success and provide a stable foundation for growth."

Young Pham, Co-founder of BizReport, notes, "For me, there are three things you must always consider before you hire your first employee. First, is this person resourceful enough to do more than one task? As I found out, your first employee will typically be responsible for a wide range of tasks even though they could be hired for a specific role. It really helps to know that they have the resourcefulness to adapt to these changing roles. Secondly, consider if you have a budget to competitively pay this employee without changing your growth strategy. And thirdly, assess if you have a decent enough organizational structure that will allow the new employee to fit in and understand exactly who they report to and how."

Maria Harutyunyan, Co-founder and Head of SEO at Loopex Digital, reinforces the importance of aligned values and work ethic in hiring. According to Maria, "It's not just about the resume and experience anymore! I learned the hard way that a mis-hire could really bring down the whole team, so I developed a rigorous hiring process that digs deep beyond the surface-level qualifications. With a thorough set of behavioral questions, team meetings, and skills tests, I ensure that every new employee brings not only experience but also the right personality, values, and work style to succeed in our workplace. Through this process, I was able to hire an SEO specialist who not only had the skills and experience required for the role but also shared my company's values, had a positive attitude, and worked collaboratively with the team. This led to a boost in team morale, increased productivity, and better outcomes for our clients."

Question #3: What do you need to hire your first employee?

To hire your first employee with success and ease, you need a plan of action and the right tools to execute it. Thankfully Thomas came up with a plan that you can totally copy and use. 🙌

Thomas’ recommendations for hiring your first employee

1. Create a list of all work to be done (both current work and future plans)

2. Assign current team members to each item (where it makes sense)

3. Identify unaccounted items (what’s currently falling through the cracks?)

4. Look at your budget (how much room do you have for hiring?)

5. Identify roles that group multiple tasks (Operations, Marketing or Admin for example)

6. Research job descriptions for these roles

7. Publish your first job using Homerun

Publish your first job post for free

Create an engaging job post in minutes. No design or coding skills needed.

Learn more

Simple and straightforward, right? We can't stress enough how important it is to have a great-looking job post and a memorable career page because it helps you to stand out in a sea of startups and other established well-known companies.

Here's one part of a sleek and informative job post from one of our customers, Verve, complete with photos of their cool workspace.

Verve

Check out Verve’s full job post and find even more job post and career page inspiration on our Showcase page.

👀

Ready for your close-up?

We spoke to small business owners about standing out as an employer and they explain what you can do when you're a little fish in a big pond:

James Wilkinson, CEO of Balance One, shares, "When hiring your first employee, you need to know that you are an underdog in the highly competitive labor market. Many job seekers would prefer working for a bigger, more established company than a startup or solopreneurship. This is because of the perception of job security and higher pay with bigger companies compared to brands that are just starting out. To compete effectively for talent against these more established companies, you need to invest in and differentiate your employer brand so that it’s more attractive to active job seekers. Create an employer brand that prioritizes inclusion, diversity, fair compensation, workplace safety and dignity, and career growth to attract and retain the right talent for your growing business."

Ryan Mckenzie, Co-founder and CMO of Tru Earth confirms, "I found that one of the most difficult things was getting my job posting noticed by qualified candidates. One way to help stand out in a sea of bigger businesses is to write an engaging job post and highlight the unique benefits your company offers. Also, be sure to include detailed instructions on how to apply and what information the candidates should submit."

Ben Brading, Managing Director and Founder of AquaSwitch, says the biggest learning from his first hire was "how you go about selling the role." He shares, "At first, I started advertising as if the role was like any other, but didn't get much traction. Instead, promote the unique opportunity to be there at the ground level of a small but growing company. A first-time role at a small company can be very attractive to new candidates, especially if there are share options involved."

Musnad E. Ahmed, CEO and Founder of SkyTech Solutions, adds, "By accentuating the unique benefits and opportunities that your business can offer, such as a close-knit team or prospects for growth and advancement, you can attract high-quality applicants who are an excellent match for your business."

Hiring tips like these and the right tools can help you get ahead in the game. You can use one of Homerun's hiring templates to easily create a great-looking job post with your company logo, build a stellar career page, put together job application forms, track applicants, schedule interviews and more all in one place.

📣 Learn how to make a career page that attracts talent and check out these outstanding career page examples

<div id="10-steps">10 steps to hiring your first employee</div>

When hiring your first employee, of course you want to get everything right and knock it out of the park. ⚾️ But first you need to make sure you've covered all the bases.

Here are 10 steps you can take to get set up, find and hire your first employee:

⚖️

Important Disclaimer

We are not legal experts. If you are hiring your first employee, we recommend you consult an HR specialist or lawyer in your area for any laws and regulations specific to your country/state/city/situation.

  1. Register with the correct government agencies. (This is where the experts come in!👆) For example, if you're in the U.S., you'll need to find out whether you need a state or local tax ID, also known as an Employer Identification Number (EIN), to set up payroll taxes and comply with other legal requirements. If you're in Europe (like us), it will entirely depend on what country you’re in and whether you’re a member state in the European Union. No matter where you are, be sure you’re properly registered.
  2. Set up payroll. Choose an in-house or external service for paying your employee. Depending on their status (contractor, full-time, part-time, fractional) and location, you may need to calculate and withhold taxes and/or set up direct deposit. You always need to make sure you're keeping accurate records.
  3. Create an employee handbook. An employee handbook will outline your company's policies and procedures and will help ensure that your new team member is aware of the expectations and guidelines for working at your company. Include how you track time off for vacation days, sick days and other types of leave. (We use an HR tool called Humaans for that.)
  4. Establish your benefits package. If you plan to provide benefits such as mental healthcare support, a learning budget or a 4-day work week, you’ll need to set those up and ensure that your new team member is enrolled. Your benefits should be a reflection of what your team values and cares about.
  5. Create a job description. If you've answered the three questions above about hiring your first employee and followed Thomas’ recommendations, you've essentially got your job brief. Now that you have a clear idea of what you need, you can create a clear and engaging job description that outlines the responsibilities, skills and qualifications required for the role. Learning how to write a job description that attracts talent helps you save time and find qualified candidates, as does using one of our many job description templates.
  6. Nail your job post. If you want to stand out, you need to get creative with your job post. Add some fun, authentic photos of the current team and your office (if you work together in person), a Spotify playlist of your favorite tunes to work to, or a video of you describing the role. You can hit the ground running by using one of our beautifully-designed job post templates that you can customize and publish in minutes. Once you’ve nailed the job post, you and your network should share it in all the right places – on LinkedIn, in Slack communities, select job boards, etc.
  7. Review applications. As applications start coming in, you’ll review them carefully to pick out the most qualified candidates whose values are aligned with yours. Wondering how to get that information? Simply include the right questions in your application form to find out.
  8. Conduct screenings and interviews. In-person and online interviews are great opportunities to get to know candidates better, ask more detailed questions and assess personality and skills. We recommend using the collaborative hiring method and letting candidates talk to your fellow co-founder(s) in interviews. This helps to manage candidate expectations, reduce hiring bias and aids in your decision-making process.
  9. Make an offer. Once you’ve found the candidate you want to hire, you can make an offer that includes salary, benefits and other important details. Be sure to communicate clearly (we put it in writing) and that all terms of the offer are understood.
  10. Onboard your new team member! Once the offer is accepted, it’s time to onboard the new employee. Provide any necessary training, go over the expectations for their role and get them started on new projects. Being available to answer questions and meeting with other team members is important to ensure they are set up for success.

<div id="Choosing">Choosing the right moment to hire</div>

If there are areas that you lack the time or expertise to tackle effectively, you’re going to need someone with a certain skill set or vision in order to move your business forward. Making the decision to hire someone is a key step.

Don't wait until it's too late!

These savvy small business owners share the struggles that you can skip by hiring at the right time:

Young Pham, Co-founder of BizReport, says that if you wait too long to hire, you run the risk of burnout. In his words, "When we started, there were only two of us. We were involved in the web design, the feasibility assessment, project management, and everything else needed to get [our] site up and running. While the first few weeks went on without any issues, we started feeling extremely tired and completely burned out. Overall productivity also declined significantly. At that point, we decided to get some help."

Riley Adams, Founder of Young and the Invested, says he finally hired his first employee when "I couldn't effectively manage several workflows simultaneously without neglecting others. I didn't have a big enough head to wear that many hats at the same time (which is saying something, because my wife regularly tells me how our sons' big heads come from me). The business suffered because of it." He continues, "To be honest, I probably waited too long to hire, reasoning I could handle all the business needs by myself. (I'd done it this far, why not a bit longer?) In doing so, I probably missed out on some extra growth I could have realized sooner."

Hiring your first employee doesn’t have to be complicated. Start by reflecting on your current and future business needs and how the new hire will fit into those long-term plans. Follow the playbook (which includes the most important steps of the hiring process) and you'll be on your way to hiring an incredible teammate who will help your business grow and thrive!

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About the author
Brook is 1/3 of the Homerun Content Team. With a background in education and journalism, she’s spent the past 18 years crafting and editing insightful content for small to medium-sized businesses. Her current favorite topics in the hiring space include employer branding and how to create a positive candidate experience. She lives in Toulouse with her husband, two sons and one sweet Staffy.

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