Financial Readiness to Hire First Employee

Alright, so there’s a funny thing that happens in the small business world: the moment the workload gets a little too heavy, the mind jumps straight to, “Okay, that is it, time to hire my first employee.” And yeah, sure, it sounds amazing in the moment, right? For instance, the idea of handing off tasks, having someone there to help, and feeling like the business is finally “official.” You’re trying to do what you can to make your business into a total success, and of course, the more people on board, the better, right? Besides, employees are the best asset, too.

Besides, it has this milestone energy to it. Alright, so what’s so negative here? Well, then, once that initial excitement fades, reality sets in. But what? Well, hiring your first employee isn’t just picking a person and handing them a list of tasks. As much as people think it’s simple like that, yeah, no, it’s not. Actually, there’s a lot wrapped up in that first hire, especially the money side of things.

It’s Going to Cost More than Just a Salary

Which is actually the surprising part here for most business owners. Alright, so how? Why exactly? Now, yes, paying someone for their work makes sense. However, there is also a parade of additional costs that follow. So, you’ve got taxes, insurance, equipment, software logins, onboarding, training time, the “whoops, they made a mistake and now it costs money” moments, and while all of these might not seem like the biggest deal, well, they do all add up. 

Yeah, it all adds up pretty fast, too.  Just understand that hiring your first employee isn’t anything like paying a friend to help for a weekend. It’s a real commitment, and those added costs stick around every single month. 

The Money Needs to Make Sense First

Before hiring becomes a “yes,” the financials need to be clear. Now, that does make sense, and it sounds straightforward too.  However, none of this is remotely based on hope, guessing, or manifesting. Like, actual numbers that make sense long term, and so it might help to get a reality check from a CPA (accountant), as they can make the whole thing less stressful (and more realistic as well). 

They’re going to help you see the truth; they’ll help you see what’s actually sustainable for your business, so it’s better to know than to dive in and be in sheer panic later. 

A Good Month Doesn’t Mean You’re Financially Ready

For the most part, there’s a bit of a trap in feeling confident because of one amazing month.  Now, yeah, it’s impressive to have a good month; it really is. Now, with that part said, hiring someone means being able to pay them on the months that are slow, quiet, or stuck in “everyone decided not to spend money this week” mode (which seems to be getting more common). 

Everyone’s income needs to be stable, including yours, theirs, and the business’s overall. You absolutely cannot have a roller coaster and hope for the best; that’s someone’s livelihood you’d be putting on the line.