It’s a great time to start a small business. Although many Americans feel pretty gloomy about the 2024 economic outlook, a majority think it’s primed for a rebound in the near future. Most Americans are already spending like boom times are back anyway, according to a recent study on spending habits.

One-man startups that could be looking to scale up in response to consumer spending may be wondering when and how to hire their first employee. There’s no easy, one-size-fits-all answer to this question. 

If you wait too long to hire that first employee, you could be putting them in a workplace environment of low morale because of missed deadlines and heavy workloads. If you hire them too early, you’re wasting money and time devising work to keep them busy.

Here’s when and how to properly hire your first employees.

Crunch the numbers

Start with the fundamental questions: Will hiring new employees help your business save money or generate more money? If you’re just starting out, increasing your business’ income is more important than saving money, but both are important. If you can’t firmly answer yes to at least one of those questions, hiring someone may not make sense for you right now.

Take your emotional temperature

Objectively ask yourself why you’re thinking of hiring a new employee. Is it because it’ll help you level up your business, or is it for more emotional reasons?

If you’re desperately behind, overworked, or lonely being the sole employee of your business, those are valid concerns, but they aren’t necessarily good reasons to hire someone — especially if your desperation leads you to rush your recruitment process.

If you’re hiring because your business simply isn’t bringing in enough revenue, it’s doubtful that the generative effects of bringing on a new employee will surpass their compensation. It might make more sense for you to enhance your cash flow through some lucrative side hustles to make extra money until your revenue increases.

Some common signs that you may be hiring prematurely or for the wrong reasons are that you can’t define a specific role for your first employee or you have very low standards for who you’ll hire. If you feel like you just need to get someone in the door, step back and think about why you feel that way and what your business actually needs.

Consider a co-founder

Your first hire doesn’t necessarily need to be an employee. They could just as well be a partner. If you come across someone who perfectly shares and complements your skills, values, and vision as a founder and entrepreneur, consider bringing them on board as a co-founder. Empowering a talented entrepreneur as an equal partner can often unlock hidden potential and put your business on the fast track to success.

Test drive a contractor

On the other end of the spectrum, you might want to take things slow. In that case, a contractor could be a great test case for what you need out of your early hires. 

The commitment to a contractor is limited and usually quite short — usually between a month and a year depending on the agreement. In that time, you can try them out in different roles and evaluate their overall performance. If they prove themselves to be a valuable asset, you can always transition them into a permanent full-time role.

You could also interview a freelancer. In general, freelancers work on much shorter terms than contractors. You could bring them aboard to work only on a specific project and conclude their employment when that project is finished.

Think skills, not job titles

Alongside considering what you want your early hires to do, consider what kinds of skills and experiences will enable them to excel in that role. The more specific you can be, the better. Make a list and target only candidates who check all the boxes.

Understand that hiring is a two-way process

You know why you want to hire your first employees, and you probably have a pretty specific idea of the skills and experiences you want those first employees to have. But during the interview process, don’t forget that candidates are evaluating you as much as you’re evaluating them.

Employees want to know that you have a defined role for them. Before you start interviewing, sit down and define the role you’re hiring for, including how you plan to measure their performance, the outcomes and deliverables that role will be responsible for, and the processes they’ll be expected to perform.

Think about the role on different timelines, too. How will that role work in the next year, and how might it evolve in the next two, three, or five years? For someone interviewing for a job, there’s no such thing as too much information.

Widen your hiring horizons

When you’re searching for that perfect hire, think globally. There’s elite talent all over the world, especially when it comes to qualified tech workers. If their role can be performed remotely, you could tap into serious savings, especially if they live in a country with public health care. Foreign employees also offer valuable insights into their local markets and can dramatically increase your business’ availability if they’re in a different time zone.

Consider tapping into youthful energy by hiring a promising college student. If the role you’re looking to fill can be performed by a recent grad or even a college intern, they could provide a huge amount of hustle and motivation, as well as novel perspectives and ideas that could be valuable to forward-thinking industries.

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