1. Be certain that you need an employee. Some small, service-oriented companies - think plumbing or freelance writing - get by perfectly well on the efforts of the owner alone. If your business plan doesn't call for growth, and you are perfectly content with your business the way it is, there may be no need to hire your first employee or employees.
2. Change your sole proprietor's mind-set. Some owners of small businesses can't effectively delegate responsibility, because they think of the company as their baby. If you want to grow, you have to understand that you can't enjoy complete control over the business in the same way that you used to. Reorient your thinking to embrace the prospect of outside help.
3. Define a compensation strategy. Look at your cash flow to decide whether you can pay a regular, full-time employee on an ongoing basis. If your cash flow is unstable, have you considered hiring someone part-time? How about creating a commission-based compensation strategy? How about giving an employee a small share of equity in your company, instead of a salary?
4. Define the job role(s). For a long time, you may have performed every task that your budding business required, and worked overtime. Your first employee can't be expected to be like you. Define specific and limited tasks and responsibilities for the position before the process of hiring begins. Be realistic in your assessment of what a new employee can or should do.
5. Follow the law. Take this opportunity to file all the forms required by the IRS as well as federal and local government.
6. Advertise. The trick is to post your help wanted ad in the right location. If you run a writing business, anyone with access to the Internet can work remotely for you and you might want to advertise on a large site such as Monster.com. On the other hand, if you're a plumber, you need someone local and would be better served advertising in local outlets, such as newspapers and bulletin boards in your city's Department of Labor office, to reach the right audience.
7. Organize resumes. If you've written an appealing job description, you can expect to receive lots of resumes. Organize resumes into three categories: prospects, maybes and nos.
8. Interview. Get in touch with your prospects and invite them to interview. This is one of the most important stages in hiring your first employee, because this is the first time that you're having an interactive conversation with a potential worker. Here are three sub-stages of an interview:
- The phone interview. Before arranging a sit-down meeting, spend 10 to 30 minutes speaking with the interviewee. Your goal isn't to make a decision, but to eliminate the possibility that you have no chemistry with the prospect and to ensure that your potential hire is still interested.
- The sit-down. Now that the interviewee has passed the phone test, it's time to meet face-to-face. This is your chance to evaluate the prospect's professionalism in dress, communication style and preparedness. It's also the interviewee's chance to discuss previous experience and qualifications for the job in-depth. After the interview, check references to determine how well the person did at previous jobs and the reasons for leaving those positions.
- The follow-up. No matter how confident you are in an interviewee, don't make the job offer without conducting a follow-up. This can be as comprehensive or as cursory as you like. For example, you can run a background check, ask for another interview with a different focus or both.
9. The job offer. Now that you're sufficiently impressed by the interviewee, it's time to make the job offer in writing. Once the interviewee signs off on the letter, you have your first employee.
10. Orientation. Don't relax now that the offer letter is signed. It's your responsibility to give your first employee an orientation to your business.
