Many small businesses that start, don’t make it past their first year. In fact, 20% are said to fail within year one. By year five, 55% have failed.
If you are one of the few to get past the growing pains of a small business, one of the first milestones you’ll reach is hiring your first employee.
Congratulations! This is a great accomplishment.
This is one of the first steps to growing your business, and although you may think you can, you can’t do it all by yourself.
If you’re unsure whether or not now is a good time to make your first hire, don’t worry many feel the same way, and we’re here to give some indicators that it might just be time to expand.
Here's when you should hire your first employee:
1. You’re turning down work
This is one of the most common indicators that you’ll need to hire soon. Usually if you’re too busy, booked, and stressed as a result, you’ll have to start saying ‘no’ pretty often.
This is why getting more work than your schedule allows for can be both a blessing and a curse.
On one hand, you have a good stream of business so your marketing efforts are paying off, but on the other hand, turning down work means less money in your pocket, and less opportunities for referral business.
2. Customers are complaining
This can be a result of many things: overbooking, long wait times, poor responsiveness, a drop in quality, the list goes on!
Customer service plays a big part in whether a company grows, stays stagnant, or simply goes out of business.
By having a ‘customer first’ mentality, your business will definitely expand, and you’ll start seeing happier customers very quickly.
Also, many times a customer won’t even care to complain before deciding to find someone else, so consider yourself lucky that they did to begin with. If you begin to see unhappy customers, ask yourself if the problem can be mitigated with an extra hand.
3. You’re getting asked to provide more services
Early on in your business, you may have to limit the number of services you provide to ensure high quality results. However, there’s a good chance that you’ll end up getting asked to do something that you haven’t yet.
This is a good thing, a sure sign of upcoming expansion.
Finding new revenue sources usually means it is a safe time to grow your business.
If you feel like you won’t be able to keep up with the wide range of services that many trades offer, this is a great signal to seek help.
4. You have no time to do financials and bookkeeping
Early stages of a growing service business usually leads to late nights, early mornings, and tightly packed schedules. One thing you can also expect, more paperwork.
It may seem easy to just push this to the side and continue with your work responsibilities, but our best advice is don’t let it pile up!
There should be a certain time in the day you dedicate to taking care of any clerical work you may have.
If you don’t have time for any office work, this is a sure sign that you’ll need to hire help.
Your accountant will appreciate this too!
5. There is a skill you don’t have
Similar to number 3, you may start getting asked to do jobs you simply don’t have the skillset for. Rather than take more time away from your current work to self-teach, consider hiring someone to do that already has the specific talents.
It’s alright to admit your weaknesses, and hiring for them could just be your answer.
Whatever you do, don’t let your ego be the reason for stalling your business’s growth.
6. You don’t have time for breaks or vacation
You may be thinking, do I really need to take vacation? Will I be able to grow when I’m not working?
Well, yes and no.
While a break or vacation isn’t necessary, taking time to reset and not focus on your business can actually be helpful. It may just be what you need to get a spark back that may have gone away over time.
One of things that also results from you not taking time away is burnout. Most people think it won’t happen, but an alarming amount of small business owners admit to more stress when starting a business. In fact, most do.
61% of entrepreneurs have higher stress levels than before starting a business, and 60% struggle to take time off. Don’t let this be you!
For those in dire need of a break or vacation, this is a great time to hire another employee.
7. You’re missing out on work opportunities
One thing many business owners underestimate is how essential a fast response time is. Most customers have grown accustomed to quick answers, and if you’re not able to provide them, they will simply find someone else.
As a matter of fact, 93% of customers expect to have a response within a day. Even more alarming, 60% expect a response within 4 hours.
Improving response time is something that is so simple to fix, yet many people will overlook it and attribute loss of business to other, existential reasons.
By adding an employee, this can allow you, or someone else, to stay on top of customer relations and ultimately improve your quality of service.
8. Jobs are taking too long to complete
One thing you may begin to see as you grow is opportunities for larger jobs. This, once again, can be both positive and negative.
The downside can be long jobs, longer hours, and could ultimately result in you having to turn down work.
If you begin to see some of these problems popping up continuously, then that is definitely a red flag that it’s time for a hire.
In theory, by adding another worker you’d be able to cut job times in half, but usually you can expect to save at least 25-35% of the time you’d usually spend on a job.
Getting this time back can bring many benefits including catching up on your schedule, delivering services in a reasonable time for clients, more time for marketing, more time for office tasks, and the chance to take well-needed vacation time.
9. You’re booked out several weeks or months in advance
Now, this one seems like a benefit to growing your business, but really it only is for you.
A majority of customers expect their jobs to be completed in a timely manner, and being overbooked doesn’t help. Also, when you’re giving estimates the worst thing to tell your clients is that the work will be done a few months from now.
A simple fix for this is hiring help.
You’ll be able to get back time on your schedule, and focus on the things that are most important when it comes to growing your business.
10. The quality of your service is falling
The number one priority for customers is to receive high quality service, every time. It’s non-negotiable, and it’s a clear indicator whether a business will be around for a long time, or be short lived.
If you’ve noticed an increase in callbacks, complaints, bad reviews, or all of the above, it probably means that your quality is falling.
This could be for many reasons: lack of motivation, small time tables to complete work, overbooking, and many others.
The first step is to be grateful your customers are telling you that your work can be better.
The next is actually improving it.
Hiring new talent can be a great way to improve your service and allow you to fix your mistakes, without jeopardizing future work.
11. There are bigger job opportunities that you can’t fulfill
One of the worst feelings for someone in the early stages of their business is saying ‘no’ to work because you don’t have the means to handle it.
We’ve all been there, but instead of taking no for an answer, you can be proactive in the hiring process to assure you can say ‘yes’ when the opportunities present themselves.
An extra hand may be all that you need to land those bigger opportunities you’re looking for.
It’s no light task to hire your first employee. You can expect more responsibility, possibility that they aren’t good at the job, and most obviously, they may quit for a different opportunity.
This is all good to think about and you should consider this during the hiring process as well.
If you’re on the fence about growing your team, review the red flags we shared, they should give a telltale sign that it’s time to hire.
However, always remember to only hire when you can afford it. Make sure that you have enough work for them, and that they’ll truly help you reach your goals.
Hiring a great employee can be the best opportunity for growth, but hiring a bad one can inversely be the worst.
Need interview questions? Check out our list of 100 interview questions to ask an HVAC technician.
Want tips on finding top talent? Review our 10 tips for finding the best HVAC technicians.