As an entrepreneur, taking the leap to hire your first employee is a big deal. From that moment forward, you are not just responsible to your customers and your vision, but for the livelihood of another human being (and all the people they financially support).
Before you take this step, there are three questions that you must answer.
Just being busy is not a strong enough signal that it is time. You could be too busy because you are not working smart and are spending your time working on the wrong activities.
The most important signal is that you are losing money by working alone, either because you are too busy to give good customer service or you are turning away clients.
Another good reason to hire an employee is because you lack specialized skills. The first person we paid at OZÉ was a developer since neither of our founders knew how to code.
There is an important distinction to remember though… If those specialized skills are core to the ongoing operations of your business, hire someone. If they are more time-bound, for example designing a logo, you are better off working with a contractor.
Even if you are ready for an employee, if you cannot pay them, then you cannot hire them.
So how do you know if you can afford them? Look at your historical cash flow.
How much excess cash are you adding to your balance each month?
Is the average relatively stable and increasing each month?
Is it enough to cover a salary (and benefits)?
If the answer to all of those questions is “yes”, then congratulations! Go for it!
If the answer is “maybe”, and the role you are hiring is in sales, you can hire on a profit-sharing or commission basis.
If the answer is “I don’t know!”, you should download OZÉ so that you can track your cash-balance on the go.
This is the most important question.
This person will have a key role in shaping your company’s culture, processes, and brand. So, above all else, they should believe in your vision and be ready to work hard towards it.
It’s also important that they be a “self-starter”. Entrepreneurs often overlook the time it takes to manage an employee. You can reduce this burden by choosing someone who can make and execute on their own work plan.
So now that you know that you need an employee, that you can afford them, and what you are looking for, it’s time to go out and recruit.
Written by Meghan McCormick, Co-founder & CEO of OZÉ, a mobile platform that equips small business owners in Africa to make data-driven decisions to grow their business and access capital. Before founding OZÉ, Meghan served as Community Economic Development Volunteer in the Peace Corps in Guinea where she co-founded Dare to Innovate and scaled it to be Francophone Africa’s most active small business accelerator. She’s spent her career trying to figure out how we can use design, entrepreneurship, and public-private collaboration to solve intractable global problems. She holds an MBA from the MIT Sloan School of Management and is pursuing an MPA from the Harvard Kennedy School of Government.