When Is It Time to Hire Your First Employee?

Posted on November 19, 2015 by in Tips & Tricks | 8 comments

When Is It Time to Hire Your First Employee?

Life as a freelancer can be pretty exciting. You get to kiss goodbye to your boss, choose your own hours, and pick the projects that interest you the most – plus you’ll probably earn more, too.

However, as time passes and you secure more clients’ business, you might start to feel like you’re chained to your desk – in the same way that an employee is.

That’s one of the main problems of being a one-man freelancing operation: you are your business. Without you, it doesn’t function. Take a day off, and your business grinds to a halt. And that means no income. This shouldn’t come as a surprise, though; after all, we freelancers knew what we’re letting ourselves in for!

When you no longer have to worry about earning enough to put food on the table, those with grand aspirations may start to think about growth. Many freelancers are restricted by the fact that there are only so many working hours in the day – and do you really want to be working round the clock?

It’s at this point that you might feel as though the standard, one-man freelancing business model is not for you anymore – you’ve outgrown it. To continue expanding your business, you’re going to have to hire someone.

In doing so, you transform your humble freelancing business into a fully-fledged creative agency. This allows you to take on more work, plus it gives you the opportunity to market yourself in different ways.

Of course, taking on your first member of staff – whether in a freelance capacity or as a full-time employee – is a daunting step. For a start, it results in a drop in profits, for the short-term at the very least. If you’re looking to earn the big bucks, however, it’s a step you have to take.

In today’s post, I want to talk some more about this freelancing conundrum, as I discuss when the time is right to hire your first employee. Whether you’re a designer, developer, or writer, these points should still hold true – and even for those of you who freelance a million miles away from the world of WordPress.

1. You Have the Money and the Workload

This one should be fairly obvious: I wouldn’t even consider hiring my first member of staff until I was confident I had enough money coming in to cover my hire’s costs. If you don’t have a regular income – or your income fluctuates wildly each month – then you face the prospect of being left with little to no income yourself (or even negative income – yikes).

You should also apply the same logic to your current workload. If you commit to paying someone for, say, 40 hours per week, you will have to make sure you have enough work to delegate to your new team member. Fail to do so and your new recruit will be left twiddling his thumbs, and you will be left out of pocket.

2. You’re Turning Work Away

Your early days of freelancing will be spent trying to secure enough business to make ends meet. At some point, however, things will change, and you’ll find that you have too much work on your plate – admittedly a nice problem to have. This is an excellent opportunity to increase your rates, but you still might have to turn some work away due to a lack of time.

Turning work away is probably the biggest green light that it might be time to hire someone. By expanding your business’s capacity by hiring support staff, you no longer have to keep turning business away. More capacity allows for more clients, and that means a healthier bottom line.

3. You Want to Be a Business Owner, NOT an Employee

You have your own clients, your own branding, and you make a profit; that already makes you a business owner, right?

Well, yes and no. Don’t get me wrong; freelancing is a perfectly valid business model – and one that I employ myself. However, as any one-man operation will tell you, as well as being the business owner, you’re also the business’s only employee.

In other words, as a freelancer, you’re kind of in limbo between business owner and employee. If you started freelancing to escape the drudgery of your old 9-5, this is quite a depressing realization.

At some point, many freelancers realize that, to take the next step, they need to achieve a level of automation. They want to have the ability to step away from their business, and for it to still function without them.

Of course, the only way to achieve this is to hire additional team members.

This gives you the opportunity to take a break from your business while still collecting the profits – you can leave your new recruits to handle your outstanding workload. In my opinion, being able to make money without doing all the work is when you can make a clear distinction between being a business owner and being an employee.

4. You Don’t Have the Time to Do It All Yourself

Many freelancers don’t just complete a project then wash their hands of it. To develop a recurring base income, many freelancers will offer ongoing support after completing a project. Think of a WordPress developer offering a couple of hours per month of website maintenance for a fixed monthly fee.

Now, at first, that recurring income is a great way to break the feast-or-famine cycle. However, after building twenty- or thirty-something websites, those maintenance hours really start to stack up. It may get to the point where you haven’t got enough time on your hands to complete your bread-and-butter development jobs.

Faced with this scenario, many freelancers will let their ongoing support commitments fall by the wayside. This, of course, is hardly ideal if you want to maintain a beneficial relationship with all of your former clients.

If you just don’t have the time to continue supporting your existing client base, perhaps this is telling you that you need to hire someone else to cover this area of your business.

5. You Want to Open New Doors (Synergies)

Many tasks that freelancers do, while distinct, are also somewhat related. For example, if you work as a freelance developer for a well-established client, it’s not outside the realms of possibility that the client would want to hire a freelance writer and social media manager, too.

Perhaps you get the same requests from clients all the time – excuse me, would you be able to work on my website for 5-6 hours per month to make sure it’s properly updated and all the maintenance tasks are taken care of?

Rather than continually saying “no,” perhaps you could see this as an opportunity for you to expand the services you offer. And, even if you don’t have the time or skills to perform the tasks in this new area, you can always hire a specialist.

In doing so, you give yourself the opportunity to market your business in a completely new light — as a comprehensive, all-round service. This will appeal to a lot of clients, especially those who want to be as hands-off as possible. In other words, this new marketing ploy could help you secure more clients, or to charge a higher rate.

6. Your Profits Have Plateaued

At some point, and often following a period of rapid growth, all freelancers will experience a plateau in their business profits. Month after month of growth suddenly grinds to a halt, and nothing you do seems to take you to the next level of profitability.

When faced with a stubborn plateau, often the solution is staring you in the face. It’s time to bring in someone new to help drive the business forward.

Hiring a skilled staff member can help break a plateau and increase your bottom line in numerous ways:

  • You increase your business’s capacity, giving you the opportunity to start prospecting for new clients.
  • A new face can bring fresh ideas.
  • There are different marketing opportunities for a “team” compared to a one-man operation.
  • You can expand the services you offer.
  • You can pocket a markup on the work done by your staff.

7. You Meet the Right Person

Sometimes hiring someone might not even register on your radar – until you just happen to meet someone with the right skills, attitude, and credentials to enhance your business. This is one of the major benefits of attending WordPress conferences – or the major events in your field of work.

You really never know what’s around the corner, and it pays to keep an open mind so that you don’t let a great opportunity pass you by.

Final Thoughts

While there are lots of indicators that the time is right for you to hire your first employee, the truth is there is no perfect time. Big business decisions like this always carry some degree of risk, so it pays to be prudent and proceed carefully.

If you’re at the point where you’re contemplating hiring someone, the timing probably won’t be far off – you’ve obviously realized there is at least some business need to grow your team. In such a scenario, my advice would be to consider a trial expansion by hiring someone on a freelance basis.

Hiring a freelancer gives you the opportunity to test out an individual with minimal risk, as you don’t have to commit to a long-term contract. If the trial goes well, by all means, offer that individual more work – until eventually, they work for you full-time.

And also remember: although it’s important to get the timing of your first hire right, it’s probably more important to hire the right person. If you’re faced with a weak pool of applicants, don’t just plump for the best of a bad bunch. Take your time, and wait until you find a person that’s the right fit for you and your business. Good luck!

Do you have a team of staff supporting you? When did you know the time was right to make your first hire? Share your thoughts in the comments section below!

Article thumbnail image by Sentavio / shutterstock.com

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8 Comments

  1. This, is a great article, which I look forward to reading in more depth as this is exactly where I’m at right now. However, would you mind editing all the instances where you say “one-man operation” etc to “one-person”? Otherwise it’s kind of insulting to all the awesome women freelancers out there.

    • I’m thinking you got to the first time the author wrote One-Man and something snapped before you rushed to comment. One-Man has been a figure of speech for years and you probably know that. It’s not intended as sexist and makes absolutely no difference to how the world think of all those ‘awesome women freelancers’ out there.. simply the way things are said.

      Read the rest of the article. It’s actually very good.

  2. As a freelancer who has struggled with cash flow issues most of my career hiring someone has always been a challenge. I’ve opted to go with freelancers on a project by project basis and always get a deposit from clients to cover their costs. This way I’m never in the negative on a project.

  3. This is the place I’m in currently. And yes, a VERY GREAT “problem” to have. For me, my workflow ebbs and flows, like it does for most freelancers. But it’s been flowing steadily upward for the past 2 years straight. And I love it!

    But it is overwhelming. I’m taking next week off. Not because it’s Thanksgiving, but because if I tell my clients I’m on vacation, it just may stay quiet enough for me to tackle a massive writing project for a client and make my deadline.

    I like staying a freelancer though. I don’t want the downsides of having to hire full-time employees. Benefits, legal requirements, payroll… No thank you – that feels too much like a “real job!” 🙂

    For me, I’m building a “virtual agency…” Me at the helm and handful of subcontractor freelancers with various skill sets that I can bring in on projects. Some have complementary skills that help round out what I don’t do well. Some have similar skills and can relieve my workload.

    The challenge I’m having is finding someone who understands the business of my clients. It’s complicated B2B high tech language that most people don’t understand well enough to help me with content projects. At least not at a rate I or my clients can afford on a regular basis.

    Trying to find someone who’s eyes don’t cross when talking about BIM, GIS, FM, CAD, IWMS, CAFM, etc., is hard enough. Trying to find someone who understands these things AND is a good writer – AND who is willing to work for $50-$60/hour – that’s my challenge.

    My biggest value to my clients is that I grew up in these tech industries and have been marketing these technologies for 25+ years. Trying to find a “mini me” with the industry knowledge to help with the biggest part of my job (content) is where I’m stumped.

    I found someone once who claimed to have the knowledge, but failed miserably. It cost me money with my client (and I’m lucky I didn’t lose them), and I’m left feeling a bit gun-shy.

    If you’ve been in a similar situation and found a way through it, would love to hear all about it. Thanks! 🙂

  4. Haven’t met anyone that would care about my business like I do.. thus I’d still find myself so attached to a project as if I’m still doing it all by myself.

  5. I think you may have bugged my office!!! This is EXACTLY where I am personally with things and this article has come at the perfect time, thanks!

    Trust is without the number 1 priority in my case as I have worked hard to build a brand and business where clients trust what I offer.

    I feel one bad decision with hiring someone could make matters worse, so it’s quite a scary challenge for a freelancer to make.

  6. Hi there, let me first thank you for your post. It is probably the most perfect time for me to read this.

    I have been in online furniture bussines here in Slovenia for some years now and there were already many times when I thought I need someone to go on board.

    The main obstacle for me as a freelancer, to make a decision is actually simple. Calculation doesn’t match.

    I am working only (or mainly on SEO an organic approach) and we all know it takes time to make a profit out of it.

    First I had to do it for myself. It took three years for that.

    Now I am having customers and becaue my products demand negotiation and one on one discussion wiht customers, I had to develop a team of sellers, that actually do the revenue.

    Getting additional marketing help is tough one. Specially if you are looking for a freelancer.

    He will work, but he want’s to get paid. But at least with my product (funtiture) there is app. 2 to 3 months time before lead actually pays.

    So these 2 or 3 months would be again my risk.

    And…. additionally to this… many marketerees who wanted to work, turns out that they only need few extra bucks aside. You cannot find a good and reliable freelancer that way.

    Some of marketeers, when they joined, even turned into sellers – because there is not so much risk. No work, just making conclusion with customers that marketing brings.

    I guess my level of online work is simply just not high enough to employ anyone. So I am slowly establishing connections and relations with freelancers with no promises – me helping them achieving their goals and they help me achieve mine.

    Regards, Matija

  7. Your article comes at the right time! I already work with freelancers as a backup when the workload is getting to much. I already overthought the possibilities of hiring employees but this doesn’t feel like the good timing for me right now.
    So until the timing is right I’ve started working with job-interns, this way I can teach (what I like to do) and after a short time, hopefully profit from the lessons the intern has learned. It’s a lower cost then a fulltime employee. And the only downside is that I’ll have to make them professionals myself (this takes time).
    What I’m hoping to get in return from an intern? I’ll hope to learn where to look for in future employees, keep track of the latest technologies, learn from there creativity and enjoying the time teaching (sharing knowledge makes you a better person in my opinion).

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