At Hired By Startups we spend most of time helping growing startups scale their teams.
Occasionally, however, we have the opportunity to work with a Founder hiring their very first employees.
First hires are vital in so many ways. Get it right and the startup could scale exponentially. Get it wrong and, in my experience, it’ll put the startup at least 6 months behind where it could have been.
The burning question for most startup Founders is when to hire their first employees so that’s what we’re going to explore here.
Here are 10 signs your startup needs to start hiring.
Turning away potential clients is usually (but not always) bad for business, particularly as a startup.
The problem is, being unable to take on new clients can often be a false positive.
Service businesses investing time into their clients are particularly susceptible to this as there’s only so many hours in the day.
We’ve experienced it ourselves at Hired By Startups. Proudly stating we operate on a 100% inbound basis and we’re always at or over client capacity.
It sounds great but it really isn’t. Whether you can identify it or not, resources have been spent attracting that prospect to you and to turn them away is a waste.
If you find yourself turning away new clients or hoping you won’t receive any more inbound leads or unexpected client projects it’s a sure sign you need to start hiring.
Constantly apologising is a big red flag, even if you might not be aware of anything going wrong.
Thankfully it rarely happens but it’s a real indicator we need to hire if I find myself, or my team, apologising to our clients throughout the day.
“Sorry for the slow reply.” “Apologies I missed this last week.” “I’m really sorry this is late”.
It’s something to constantly be aware of, if you’re apologising then you’re already aware you’re missing whatever expectations you or your client have set and that’s usually down to internal capacity and staffing.
So next time you find yourself apologising to a client, hiring someone to join your team might be the answer.
Similar to the constant apologies but a more obvious sign you need to start hiring is your clients are always complaining.
This isn’t always a staffing issue. Perhaps you need to better align client expectations, perhaps you’re promising too much or you’re working with difficult clients.
But if there’s a trend of client complaints you need to address why and it’s probably because don’t have enough people with the right mix of skills in your business.
Often a precursor to the previous two points, you know you need to hire when you’re delivering work which lacks quality.
Solo Founders often reminisce of the early days when every piece of work got their time & passion and there was a focus on doing a great job, rather than just getting it done.
If you find the quality of your work slipping, you need to start hiring and ensure you only produce great work.
The great trap many startup Founders fall into, particularly if that business is a service business, is they spend all of their time working in their business rather than running their business.
As Founder and CEO you’re job is to run the business and so if you find yourself spending all of your time on daily client related tasks you’re not fulfilling your role as CEO.
If you find yourself in this category, it’s probably time to build a team to handle the day to day tasks so you can focus on running and growing your startup.
This is something which probably every startup Founder experiences at some point, a feeling of generally being overwhelmed.
There’s an endless ‘to-do’ list, no matter which part of the business you think about there’s a long list of tasks, your inbox is overflowing, you don’t have a real view of your company’s financials, you know there are tax & reporting deadlines looming but you don’t know what or when they are, you have so much client work you don’t know where to start.
The good news is, you’re not alone and probably every Founder has felt the same at some point.
This sense of being overwhelmed can be solved through hiring the right people, building a team to share responsibilities so you can focus on what you need to focus on.
As with our first warning sign, not taking time off is often a false positive. Founders in the early stages of their journey often proudly state they’ve not had a day off in 6, 12, 18 months or more.
Great, but it’s not sustainable personally and it’s a bad way to run a startup.
If you can’t take any time off it simply means your startup cannot operate without you, even for a day. If that’s the case, you’re a single point of failure and if you don’t take a break at some point, you’re going to break.
A good test is to ask if you unexpectedly took tomorrow out of the business, what would happen? What if you extended that to a week, two weeks, a month or longer?
If the answer is more than not much, it’s really time to start building a team you can rely on.
As an entrepreneur, you have a natural ability to spot opportunities and take calculated risks. You wouldn’t be running your own startup if that wasn’t the case.
Being unable to pursue new opportunities, having to watch them pass you by can be incredibly frustrating as a Founder and often lead to resenting your own startup.
If you find yourself having to pass up opportunities, or if following new opportunities means distracting from your core business, it’s a sure sign you need to grow your team.
Your company revenues should be increasing drastically as you scale and win new clients – you’re probably starting from zero after all!
If your revenue plateaus fairly quickly or is starting to decline it’s probably a sign you need to hire more people as it’s more than likely that you, as Founder and perhaps sole-employee, are the limiting factor.
This can be a difficult problem to overcome. Many first time Founders will want to hire someone when they’re generating X revenue per month, only to never get there because they simply don’t have the capacity on their own.
Finally, a very common mistake startup Founders make is spending a disproportionate about of time on tasks they are simply not that good at.
Take this blog post for instance. I’ve written it myself. I’ve probably invested a couple of hours in total between deciding what to write about, drafting, editing and posting.
I’m not a Content Marketer and I’m sure that time would have been better spent on something else and a specialist would have produced a better post in less time. Hint, we need to hire a Content Marketer.
I’m confident you’ll experience most of the problems I’ve listed above at some point during your time as startup Founder and that’s ok.
Just make sure you identify these challenges as a sign you need to grow your team rather than just putting it down to the #grind.
If you want to learn more about how we could help you hire your first employees and the work we’ve done with other startup Founders, don’t hesitate to get in touch.