Are you turning down work because you simply don’t have the capacity? Answering emails at midnight? Delivering for clients but having no time left to focus on growth?
If that sounds familiar, it may be time to hire your first employee.
For solo entrepreneurs and startup founders, that first hire is a major milestone. It’s exciting because it means you’re growing, but it can also feel overwhelming. Who should you hire? Can you afford it? What if it goes wrong?
One of the benefits of coworking spaces is that support is always available, helping you at every step of your journey. This guide will walk you through each stage of a successful first hire.
Because scaling your business shouldn’t mean doing it alone.
How to know you’re ready for your first hire
If you’re stuck in constant delivery mode, working late just to keep up and with no time left to think about growth, it may be a sign you’ve reached capacity. When opportunities start passing you by, doing nothing can quickly become the bigger risk.
Being able to clearly identify recurring tasks that could be delegated is another strong indicator that it may be time to hire. If your revenue can comfortably support it, bringing someone on board could help you move forward. A good rule of thumb is to generate three to four times the salary of your first hire, and to have at least 20 hours of consistent work per week available to justify the role.
Before moving forward, ask yourself: could you sustain this hire if your income dips temporarily? And are you ready to train and manage someone properly, not just offload tasks?
Hiring too early can stretch you financially, but waiting too long can stall your growth. If you’ve been operating at 110% capacity for several months, it may be time to grow your team.
Who should you hire first?
Before hiring, ask yourself: do you need someone to handle time-consuming tasks, or someone whose skills can help grow your business in areas you can’t manage alone? The answer will vary for every business, but clarity is key.
If admin is eating your time, a Virtual Assistant can manage emails, scheduling, and other routine tasks, freeing you to focus on high-value work. Start part-time if you like, it’s low risk and highly flexible.
If you deliver services, consider hiring someone to help produce or deliver your work. This costs more than admin support, but it lets you take on bigger projects and focus on growth.
Looking to grow sales? Hiring someone with strong sales skills can boost your revenue — but only if your sales process is already working.
Or perhaps you need a specialist in marketing, book-keeping, or tech? This can often start as a part-time role or freelance collaboration to fill a skills gap without a full-time commitment.
As you plan your hire, focus on what will have the biggest impact: which tasks truly need to be delegated, which skills are missing, and where your time is best spent. Hire for what you can’t do or shouldn’t be doing, not just what you don’t enjoy.
Contractor, employee, or apprentice?
What type of contract makes sense?
- Employees are fully dedicated to your business and great for building structure and long-term processes. But they come with higher costs and a stronger commitment. You’ll need to provide a proper contract, holiday, sick pay and pensions, and will need to manage payroll. Essentially, you’re welcoming someone into your small business family
- Freelancers or contractors offer flexibility and a lower administrative burden. You can hire them for specific projects or short-term periods. But the trade-off is less control: you can’t necessarily dictate how or when they work. However, it’s a smart way to test a potential future employee before committing
- Apprentices can be lower risk and cost, with government incentives and the chance to grow talent in-house. The key is readiness to train and support your apprentice; you can’t treat them as cheap labour – you need to incorporate a plan for their development into your business plans
Many startups start with freelancers or contractors to trial a role before making a permanent hire. Just be mindful of IR35 rules: if you control how, when, and where someone works, they may legally be considered an employee.
Your to-do list for making your first hire
Before you start looking for candidates, get organised and map out the steps ahead.
Step 1: Get your admin in order. Make sure you’re set up as an employer with HMRC, have your PAYE system ready, and get employer’s liability insurance (a legal requirement). Decide on employment terms like hours, holiday, and notice period, and have a simple employment contract ready — ACAS templates are perfect for first-time hires.
Step 2: Define the role clearly. Know exactly what you need before you start looking. Write a straightforward job description, outline core responsibilities, and distinguish between essential skills and nice-to-haves. Decide if the role can be remote or office-based, and research realistic salary levels for your market.
Step 3: Find the right person. Start with your network — warm introductions often work best. Post the role on job boards like Indeed or LinkedIn, reach out to local job centres or recruitment agencies, and consider university boards for entry-level or apprentice positions. Be upfront that this is a first-time hire in a small business; clarity will help you attract candidates who understand and embrace your environment.
Step 4: Run a simple interview process. Screen candidates with a phone or online call first, then meet in person if possible. Focus on cultural fit and attitude as much as skills — this is someone you’ll work closely with. Ask about their comfort in a small business setting, consider a paid trial day, and always check references.
Step 5: Onboard thoughtfully. Congratulations, you’ve found the right person! Now it’s time to set them up for success. Give clear expectations from day one, and provide simple processes or documentation so they understand their role and why it matters. Schedule regular check-ins, especially in the first few weeks, and be patient — learning curves go both ways. If possible, bring them into a shared workspace to help them feel part of the team and build company culture.
Remember your own first day in a new company. Make your hire feel welcome, needed, and part of your journey. Whether it’s an employee, freelancer, or apprentice, the first impression matters!
The reality check: What your first hire really costs
Hiring your first employee involves more than just their salary. On top of their pay, you’ll need to budget for employer National Insurance contributions, pension contributions, holiday pay, and employer’s liability insurance. There’s also the cost of equipment like laptops, phones, and software, plus the time spent training them and the initial dip in productivity. Recruitment expenses can add to the total as well.
For example, a £25,000 salary can actually cost around £30,000 to £32,000 once you include National Insurance, pension, and holiday pay. It’s important to factor these costs into your budgeting.
The good news is that a smart hire should generate more value than they cost within six to twelve months, making the investment worthwhile for your growing business.
Common first-hire mistakes to avoid
One common mistake is bringing on friends or family, as professional boundaries can quickly get blurred. Skipping a probation period or failing to document processes can also create problems. If you don’t know what you need, your new hire won’t either.
Communication is crucial. Avoid micromanaging, but don’t give too much freedom without check-ins either. Too much control discourages, while too little can send your business in the wrong direction.
Clear expectations are essential; your hire can only meet your needs if you’ve expressed them clearly.
Finally, waiting until you’re overwhelmed or hiring just for current needs without planning ahead can backfire. Avoid these pitfalls, and your first hire is far more likely to become a strong, long-term contributor.
Final thoughts
Your first hire is a big step, but it’s also how your business moves beyond solo operations. Start with clarity on what you need and what you can afford, and remember that communication and transparency are just as important as in any relationship. If you don’t know what you’re looking for, how can you expect someone else to?
Need support? At Freedom Works, our community is here to guide you through this exciting step. Connect with peers or get advice from a Business Mentor via Barclays Eagle Labs and make your first hire with confidence.
Join Freedom Works now and discover the benefits of coworking spaces for start-ups!
