Four numbers to check before you hire your first employee

The first hire is the point where guessing gets expensive. Up to then most decisions are reversible. A person is not — not quickly, and not cheaply.

None of the numbers below tell you whether to hire. They tell you whether you can see clearly enough to decide.

1. What the role has to generate

Every role either brings money in or frees up someone who does. Before writing a job description, work out what the position needs to produce to justify itself — extra billable capacity, extra output, or enough of your own time returned that you can sell more.

If you cannot state that number, the role is not defined yet.

2. The real cost, not the salary

Salary is the visible part. On top of it sit employer payroll taxes, insurance, equipment, software seats, and the hours you will spend hiring and training instead of working.

Budget for meaningfully more than the wage itself, and plan the first months as a period where the role costs money before it returns any.

3. How many months of payroll you could cover

Look at your cash — not your profit — and work out how long you could keep paying this person if revenue went flat tomorrow.

The answer does not have to be long. It does have to be a number you have actually calculated, because payroll is the one bill that cannot wait.

4. Whether your current capacity is genuinely full

Hiring solves a capacity problem. It does not solve a pricing problem, a process problem or a collections problem — and it will make all three more expensive.

Before adding a person, check that the capacity you already have is both full and profitable. If margins are thin at today’s volume, more volume will not help.

Why run these first

Owners rarely regret hiring. They regret hiring without knowing what the role had to earn, or how long they could carry it if things slowed down.

Those are bookkeeping questions before they are hiring questions — and they are far easier to answer when the books are current.