It is hard to imagine there is a single person who doesn’t want to see their startup grow. That potential for expansion is one of the reasons most business owners want to hire new employees.
However, the thought of bringing in someone else into your business can be overwhelming, and most often, entrepreneurs feel unprepared for it. Others rush over it, which can be catastrophic and potentially bring down a business that may have taken a lot to build.
But it doesn’t have to be that way for you! Here are four things that every entrepreneur must know before hiring employees for their startup.
1. You will need to provide your employees with their employment and financial documentation.
As a business owner with employees, you are responsible for keeping accurate employee records and providing them with all the necessary documentation. These include tax forms, new hire reporting forms, benefit forms, and miscellaneous forms.
In some instances, you may be required to give your workers monthly paystubs showing their earnings and deductions. Fortunately, issuing these documents is super easy, especially if you have an accounting software program that offers this option. If you don’t, you can use an online paystub generator to create professional documents for your employees.
2. Know when not to hire
While it is important to know when to hire, it is also critical to know when not to hire. For instance, you should not hire if:
- You are desperate.
Most often, entrepreneurs make the mistake of hiring when in the heat of a stressful moment, such as when work is more than they can handle. Such a decision can rarely yield expected results as you are likely to hire the wrong people and for the wrong reasons.
- You are not sure of what you want.
Another mistake many entrepreneurs make is knowing that they need help running the business’s day-to-day activities but not being clear on the nature of help they need. It is always best not to hire until you have a clearly defined set of expectations for your new hire. If you are at this point, enlisting the services of a business coach would be more worthwhile.
3. Candidates with startup experience are your best bet.
A lot goes into choosing the right candidate from skill, personality, and experience.
While it may be tempting to look for people with experience in working for big companies, the truth is individuals with experience in working in startups will be your best bet. Such candidates are better adapted to working autonomously, wearing many hats, and handling tasks beyond their on-paper job description.
On the other hand, candidates from established firms are used to structured hierarchical processes and may find adjusting to the company cultures of a growing business more challenging.
4. Ensure you are legally compliant
Before embarking on hiring, you will need to ensure that your business is compliant with federal and state laws.
For example, every business with employees is required by the IRS to have an Employer Identification Pin (EIN) for tax purposes. Additionally, different states may have varying requirements for employer registration which you may need to know.
It is also important to ensure that you familiarize yourself with federal and state labor laws around employment, minimum wages, termination notice, liability insurance coverage, etc. More importantly, don’t forget to consult with a skilled business lawyer to ensure that your business is legally compliant.
There is no denying that bringing in new hires for your startup is a great milestone. However, don’t be afraid to take this step if you are convinced it is the right time to get an extra hand. Even when you make a mistake, you still get to learn from it.