First member of staff

[matteureka]

After trading since September 2021 my first full time employee starts this September. The business has done ok however I have only secured 10%-15% of enquiries as up til now it has only been myself in the business. How much financial runway do you think a company should have before taking on a member of staff?

 

[bodgitt&scarperLTD]

If you've only secured 10-15% of enquiries due to not being bale to 'answer the phone' or the equivalent, and you've made profit on those enquiries, then on the surface you need multiple staff, yesterday, before it's too late.

The reality will depend upon your circumstances.

Realistically the only 'financial runway' you need is a months wages plus notice.

 

[Mark T Jones]

As a simple rule of thumb, your member of staff will cost you 1.5 times their salary.

They might, of course take your eye off the ball whilst you train and guide them.

What is your sales cycle?
What is the member of staff doing?
What training is needed?

 

[MBE2017]

As mentioned OP, you need to decide how much a member of staff is worth to you, what their role and duties would be, how long it might take to train them before they could be trusted to work on their own.

If taking on this staff member allows you to double sales, the financial benefits become very easy to quantify. If there are several reasons you want a member of staff, such as holiday and lunch cover, freeing up your time, giving you time off etc plus other reasons, only you can quantify their value to yourself.

Do you definitely need a physical person atm, or could a virtual PA be used instead might come into your decision making process. A good virtual PA can cost as little as £3.50 to £5 hr, but are limited in their use.

Most importantly you need to define what the role will encompass and recruit the person accordingly.

 

[Paul Kelly ICHYB]

Before employing a full time person, work out what you would want them to do and if they are needed full time. Creating a full job spec is essential.

Also consider outsourcing some work.

 

[Airkon]

I have no idea, but my instinct is I would want to put 6 months wages to one side and hire them on a temporary basis and be open and honest with them about the situation.

Ok I've looked at other comments now and I stand by what I've said: My answer is a bit more than the 1 month leway that the other person said, but I get the impression you're growing relatively slowely and not hired someone before, you probably don't want to be worrying about if you can keep them, hiring them for 6 months on a temp basis would allow you to learn from the experience and know if you've made the right decision for your business.

 

[BigDreamer]

I agree with the 1 month + notice. Just as you are taking a risk by hiring an employee, the employee is taking on a risk by joining a young small business. They should know there is a risk of being made redundant at anytime, even before the first month.

Then again, it depends how long it takes to train that employee to start producing results. If it will take 1 month to get him ready to start taking on inquiries, I would have 2 months + notice backup. If you are hiring someone to stack shelves and it only takes a few minutes to have them know what to do, 1 month is enough to see if they are worth it and can make up their cost + more.