Starting a business is an exciting but often stressful moment in any entrepreneur’s career, but needing to hire your first employee might match it in terms of complexity.
It is important to prepare your business organization ahead of time before hiring your first employee. That way you may avoid any big mistakes or regrets.
According to Gusto, it costs an average of $4,000 to hire a new employee, but that only refers to hiring costs. There are many forms, types of information and accounting you need including:
- Your EIN
- Tax IDs as well as a withholding plan for Social Security and Medicare
- Business insurance that includes workers’ compensation
There are plenty of resources to help walk you through this organization and make sure your business is legally compliant before hiring your first employee.
Your work needs
Once your business has everything it needs to hire someone, you need to make a few decisions regarding your hire. Do you need a full-time employee or just an independent contractor? Each requires a different job description and employee agreement. Depending on your business, your employment agreement may need to include a number of clauses like non-compete agreements, nondisclosure agreements and other contractual obligations in order to protect you, your new employee and your business assets. Drafting all of these requires a careful eye for detail and precision.
When hiring your first employee, make sure that you know everything is in line. In a perfect world, this all goes off without a hitch. But the business world gets complex and it is easy to know a lot about one aspect of business law and miss out on another. This may lead to business litigation you have to navigate. Lean on your resources before, during, and after hiring your first employee to make sure business goes smoothly.