How To Know When To Hire Your First Employee

If you are wondering how to know when to hire your first employee, you’re not alone. And I myself was actually there not too long ago.

In short, you’ll want to hire your first employee when you begin to get backed up by the demand in your business.

In July of 2026, my brother and I who run a commercial embroidery shop in California hired our very first employee.

Before hiring, I was curious when the right time would be to do so.

And I was hesitant about realistically know when the right time would be.

See, I understand that you might be unsure and even uncomfortable thinking about making the wrong decision too early on.

I’m going to outline milestones we hit before hiring our first employee that will guide your hiring decision.

Stick to the end and leave your story in the comments section below.

Let’s get started!

It’s Getting Harder to Keep Up With Demand

The number one tell-tale sign it’s time for you to hire your first employee is when it becomes harder to keep up with demand.

We hit $10K in sales no problem, but we could push production on our own. Around the $15K mark we found ourselves outsourcing before hiring our first employee.

At some point, we’d have to hire, even if it was part-time.

There came a time where doing everything ourselves was no longer the answer. Rather than expanding, we were capping ourselves by managing it all on our own.

But the biggest challenge came when we couldn’t break past a certain number figure in billing.

We Hit A Ceiling in Accounts Receivable

It was when we got stuck billing only $12K in accounts receivable that we knew it was time to increase output.

If we’d have a $15K or $18K month, we were only able to produce $12K in projects ourselves, and bill only that amount.

We were stuck.

That’s when we hired our first employee — to help us push more production out and bill our clients more every month.

In our industry, clients have NET30 terms.

This means that their invoice is due 30 days after they receive the invoice.

So, by being able to bill them more per month, we were able to take bigger profits every month.

Do everything yourself and eventually you’ll hit a wall, or burn out.

As business owners, we get to a point where we need to continue to grow the business, selling our services or products, and continue to grow our clientele.

You cannot scale without building a team, and it starts with hiring your first employee.

Hiring Our First Employee Changed Everything

Once we hired our first employee, everything changed.

We only hired them part-time, eight hours on Saturday and on Sunday. Eventually, our sales started to cross the $30K mark and $40K mark.

This is where we opened a part-time night shift. Now our business was operating 16-hour days Monday through Friday and an additional 16 hours over the weekend.

For a full-time position, I want to see what Q1 of 2027 looks like. These nearly 100-hour work weeks are happening during our industry’s heavy quarter.

And with some heavy-hitter leads getting ready to pull the trigger with us very soon, our rolodex of partners is becoming more and more the dream clientele.

So, how do you know its time to hire your first employee?

In short, it’s when demand begins to outpace your output capabilities. Start small first, such as opening a part-time position before opening a full-time position.

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If you want to read more about how I grew our company past $200K its first year in business, check out the Entrepreneur Blog for the latest stories and updates.

What’s Your Experience Hiring Your First Employee?

Have you already hired your first employee or are thinking about hiring soon? What’s holding you back if you haven’t?

What exactly do you want to see in your business before you hire?

I’d love to hear all about it! Leave your thoughts in the comments section down below.

Also Read: 4 Traits Every New Entrepreneur Needs to Survive and Thrive

More on Entrepreneur Blog →

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