New research from Paymentsense reveals that many entrepreneurs admit to waiting too long before hiring their first employee.
The average entrepreneur reportedly hires their first staff member after six and a half months of trading. Some may find this surprising as entrepreneurs are renowned risk takers.
It does have a lasting effect though. Nine out of ten SME owners regret not moving swiftly enough in bringing in employee number one, with 65 per cent saying that they should have hired three months earlier and a further 16 per cent reporting that they left it six months too late.
Why the delay in hiring?
Over 50 per cent of entrepreneurs say that hesitancy in hiring came as a result of nerves around management responsibility. A smaller 21 per cent cite nerves around the responsibility for another person’s livelihood and 18 per cent fear employing the wrong person.
Only 8 per cent of entrepreneurs don’t find the prospect of paying a salary early on in the life of their business appealing.
Just over a quarter of entrepreneurs put their first hire down to a significant new business win. Meanwhile, 23 per cent recruit employees to bring in more sales skills and 22 per cent hire because they need operational support. Only 19 per cent are looking for marketing support.
Guy Moreve, CMO at Paymentsense, says that knowing when to hire your first employee is difficult for every business founder. It’s not a decision to be taken lightly, and clearly comes with an element of risk.
However, he also acknowledges that it is also an essential step to realising business growth, so it’s surprising to see that many entrepreneurs are delaying to make a decision.
‘Considering that over half of new UK businesses don’t make it to five years of trading, every week, or even month of hesitation over that crucial first hire could have a huge impact on the growth of the enterprise,’ he says.
All small businesses should be encouraged to take the next step and hire staff. For a potential funding boost, you can enter the British Small Business Grants monthly competition for free, giving you the chance to win a £5,000 grant to invest in the growth of your company.