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When Is The Right Time to Take On An Employee?

For a small business, taking on new employees can be daunting. Knowing the signs that your business is ready to grow will help you spot them early on and hire the right employee at the right time.

For a small business, taking on new employees can be daunting, especially in the fraught economic environment of the pandemic – every new employee is a new wage to pay, and finding the right fit for your business is more important than ever. As the UK slowly eases restrictions, small businesses are beginning to thrive again across the country. Knowing the signs that your business is ready to grow will help you spot them early on and hire the right employee at the right time.

In Gloucestershire alone, more than £400,000 has been handed out to keep businesses growing, so if you’re a small business owner, now might be the time for you to consider hiring a new employee.

How Do You Know When You’re Ready To Hire A New Employee?

1. When You Can Afford It

One of the most important factors to consider when you’re thinking of hiring is whether your business can actually afford it. If you’re apprehensive about whether you’ll be able to afford a new hire, you may want to consider applying for funding from the government – such as the new Government Kickstart Scheme, which provides grants for businesses to hire 16-24 year olds at risk of long-term unemployment.

2. When You’re Ready For Your Business To Grow

Don’t make the mistake of trying to grow before you hire – this can result in your business struggling to meet demand, and your employees becoming overworked and stressed. Although it can seem counter-intuitive, if you have had consistently strong growth and project to continue as such, hiring early will only benefit you and your business.

3. When You Can No Longer Meet The Demand Of Your Customers

Maybe you couldn’t anticipate the growth of your business, and now you find yourself being unable to keep up with the demand of your customers. This is a sure-fire sign that you need to start hiring to expand your capacity and boost revenue! Make sure you’re regularly communicating with your clients to work out what it is they want from you – this could be through follow-up emails, surveys, Google reviews or simply calling them up.

Finding the Right Person

For a small business, finding the right person is crucial. You will likely be working with this person on a regular basis, and the survival of your business may rely partly on them – so it’s imperative to choose carefully. You want to create a job listing that attracts the right kind of applicants, highlighting the best parts of your business and clearly stating what you are looking for in a prospective employee. There are plenty of online job boards that can help make the process of finding the perfect person a swift and simple process.

Taking On A New Employee

For any small business owner, the process of finding and hiring new employees is time-consuming. Once you’ve found the right candidate for you, it’s time to get going with incorporating them into your business as soon as possible

Taking On A Full Or Part-time Employee

If this is your first time hiring someone, you will need to register as an employer with the HMRC. You will also need to create a contract of employment for your employee to sign, register them with the HMRC to ensure their taxes are paid, and make all the relevant checks to certify that your new employee has the right to work in the UK and has passed any necessary DBS checks.

Taking On Someone Self-employed

Working with a freelancer or self-employed person has a lot of advantages, but it can be trickier than hiring a regular employee. If you are regularly paying them a set amount and you are their sole client, HMRC may notice this and class them as ‘employed’ resulting in you incurring a penalty. If they haven’t previously worked as a self-employed person, make sure they register as self-employed to avoid issues with taxes and set up a written contract detailing things such as how long they will be hired for, how much they will be paid, and so on.


Hiring can be a tricky business and timing is everything – hiring someone too soon can lead to profit losses, but leave it too late and you’ll end up stretching your business beyond its capacity. With the slow return of the economy, it’s more important than ever for small businesses to be using this opportunity to hire, grow, and flourish.

If you’re ready to grow your business, check out Start and Grow Enterprise’s free online training and events, and find out how they’ve helped other small business owners like yourself.

PLEASE NOTE: We are no longer taking on new clients under this programme from Friday 17th February 2023