The first person you employ either doubles what your business can do or costs you a year. The difference is rarely the person. It is usually a set of decisions made before they arrived, most of which felt like sensible economies at the time.
Here are the six that come up most often, and what to do instead.
Hiring a friend, or hiring yourself again
It is the obvious first move. You know them, you trust them, they will not steal from you, and they are available. All of that is true, and none of it addresses the actual difficulty, which is that employment is a hierarchy and friendship is not.
The problems arrive at the boring moments. You cannot tell them their work is not good enough without it being personal. They cannot tell you the plan is wrong without it being disloyal. When you need someone to work a Saturday you ask somebody else, because asking a friend feels like an imposition. And if it does not work out, dismissing them costs you the friendship as well as the role, and possibly a shared social circle.
If you do it anyway, and plenty of people do, make it explicit before they start. Write the contract. Set the probation review date. Agree in advance, out loud, how you will handle it if the work is not right. A conversation that is awkward in week one is considerably less awkward than the one in month nine.
The same applies to family, with the added complication that a family member's employment terms are still subject to the same law as everybody else's, whatever is said at Christmas.
The second version of the same error is to recruit someone who resembles you: same background, same strengths, same way of seeing a problem. They interview well because they agree with you.
The trouble is that your business is already fully supplied with your strengths and is limited by your weaknesses. A builder who is excellent on site and poor at quoting does not need a second person who is excellent on site. He needs someone who will produce quotes on a Tuesday.
Work out what your business actually lacks before writing the advertisement, and be honest that it may be the part of the work you like least. The first hire in a small business is often administrative rather than operational, because administration is the thing owners defer and it is the thing that loses work.
There is also a legal dimension. Recruiting in your own image is how indirect discrimination happens without anyone intending it. The Equality Act 2010 applies to recruitment, including advertisements, shortlisting and interviews, and "a good cultural fit" is a phrase that has sat on top of a great deal of unlawful decision-making.
No job description means nobody can tell whether it is working
If the role was never written down, you cannot manage against it, the employee cannot succeed at it, and the probation review has nothing to measure.
A job description does not need to be a corporate document. One side of A4 covering the purpose of the role, the six or seven things the person is responsible for, who they report to, what they can decide without asking, and what good looks like after three months. That last line is the one that matters and it is the one that is always missing.
Write it before you advertise, not after, because the act of writing it frequently reveals that you have combined two jobs that no single person does well.
No induction means the first month is wasted
Small employers often plan nothing for the first day beyond showing someone where the kettle is, on the theory that they will pick it up.
They will pick it up, slowly, by interrupting you, which means your own productivity drops for longer than it needed to. A written first-week plan costs an hour and pays for itself immediately.
- Day one: right to work check, contract signed, health and safety induction, fire exits, who is who, and one small task completed start to finish.
- Week one: sit with each part of the business, watch how the work actually arrives and leaves, learn the systems, meet the three customers who matter most.
- Month one: a defined piece of work they own outright, however small, so that both of you can see whether they can carry something.
The health and safety part is not optional. Under the Health and Safety at Work etc. Act 1974 and the Management of Health and Safety at Work Regulations 1999 you must provide adequate information, instruction and training, and once you employ anyone you must have a written health and safety policy if you have five or more employees, with arrangements in place either way. The Health and Safety Executive publishes what a small business needs.
No probation review means the decision never gets made
The probation period ends, nothing happens, and by default you have confirmed someone in post. Six months later you are still saying that they are nearly there.
Put the review in the diary the day the offer is accepted. Hold it as a real meeting with the job description on the table. Say plainly whether the appointment is confirmed, extended or ended, and write down what was said and what happens next.
If it is not working, the kindest and cheapest action is to say so early, clearly and with a reason. People generally know before you tell them. The situation that produces resentment and tribunal claims is the one where nobody said anything for nine months and then everything was said at once.
Act within the timescales your contract sets, and follow the Acas Code of Practice on disciplinary and grievance procedures where the issue is conduct, because an unreasonable failure to follow it can increase a tribunal award by up to 25%.
Paying for loyalty instead of work
The last one is the most expensive. A first hire who has been with you since the beginning gradually accumulates pay rises that reflect length of service and affection rather than the value of the role. Five years on, you are paying manager money for an administrator, you cannot reduce it, and every subsequent hire is benchmarked against it.
Pay the role, review against the market, and where you want to reward loyalty, do it with things you can vary: a bonus tied to something measurable, extra holiday after a qualifying period, training, flexibility. Those can be generous without permanently repricing the job.
Where this shows up in the game
Business Baron makes the first hire a proper decision with a slow payback. Staff have skills that do not overlap perfectly with yours, they take time to become useful, and a badly defined role produces someone who is busy without moving the business. Getting it right is what lets you open a second site without working eighty hours. The first hire and its consequences are all in the free game, with no clock on how long you take to learn from them.