Despite the pandemic, the IRS received more than 7 million requests for new employer identification numbers between January 2020 and June 2021, according to data from the U.S. Census Bureau.
As those businesses grow, many will reach an important milestone: hiring their first employees. Here are six things business owners should do first.
1. Make sure you need help. First, look for signs that your business can’t move forward without assistance. If you’re “personally at capacity” and receiving more orders than you can handle, it may be time to hire someone, says Phelan Spence , a services and financial analysis associate at JumpStart, a Cleveland-based nonprofit that works with entrepreneurs.
Hiring may also be on the horizon for business owners who are missing deadlines, fielding customer complaints or thinking about taking on a big project.
2. Know your numbers. Before hiring full- or part-time employees, your cash flow should be steady enough to support regular paychecks. Business owners need to plan for expenses beyond wages, including Social Security, Medicare and payroll taxes, and, in many states, workers’ compensation. Benefits like health insurance add additional costs.