Here are a few questions you should ask yourself to help you decide if you need to start hiring...
Is your business getting in the way of the rest of your life?
Is there an aspect of your business that you really need help with?
If a part of your business is especially difficult for you (and you're not able to properly do the job) than it's time to get outside help. If that aspect of the business takes 20-40 hours of your time currently, it's time to add an employee with applicable experience. If it's short, infrequent task consider a freelancer. Don't trick yourself into thinking you can do it all. If your business is growing, find the right role for yourself and find others to fill in the gaps. For instance, if you are running a web-based business that sends products to your buyers, maybe you need someone to take packages to the post office while you work.
Are you turning work away or are you suddenly delivering a subpar product?
If you have so many orders you have to turn work away, or extend your wait time for you product, it is time to hire someone. If you are manufacturing a product and a ten business day delivery time is taking fifteen, sixteen or more, you need to make a change. If you are running a coffee house, and your customers are waiting 15 minutes, 20 minutes or more to order and receive their drink, you need to start staffing. A subpar customer experience will have longterm effects. Their consistently bad time (and the negative word of mouth and customer reviews those times are likely to inspire) will hurt your business much more than a new hire salary will hurt you. Don't get greedy. Expand.
So you answered yes to (at least) one of the above and have come to terms with the fact that you need to hire. But it is not as easy as just finding someone and giving them the job. In addition to assessing what kind of work environment you want to have and what kind of boss you want to be, you will need to make a list of qualities and capabilities you want your new hire to have. Prepare to interview prospects and ask the right questions. Being careful about who you hire is wise; it costs you time and money to train someone so you don't want to invest in someone who you will likely fire sooner than later.
Before you go looking for that perfect employee you will want to setup an Employer Identification Number, or EIN, with the IRS. Then, consider how much you want to pay your employee and how many hours you are going to need them. Now keep in mind, that minimum wage for the United States is $7.25, but a number of states have a higher rate. If you live in a state without a minimum wage law, or with a lower minimum wage you are still required to pay the federal minimum wage. If you are outside the United States, you should look-up minimum wages for your country online or contact a local accountant/payroll expert.
When you pay your employee(s) you will also need to consider taxes and other withholdings. The easiest way to deal with this might be to use an accountant that provides payroll service, or use a system like QuickBooks which has a Payroll add on. You can also calculate the taxes yourself. If you are in the United States, for federal income tax you will need the Circular E publication for your calculations.
You also need to look into state, county and city taxes for businesses in the United States. Outside of the United States you will want to look it up online or contact a local tax expert.
Good luck and good sales!
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