When to Hire Your First Employee in a Product Business

Most founders ask this question about six months after they should have.

The short answer is this. You hire your first person when the work that makes money is being crowded out by the work that does not. Not when you feel busy. Busy is permanent. The trigger is when packing orders, answering the same email forty times and chasing a factory has eaten the hours you used to spend on product, buying and selling.

That is a maths problem, not a feelings problem. Here is how I would work it out, what to hand over first, what it actually costs in Australia, and the signs you have already left it too late.

When should you hire your first person in a product business?

When a repeatable, low judgement task is taking more than five hours of your week, and the work it is pushing out earns you more per hour than that person costs.

Write the sum out properly, because it is the whole decision. Say you pay someone $35 an hour. With on-costs, call it $45. Ten hours a week is roughly $1,950 a month. So the real question is whether ten hours back buys you more than $1,950 of product, sales or margin. If you cannot see how it does, do not hire yet.

If the sum does not work, the problem is usually price, not staff. Fix your pricing first. A business that cannot afford help at $45 an hour usually has a margin problem hiding underneath it.

Do the two week diary test first

Before you write a job ad, do this. For two weeks, write down every task and how long it took. Not a rough guess at the end of the day. As you go. It is annoying and it is the most useful two weeks you will spend.

Then mark every line with one of three letters.

• M for money. Product decisions, selling, buying, pricing, relationships.
• R for repeatable. Same steps, same outcome, could be written down for someone else.
• S for stuck. Things only you can do because nobody has ever been shown how.

Your first hire takes the R column. All of it, if you can. The S column is your homework, because S is nearly always R that you have not documented yet.

Almost every founder I mentor is surprised by the same thing. The R column is far bigger than they guessed, and it is mostly admin around production and customers. Not the interesting parts. Nobody needs help with the fun bits.

What to hand over first

Hand over the tasks that have a right answer. Keep the ones that need a judgement call.

1. 1Order packing and dispatch. The most obvious hours, and the easiest to teach.
2. 2Customer emails. Write the ten answers you give over and over, then hand the inbox across.
3. 3Supplier follow up. Chasing dates, confirming quantities, checking a sample arrived.
4. 4Listing and content admin. Uploading products, resizing images, scheduling posts.
5. 5Bookkeeping. Reconciling, invoices, chasing wholesale payments.

Do not hand over pricing, product design or the supplier relationship itself. Not yet. Those are the decisions the business is actually made of.

Supplier follow up only works if the brief is written down. If it lives in your head, nobody else can chase it. That is the whole argument for a proper written brief, and we covered how to build one over on Source Haus: how to brief a factory overseas.

What a first hire actually costs in Australia

The wage is not the cost. In the 2026-27 year the superannuation guarantee is 12% on top of ordinary earnings. Casual staff get a loading of around 25% instead of paid leave. Then there is workers compensation insurance, payroll software, and the hours you spend training.

A rough sanity check. Take the hourly rate and add 20 to 30% for a permanent part timer once super, leave and insurance are in. A $35 an hour role is really $42 to $46 an hour.

Then count the hours you lose teaching. The first month is a cost, not a saving. Give it six to eight weeks before you expect it to net out, and make sure the cash flow can carry that gap.

If that gap worries you, work through your numbers before you advertise, not after. Managing cash flow in a product business is the piece to read alongside this one.

Contractor, virtual assistant or employee?

For a first hire, most product businesses are better off with part time hours than a contractor arrangement built to dodge the paperwork.

A contractor suits genuinely separate, project shaped work. A photographer. A bookkeeper. Someone who has other clients, sets their own hours and brings their own tools.

A virtual assistant is a good fit for inbox, listings and scheduling. Not for packing boxes, and not for anything that needs to touch stock.

But be careful here. If someone works set hours, uses your systems and takes direction from you, they are probably an employee, whatever the invoice says. Getting that wrong is expensive to unwind. Ask your accountant before you decide, not after.

The signs you have already left it too late

• You are packing orders at 10pm and calling it catching up.
• You have stopped replying to stockist enquiries because there is no time.
• The next drop keeps slipping and you cannot say exactly why.
• You have said no to an order because you could not face the admin.
• You are the only person who knows how anything works.
• Your best ideas are three months old and still untouched.

The last one is the real tell. When the founder stops doing founder work, the business stops growing. That is not a mindset problem. It is a capacity problem, and capacity is something you can buy.

Automate what you can first, then be honest about the ceiling

Systems are cheaper than people, so use them first.

This year I built all three of my websites myself. Kristy Withers, Source Haus and Good Goods World. I set up the analytics, the pixels, the payment functionality, the SEO and the A/B tests on the newsletter popups. That saved me about $15,000 across the three. I also built a scheduled task that checks every one of those elements once a month, so nothing quietly breaks while I am not looking.

I did not learn to code. I learned to brief.

But automation has a ceiling and you should be honest about where it sits. A tool will not call a factory at 6am. It will not repack a carton because the tape looked wrong. It will not notice that the third sample is the same shade of wrong as the second. When you have automated the repeatable things and the R column is still full, that is your hire.

How I would do it now

1. 1Run the two week diary. No shortcuts.
2. 2Write the R column out as a task list, not a job title.
3. 3Start at eight to ten hours a week, not full time.
4. 4Write the process down as you hand each task over. One page per task is enough.
5. 5Give it eight weeks before you judge whether it worked.

Hiring a job title is how you end up with someone sitting there waiting for instructions. Hiring a task list is how you get your week back.

The mistake I made

I held on to the R column for far too long because letting go of it felt like losing control. It was not control. It was a bottleneck with my name on it.

The business only got bigger than me when I let other people do the parts that did not need me. If you are still weighing up how much of yourself to put into this, when to quit your job for your product business is the other half of the same decision.