First Hire Readiness Checker
Assess your small business's financial stability and compliance posture to determine if you can safely afford your first employee.
Answer these 8 questions to get a data-driven verdict on your hiring readiness.
This is the bottom line after rent, software, materials, and your own salary (if any) are deducted.
Count only money immediately available for payroll, not assets or pending invoices.
Enter the gross annual salary before taxes and benefits.
If you are not offering benefits yet, enter 0.
Consider the last 6-12 months of income.
This includes FUTA, SUTA, Social Security, and Medicare filings.
This defines the role's scope and success metrics.
Standard general liability often excludes employment practices liability.
You have some capacity but critical gaps in runway or compliance exist; address the specific failures listed before proceeding.
What to fix (4)
Payroll tax system is established
CriticalFailure to file FUTA/SUTA/FICA taxes on time results in penalties and interest that can exceed the employee's monthly cost.
Fix: Set up a payroll service (like Gusto or QuickBooks) or hire an accountant to handle quarterly FUTA/SUTA and monthly FICA filings before the start date.
Written job description exists
MajorAmbiguous roles lead to underperformance and higher turnover, wasting the initial investment in hiring and training.
Fix: Draft a one-page job description listing 3-5 core responsibilities and specific KPIs before posting the role.
Monthly salary is under 50% of net profit
MajorIf the salary consumes more than half your profit, you have no room for error in other business areas.
Fix: Negotiate the salary to be below 50% of your current monthly net profit, or ensure you have 6 months of cash reserves to buffer the high fixed cost.
Employment liability insurance is active
MinorEmployment practices liability claims (e.g., wrongful termination) are a top risk for new employers and are often excluded from standard policies.
Fix: Review your insurance policy with your broker to add Employment Practices Liability (EPL) coverage.