Guide to Hiring Employees as A Home-Based Business Owner

Many businesses have been started by individuals from a “home office” in their dormitory, living room, garage, or at the kitchen table, but what happens once your business starts growing and you can no longer manage all the operations yourself? It might be time to consider bringing people onboard.

Unless you’re planning to shift your work, files, etc. to a formal office building, that basically means your home is about to turn into an office. That could seem a little overwhelming for a home-based business owner, but with careful arrangement you can recruit top individuals who are more than capable of helping your business flourish, while keeping overheads down to a minimum. Also in today’s virtual world, hiring staff doesn’t mean they have to work out of your home although that certainly might be a requirement.  Be sure to consider virtual options for them to work in their home office as well.

How Many People Do You Need?

If the spike in demand that your company experiences for a product or service is due to things like summer vacations, holidays, or a specific event, you may require a few employees on an infrequent basis. However, if you consistently find it challenging to meet deadlines, finish tasks, or attend meetings, you may require permanent help.

Before anything else, however, ensure that your revenue is decent enough to bear the costs of new personnel. If you won’t be able to increase your profits after paying their salaries, you’ll just be taking your company on a fast route to failure. In a situation where you need to recruit on a temporary basis, you might be able to bear a drop in profits. However, the drop will need to end after a year or two. Otherwise, it can eat away at your capability to scale.

Recruitment Advice for Home-Based Business Owners

1. Understand the Legal & Financial Implications

You’ll need to understand a few things before you began your recruitment drive. Firstly, you’ll need to see whether you have to get some full-time salaried personnel on board or whether you can get someone on a contract or hourly basis. Make sure you make the right decision because there will be different legal and tax implications based on your choice. For instance, you’ll have to withhold certain taxes from the salary checks if you recruit someone on a full-time salary.

Beyond taxation problems, there are certain zoning laws that may be in effect for your local that restricts non-related personnel from working in a home incorporated venture. Make sure you’re familiar with the law of your area before it’s too late to escape from a potential lawsuit from the zoning commission in your locality.

Moreover, you’ll need to see if you can offer fringe benefits to your personnel, such as sick leave days, paid off time, and employment insurance. If you have temporary staffers, this won’t be a huge concern. However, it’s important to conduct due diligence before recruiting employees on a full-time basis.

2. Get Things in Order

Just because you’re running a company from home doesn’t mean that you can be less focused as a recruiter. In fact, you may need to be more focused as you don’t have a formal “place of business” finding talent may be harder.  

You’ll have several responsibilities as an employer, including contracts for temporary candidates, or complying with laws around safety and health. Besides that, you’ll might also be responsible for hiring manger’s liability insurance. If you’re going to have visitors to your home office, you might also have to get public liability insurance.

Additionally, it is best to let prospective employees know that your home is your office; otherwise, it can be a shocker if they find out in the end. If they are coming to interview let them know it’s your home they are visiting.

If your employees will be on-site at your house, try to have a physical separation between personal and work spaces in your home. Work space includes the meeting space, tea and coffee facilities, as well as work office desks. In an ideal world, home-based business owners would also have a separate entrance for employees. The boundaries between corporate and personal space should work both ways. Like personnel respect areas of the accommodation that are out of bounds/private, the family should also be recognizing that it is off-limits to go into the office (especially during work hours) and implement the restriction.

Lastly, recognize additional parking needs and responsibility you have as a neighbor. While you be able to operate a company from your home solo without requiring additional consent, you might require permission if you expand. Expect complains to be lodged if you produce a lot of noise or your neighbors aren’t able to park their vehicle outside their home because your employee has that space occupied. Plan and prepare in advance so that you and your team are able to operate a successful business from home.

If you’re going to be hiring someone who will be working virtually, then make sure your clear on working hours, communication requirements, any technology requirements, etc.  It needs to be clear that just because you can’t see them doesn’t mean they can work when ever and how ever they want.

3. Know Where to Post/Advertise the Vacancy

One of the more challenging aspects of recruiting employees for a home-based business is connecting with the ideal candidates. The advent of many different types of hiring websites may make it simpler than ever, but there can be certain challenges to these websites. Therefore, it’s wise to adopt a mix-and-match strategy, where you integrate local, offline recruitment strategies in addition to online platforms. Also, only post vacancies on credible platforms like,, and

But don’t stop there. Put up a booth in local job fairs, test an ad in a local publication, and get the word out through local job boards. If you’re looking for a faster route to hiring employees for your home-based business, consider working with a recruiting agency. While this is a more expensive option when it comes to finding the right candidates, you’d have more time to oversee your day-to-day responsibilities. Additionally, look into temp agencies; these can be a god way to onboard, access and recruit potential full-time staffers while minimizing turnaround expenses.

4. Look at Talent, Not (Only) Educational Qualifications

One key characteristic of a smart home-based entrepreneur is the ability to identify potential and talent, not just look at the track record of educational achievements. Seek someone who has a deep passion for goals that are the same as yours, and, individually, verify that the individual is really good at what he/she says she’s capable of doing. Unlocking talent has a lot a to do with marrying an individual’s passions and skills, so even if someone doesn’t have a degree from a top university, if he/she can ace the position you’ve advertised, you’ll likely experience positive results.

On that note, it’s highly recommended that you have applicants demonstrate aptitude or skill. Some candidates may anticipate exactly what questions an employer will ask them, so it’s relatively easy for them to get through this stage. Hence, the best way to test if someone is best suited for a position you’re recruiting for is to have him or her go through a practical test. For instance, if you’re hiring a copywriter, have him/her do a blog post. Give potential candidates little direction and see how they’d manage the task by themselves. Those who aren’t wiling to put energy and time to produce top quality should be immediately dropped from consideration.

5. Start Recruiting & Onboarding

Once you had made the decision and begin to think about the onboarding process, you have options: You can handle the new hire as a managed employee in the aspect that you evaluate his/her work, compensate them for their time, and issue them specific directives. Or you can consider giving them a freehand where they adopt their own methodologies for making your company’s vision a reality, including hands-on learning and being a part of the ups and downs of your company. This can be good approach for virtual employees and contractors.

Besides all that, it’s crucial to have an onboarding process. For some companies, it’d be an hour-long conversation during the personnel’s first day at work. Others will make a knowledge base available on the employees’ PC so that they’re able to assist staffers with onboarding in real-time. Other than that, it’s also a good idea to show your expectations and culture over the course of frequent meetings. Alternatively, you could put together a range of sessions from the intent to the company history to the culture and beyond. Having these things laid out will at least mean that those joining the company will know what’s expected of them from day one.

6. Taking the Last Steps (After the Hiring Is Done)

Once you’ve hired someone, it’s important to report the recruitment to proper agencies. For instance, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 demands that all recruiters should report new hires to the relevant state agency within 20 days of the recruitment date. Additionally, you should file W4 for all employees, and W2 for all expenses, as well as do appropriate recording of taxes for each calendar year.

Additionally, home-based entrepreneurs should keep a comprehensive record of their personnel. This will include all work and finance-related records (even after contracts are terminated). Without record keeping, you can get in trouble with the regulatory authorities on a state, industry, or federal level.

Final Verdict

Your first home-based employee or contractor can be a huge asset for your company. Take the time to design a smooth recruitment process, and you’ll be able to ensure that your first recruit has the passion and energy to take your business to new heights. Also, the right recruitment process will connect you with people who’re in it for the long haul – and that’s one of the best things that could happen to your business.

Guide created by GForce Employment Professionals