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Are You Ready to Employ Someone for Your Home-Based Business?

By: SmallBizClub


Ready to Employ Someone Home Based Business

As entrepreneurs, many of you will have started your own businesses from home. After a period of time, though, you may reach a growth plateau or realize that you need some help and simply don’t have enough hours in the day to get everything done yourself. Taking on your first employee is one of the most important steps in business growth and development. But before you go down the route of recruiting, there are a few things that you ought to consider as a home-based business…


Will there be enough work each month to continue to pay someone else’s wages? In some months when cash flow is tight, do you have enough reserves to keep paying this salary? Before you start looking for suitable candidates, consider how much you will be able to pay them and write a clear job description, considering what skills and responsibilities will be required for the new role.

New employees take time to get up-to-speed so it is a good idea to ask yourself where you would like to be in 12 months’ time and how much income you will need to justify paying another salary. You can investigate online job boards or recruitment websites to find out what the going rate is for your required role. Be sure to consider if the demand for your service is seasonal and if you potentially need a line of credit to cover slower months.

Accommodating an employee can be costly. Ensure you factor in the costs of additional equipment such as desks, chairs, laptops, etc. Don’t forget about providing suitable bathroom amenities and perhaps even consider if you need an alternative entrance to your working area. Remember that you don’t only need to consider their salary, but additional costs such as taxes and insurance.


It will be wise to ask the help of a lawyer to prepare an employment contract for your new recruit in advance, so that you have some clear terms to fall back on. You will also need to check that your candidate is eligible to work in your country with a valid working visa if required. Check on the latest regulations affecting employment and ensure you are aware of the national or state minimum wage.

Your current home insurance may no longer be valid

If you continue working from your home and an additional employee also starts working from your home, then your current home insurance may not be valid. As a home-based business you will likely already have separate home business insurance as standard home insurance will not be sufficient, but you will also need to check that any amendments (such as additional employees) does not affect your coverage.

It is important to avoid any risk to your home in this way to safeguard your property and business from theft, damage and loss. An ‘all-risks’ policy will make sure that you will be covered even if the loss, damage or theft to equipment occurs outside of the home, such as when travelling to an external meeting.

Workers’ compensation insurance/Employer’s liability insurance

In the US, Workers’ Compensation Insurance is a state-provided compensation for permanent and full-time staff, where employees’ medical and disability expenses from work-related illness or injury are covered. However, there are exemptions where some employees, such as household workers, may fall outside.

In the UK, once your business employs a member of staff, then you are legally obliged to take out Employer’s Liability Insurance to protect you against a claim for injury or illness that is thought to be covered by the employer’s negligence. You are responsible for your employee’s health and safety during their working hours and should they suffer a slip, trip or fall then you may be liable.

Ensure that you have also looked into these costs and requirements prior to employing someone from your home-based business.

Author: Doug Kelley is the Director for Bluedrop Services, specialist insurance brokers with in-depth knowledge and expertise in business insurance.

Published: September 22, 2022

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