The caption may sound a bit obvious. Clearly you do not plan to hire employees until you really need to hire employees. However, there is more to this issue than what immediately may come to mind. Employees are a large expense, and most new businesses try to avoid incurring large expenses. However, employees are also valuable resources that are required for certain business launches.
When I say “don’t hire until you are prepared to hire,” I mean that you better make sure you have the systems in place to pay your employees and all required taxes and insurance (including unemployment insurance and workers’ compensation). The penalties associated with failing to follow the rules can literally put a start-up out of business.
Saving a few dollars by hiring “independent contractors” that you know to truly be employees is definitely a penny wise approach. It’s one of those areas that many new businesses try to skirt because it seems unlikely to be a problem. But, when it is a problem, it’s a big problem. Doing things the right way might seem like a hassle, but, in reality, it’s called “the right way” for a reason.