Like every entrepreneur, you began running your startup alone (or perhaps with your spouse or other partner). But eventually, it's time to hire your first employee.

That's great--but also treacherous, because hiring the wrong person or creating the wrong first position can be costly.

You're willing to live without a steady paycheck, but your new hire won't. In addition to having to meet payroll every two weeks, you'll owe payroll taxes, too--and commit to paying insurance premiums and other benefits. And that's if everything goes well. If the hire doesn't work out, you'll also pay severance and play lots of catch-up fixing the errors and recovering from lost opportunities--and incurring further distraction as you search for a replacement. And if things really go badly, you could find yourself in litigation or being investigated by the Equal Employment Opportunity Commission over allegations of harassment or fostering a hostile workplace.

So, consider the following before you proceed with that first hire.

1. Are you sure you need to hire someone? Consider outsourcing the work you need done, or hiring temporary workers through an agency, or hiring contract workers, also called freelancers. Lots of functions can be outsourced, including accounting, graphic design, website services, marketing, even manufacturing. The Internet offers thousands of sites to help you find the services you need--including services to help you find the services.

2. What is the position you want to create and fill? The ideal person you hire will be someone who can relieve you of tasks that are interfering with your ability to grow, so you can focus on functions that, truly, no one else can do. Conversely, think about tasks you need done but which you can't do because you lack the skills. In other words, don't hire another you. Instead, hire someone with complementary, rather than redundant, skills.

3. Look for candidates who are flexible, who thrive when there's no structure, and who will make the job their own. You want people who will get the job done, no matter what the job is. "That's not my job" is an attitude that will kill any young business. Thus, you're looking for someone who has initiative and won't require a lot of hand-holding.

This reminds me of my own first hire. My wife, Jean, and I started our financial planning firm 30 years ago, and it was just us for the first five years. But as we got busier, we knew we couldn't continue handling everything by ourselves. So in 1990, while speaking at an industry conference, I mentioned that I was looking to hire someone. One advisor in the audience perked up--and six months later he left his management position with a much larger firm and moved his family 100 miles to join us. Our space was so small that his "office" was actually a closet that held our coffee machine and photocopier. Ed quickly took on work I had been handling, and one day I realized he had virtually taken over the daily operations of the company. So I made it official, and now, 25 years later, he's still president of my firm. That's what you want: Someone who can help you turn your company into what you envision it to be.

4. Rely on networking. You might not have the opportunity to announce your hiring needs from the speaker's podium as I did, but you certainly attend such conferences--and you can meet lots of people there. Tell everyone you encounter that you're hiring and ask for referrals. That includes your attorney and accountant too, and friends and family.

And once you have some employees, ask them to recommend others. My firm even offers our employees cash bonuses of thousands of dollars for referring successful new hires.

Successful hiring is time- and labor-intensive, but it's crucial to the success of your enterprise. When you're ready to do it, following these guidelines can help you hire successfully.