# First Hire Decision Framework

**Purpose:** Guided workflow for solo entrepreneurs to assess readiness for first hire based on revenue, time allocation, growth trajectory, and financial runway.

**Output:** `devforgeai/specs/business/team/first-hire-plan.md`

**Related References:**
- See `hiring-checklist.md` for hiring workflow
- See `role-definitions.md` for core role definitions
- See `team-building-fundamentals.md` for core principles
- See `contractor-vs-employee.md` for classification decision framework (STORY-565)

**Integration:** EPIC-077 (Financial Planning) with graceful fallback to manual input

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## Legal Disclaimer

**IMPORTANT:** This framework provides educational guidance only. It does not constitute legal advice, employment counsel, or jurisdiction-specific recommendations. Always consult with qualified legal and tax professionals before hiring employees. Employment laws vary significantly by location and business structure.

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## Decision Factor Questionnaire

The framework collects inputs across four dimensions to inform the hiring decision. Each factor follows a consistent structure: **Prompt**, **Response Options**, and **Validation**.

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### Factor 1: Revenue Threshold

**Prompt:** What is your current monthly net revenue?

**Response Options:**

| Revenue Range | Stage | Implication |
|---------------|-------|-------------|
| $0 | No Revenue | See Alternative Paths section |
| $1-$5,000/month | Early Stage | Building foundation |
| $5,000-$15,000/month | Growth Stage | Scaling operations |
| $15,000+/month | Established | Ready to delegate |

**Validation Rule:** Non-negative value required. Zero revenue routes to alternative guidance (co-founder/equity-based hiring).

---

### Factor 2: Time Allocation

**Prompt:** What percentage of your time is spent on non-core tasks (administrative, repetitive work that could be delegated)?

**Response Options:**

| Percentage | Assessment | Hiring Signal |
|------------|------------|---------------|
| 0-20% | Focused on Core Work | Low priority |
| 21-40% | Moderate Delegation Opportunity | Consider planning |
| 41-60% | Significant Opportunity Cost | Strong signal |
| 61-100% | Critical Signal | Hire soon |

**Validation Rule:** Value between 0-100%. High percentages indicate strong hiring need.

---

### Factor 3: Growth Trajectory

**Prompt:** What is your month-over-month revenue trend?

**Response Options:**

| Trend | Definition | Hiring Implication |
|-------|------------|-------------------|
| Declining | Revenue decreasing month-over-month | Not yet ready |
| Flat | Stable revenue (within +/- 5%) | Wait and monitor |
| Growing | Revenue increasing 5-20% month-over-month | Favorable signal |
| Scaling | Revenue increasing >20% month-over-month | Strong signal |

**Validation Rule:** Required selection. Declining trend routes to not-yet-ready outcome.

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### Factor 4: Financial Runway

**Prompt:** How many months of operating expenses can you cover with current cash/reserves?

**Response Options:**

| Runway | Status | Decision Impact |
|--------|--------|-----------------|
| < 3 months | Critical | BR-001 override: Not Yet Ready |
| 3-6 months | Caution | Hire with warning |
| 6-12 months | Stable | Proceed with confidence |
| 12+ months | Secure | Optimal timing |

**Validation Rule:** Positive value required. Runway < 3 months forces stabilize-first outcome per BR-001.

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## Decision Tree Logic

The framework evaluates the four decision factors to determine one of three terminal outcomes.

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### Decision Flow

```
                    [START]
                        |
        +---------------+---------------+
        |                               |
    [Runway < 3 months?]           [Runway >= 3 months?]
        |                               |
    [NOT YET READY]              [Evaluate Revenue, Time, Growth]
        |                               |
    [Stabilize first]           +-------+-------+-------+
                                |       |       |       |
                            [High revenue +  [Mixed  [Zero Revenue]
                             High growth]     signals]     |
                                |               |        |
                           [HIRE NOW]      [HIRE SOON] [ALTERNATIVE
                                |               |        PATHS]
                                +---------------+----------+
                                         |
                                 [GENERATE OUTPUT]
```

---

### Terminal Outcomes

#### Outcome 1: Hire Now

**Conditions (ALL must be met):**
- Runway >= 6 months
- Monthly revenue >= $5,000
- Time on non-core tasks >= 40%
- Growth trajectory: Growing or Scaling

**Output:** Immediate hire recommendation with job description template.

---

#### Outcome 2: Hire Soon (3-6 months)

**Conditions (ANY combination):**
- Runway >= 3 months
- Mixed signals (e.g., high growth but low revenue, or high time burden but declining growth)
- Revenue < $5,000/month OR growth trajectory not clearly positive

**Output:** Prepare-to-hire roadmap with 3-6 month action items.

---

#### Outcome 3: Not Yet Ready

**Conditions (ANY triggers):**
- Runway < 3 months (BR-001 override)
- Zero revenue (BR-002 routes to Alternative Paths)
- Declining growth trajectory

**Output:** Stabilization plan with freelance/contractor alternatives.

---

## Business Rules

The framework enforces three business rules to ensure hiring decisions align with financial reality.

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### BR-001: Runway Override (Critical)

**Rule:** If runway < 3 months, override any hire-now recommendation to "not yet ready."

**Rationale:** Hiring without sufficient cash reserves risks business survival.

**Action:** Display stabilization warning with freelance alternatives.

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### BR-002: Zero Revenue Alternative (High)

**Rule:** If revenue = $0, route to Alternative Paths section instead of salaried-hire recommendation.

**Rationale:** Equity-based or co-founder arrangements are more appropriate when business has no revenue.

**Action:** Provide co-founder search guidance and equity split considerations.

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### BR-003: Salary Budget Calculation (High)

**Rule:** Maximum monthly salary budget = 30% of monthly net revenue (configurable threshold).

**Formula:** `Salary Budget = Monthly Net Revenue × 0.30`

**Validation:** Budget percentage must not exceed configured threshold.

**Warning:** If hire would reduce runway below 6 months, flag affordability concern.

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## Output Template

The framework generates `devforgeai/specs/business/team/first-hire-plan.md` with the following sections.

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### Section 1: Role Recommendation

**Format:** Based on decision tree outcome (Hire Now / Hire Soon / Not Yet Ready)

**Rationale Paragraph:** Links recommendation to user's specific inputs:

| Input Factor | User Value |
|--------------|------------|
| Revenue Assessment | $[MONTHLY_REVENUE]/month |
| Time Allocation | [PERCENTAGE]% on non-core tasks |
| Growth Trajectory | [TREND] |
| Financial Runway | [MONTHS] months |

---

### Section 2: Job Description Outline

#### 2.1 Role Title
- **Placeholder:** [First Hire Role Title]
- **Examples:** Operations Manager, Marketing Coordinator, Customer Success Lead

#### 2.2 Key Responsibilities (minimum 3)
1. [PRIMARY RESPONSIBILITY - Core business function support]
2. [SECONDARY RESPONSIBILITY - Administrative/task delegation]
3. [TERTIARY RESPONSIBILITY - Customer/user-facing activity]
4. [ADDITIONAL RESPONSIBILITY - Role-specific task]

#### 2.3 Required Skills
- **Hard Skill 1:** [Proficiency level]
- **Hard Skill 2:** [Proficiency level]
- **Soft Skill 1:** [Proficiency level]
- **Soft Skill 2:** [Proficiency level]

#### 2.4 Compensation Range Methodology

**Calculation:**
- Monthly Net Revenue: $[REVENUE]
- Salary Budget (30%): $[BUDGET]/month
- Annualized Range: $[BUDGET × 12] - $[BUDGET × 12 + BUFFER]

**Note:** Actual compensation depends on candidate experience, location, and market rates. Consult salary surveys for role-specific benchmarks.

---

### Section 3: Affordability Assessment

#### 3.1 Financial Summary

| Metric | Value |
|--------|-------|
| Monthly Net Revenue | $[REVENUE] |
| Monthly Burn Rate | $[BURN_RATE] |
| Current Runway | [RUNWAY_MONTHS] months |
| Maximum Salary Budget (30%) | $[SALARY_BUDGET]/month |
| Post-Hire Runway | [POST_HIRE_RUNWAY] months |

#### 3.2 Six-Month Warning

If post-hire runway < 6 months, display:
> **WARNING:** This hire would reduce your runway below 6 months. Consider:
> - (a) delaying hire
> - (b) reducing hours to part-time
> - (c) increasing revenue/cash reserves before hiring

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### Section 4: Action Items

#### For Hire Now:
1. Post job description to [RECOMMENDED PLATFORMS]
2. Screen candidates using [INTERVIEW GUIDE]
3. Make offer within compensation range
4. Onboard using [ONBOARDING CHECKLIST]

#### For Hire Soon (3-6 months):
1. [MONTH 1]: [Specific action]
2. [MONTH 2]: [Specific action]
3. [MONTH 3]: [Specific action]

#### For Not Yet Ready:
1. [STABILIZATION STEP 1]
2. [STABILIZATION STEP 2]
3. [FREELANCE ALTERNATIVES]

---

## Alternative Paths (Zero Revenue)

When revenue = $0, traditional salaried hiring is not viable. Consider these alternatives:

| Alternative | Description | Best For |
|-------------|-------------|----------|
| **Co-Founder** | Find a complementary partner who contributes equity/sweat equity | Long-term vision, shared risk |
| **Equity-Based Hire** | Offer future equity in lieu of current salary | Strong cash constraints, high growth potential |
| **Intern/Accelerant** | Low-cost talent with learning opportunity exchange | Training needs, limited budget |
| **Freelance/Contract** | Pay-per-project instead of salary commitment | Variable workload, test before committing |
| **Delay Hiring** | Focus on revenue generation before adding headcount | Early validation stage |

---

## EPIC-077 Integration

### Data Source Reference

**Primary Path:** `devforgeai/specs/business/financial/financial-projection.md`

**Required Fields:**

| Field | Description | Type |
|-------|-------------|------|
| `monthly_net_revenue` | Current monthly revenue after expenses | Numeric |
| `monthly_burn_rate` | Total monthly operating expenses | Numeric |
| `runway_months` | Months of cash reserves at current burn rate | Integer |

---

### Fallback Mechanism

**Condition:** If EPIC-077 data file does not exist or required fields are missing.

**Fallback Action:** Prompt user for manual input:
1. "What is your current monthly net revenue?"
2. "What are your total monthly operating expenses?"
3. "How much cash/reserves do you have available?"

**Validation:** Apply same business rules (BR-001, BR-002, BR-003) to manually-input data.

---

## Numbered Prompt Summary

For execution, the framework prompts the user in the following order:

| # | Question | Valid Input Range |
|---|----------|-------------------|
| 1 | What is your current monthly net revenue? | $0-$1M+ |
| 2 | What percentage of your time is spent on non-core tasks? | 0-100% |
| 3 | What is your month-over-month revenue trend? | Declining/Flat/Growing/Scaling |
| 4 | How many months of operating expenses can you cover? | 1-24+ months |

**Output:** After collecting all four inputs, the framework evaluates the decision tree and generates the output document at `devforgeai/specs/business/team/first-hire-plan.md`.
