John B from Wisconsin came out of the corporate world to become an entrepreneur. For years he felt his soul being sucked out him through the daily battle with corporate processes and intrigue. 5000 layers of management approval was required to wipe his keyster and it was driving him crazy. So when he set out to start his business, treat what did he do? He went about recreating his corporate hell and saddled himself with an immense amount of salaries and talent he wasn’t qualified to hire. We build what we know, click even if what we know sucked.
As an example, try John was not a CPA and he knew that the franchise corporation he came from had a ton of these people, so they must be important. He set up interviews, printed out job requirements for a franchise Corporate Controller and then talked to candidates for a job he knew nothing about. Eventually, he settled on hiring Mark, who not only had experience in his new business, but his old one as well. Mark’s resume was so impressive it practically sparkled. He knew franchising, entrepreneurship, finance, accounting, Swahili, juggling, ice sculpting…and the list went on and on. In the interview Mark assured him that he was a CFO’s CFO and was a master of that all-important controller word, NO! John was stoked, Mark was his answer and one less area he would have to worry about. From that day on, Mark managed the finances…from that day until they discovered that they had run out of money; oops! You see it turns out that Mark’s “no” was more like a “kinda, maybe, sorta, no.” With no guidance at all, the rest of the staff spent without restraint building the best stuff for their department. Mark had put together a budget, but it was completely based on a series of wish lists with zero thought put towards the top or bottom line. John was screwed.
John however survived Mark and his terrible mistake of staffing up for every position and here is how. John sat back and relooked at the areas of his company that had to be built. He then listed his entrepreneurial abilities and what he felt confident he could build on his own. This will give him a smaller list to work from. With that in hand he broke the remaining list in categories such as, design/packaging, marketing, sales, franchising, operations, finance, training, etc. With that in hand he went to the net and searched for the costs of outsourcing versus staffing. In some cases, operations, he knew that it had to be someone on the inside. He also found that in building a brand it was more cost effective to have someone working on design and packaging in house. For finance, he realized that, as his company was small, they could use their outside accountant to handle a majority of their tasks including bookkeeping. His staff grew in only the areas absolutely necessary.
So it’s pretty simple. Regardless of if you are starting a franchise or another entrepreneurial business, write down every aspect that will be needed to open your business from legal to service. Put your name next to everything you can take care of yourself. Then spend the time to research how other companies took care of things when they started. Get some quotes on having the staff versus having the consultant. Think about your need to have daily interaction with those positions that can’t be accomplished via email or phone calls. Start with your smallest staff possible, but don’t skimp. It would be better to have one too many people, then to lack input from a key area. You are not doing this alone! Once you have your list of hires, use your mentors and internet research to help you formulate solid descriptions of who you need. Then hire only someone who has those skills, while keeping in mind that as an entrepreneur in a start-up you may have to accept someone who is close to skilled up, but is able to develop. With the rest of the list, start looking for companies that can fill the remaining tasks and can prove it. Starting a franchise or your own business the team that will make this happen is going to be part inside and part outside and that is the way to go.