There are quite a few steps to take when building a business from scratch. This article assumes that you have already gained a basic understanding of these steps and are at a point where you have some funds and are ready to put the building blocks of your business in place. If you’re not familiar with the basic steps to building a business, I encourage you to review the multitude of posts you can find on the web, and then come back and read this article again.
In most cases, it is paramount to build your business in steps, taking great care in how you spend the precious funds at your disposal, regardless of the source of your capital. By now, you should have a list of components that need to be implemented, such as the IT infrastructure, including but not limited to email accounts, a website, internal software systems (both “canned” packages and custom software), and plus. On the creative side, you’ll need to decide on your branding (logo and color theme). Then you most likely need business cards, brochures, letterheads, flyers, signage, and the like.
You can build a business in steps (or increments), but you need to find the right talent. In the beginning, it will be much better to find people who are competent in several different areas. The fewer resources you have to employ, in most cases, the lower your outlay. If one person can perform the functions of six or eight people, your budget savings should be significant. Later, when things are getting off the ground, you can replace these multi-talented people with dedicated resources, as each task is likely to become a full-time job. Overstaffing too soon can quickly put you out of business or put undue pressure on your business to get up and running sooner than it is capable of.
Let’s move the clock forward and assume your business is gaining ground. Let’s say your multi-talented people helped you get your business off the ground and now you’re replacing them with employees dedicated to specific business segments or departments. It will be easy to replace them because they will be waiting for you. Why? Because you brought them in as contractors. You have a lot of flexibility with the contractors. If it is in your interest and the interest of the contractor, you can propose a contract agreement to contract. Then, if things work out well, you could bring them in as part of your senior staff, as they will have a good understanding of your business. Or they could just move on. There are many advantages to using contractors in a case like this. If things aren’t moving as quickly as you’d hoped, you can reduce the contractor’s hours to stay within your budget. You can leave them loose if they are not working as expected. You’ll also save money because you won’t provide them with benefits, and in many cases, you won’t provide them with a workspace.
Another smart move may be to secure certain essential services on an outsourced basis. These days, you can even outsource your human resources department. Outsourced services are becoming more and more popular these days. Such services take the worry out of keeping up with ever-changing legal requirements, minimizing exposure to your fragile new business. The cost is typically much less than in-house staffing for comparable services. A good service company will come with a warranty (they will have an insurance policy) that protects your company in case the service company fails to meet current legal requirements, unintentionally creating liability for your company. It is not practical for internal staff to make such a guarantee. In that case, your business is assuming the risks of your hired employees.