It starts with something small: a passion-fueled blog, a consulting contract, a few freelance gigs. If you’re lucky, you build up some momentum and see opportunities to build something bigger. With those opportunities come greater responsibility, and individuals are often ill-equipped to handle such a workload by themselves. There comes a point when expanding a solo project becomes necessary.
While letting others into your business might feel uncomfortable, down the line it can feel liberating. Executed and operated properly, a business can eventually survive without you. That means collecting paychecks while spending your time on other ventures, while others do the heavy lifting in the business. It’s one among many perks of building a business from the ground floor.
Startup expansion does have its obstacles. Inexperienced entrepreneurs will find them lurking around every corner. Improperly handling any of them might mean troubles with finances — or worse, the law. Cautious new entrepreneurs should take measures to ensure that everything is above-board before getting too deep into the business. It all starts with a simple mantra:
Hire slowly, fire quickly
Of all operating expenses, employees cost the most. That’s for good reason, of course. Without them you’d never get anything done. Still, owners can help keep those costs controlled. The easiest way is to ensure that employees you hire stay with the company. Turnover can be costly, given the expenses of attracting and training employees.
To hire slowly might be to impede growth, but unless you need quick cash, initial growth shouldn’t be a huge priority. (And if you need cash quick, starting a business probably isn’t the best route.) Taking the time to learn about potential employees decreases the chances you’ll hire the wrong people. Bring in the right people from the start, and you’ll have people that can grow with the company and help the company grow. The wrong people will just impede growth for longer.
When employees clearly aren’t working out, fire them quickly. Yes, there’s a chance that they can turn things around, that they’re just going through something. A startup can’t afford to have such patience, though. It might seem cold-hearted, but this is your livelihood we’re talking about. The moment you feel that someone isn’t performing up
Be picky with what you outsource
Small businesses can’t afford the in-house services that larger businesses enjoy. Chances are you don’t have the budget for a personal assistant, or even an IT department. But that doesn’t mean you should outsource everything possible. There might be immediate cost savings, but in the long run those cost savings can turn into logistical nightmares.
Many outsourced services can cost you significant capital, when there are reasonably priced in-house solutions. For instance, you can use online payroll services instead of outsourcing to a paycheck company. Given the power of modern cloud software, that will end up saving you even if it means learning how to use and operate unfamiliar software.
Pay a lawyer
Again, with meager funds, owners must be choosy with how they spend money. Some services are more worthy than others, and perhaps none is as worthy as a lawyer. Not that you’re going to get sued left and right. Lawsuits can happen, but they’re not exactly common. The reality is that you might need to consult a lawyer about any number of things. Having one at the ready can be crucial.
How can you engage a lawyer? It’s not as though you can just sidle up to one and ask him to be available when you need to ask questions. Chances are you’ll need to establish a business relationship. What better way to start than when you need to file incorporation papers? There are company that will do this for you, but if they make a mistake you could be in some trouble. Finding a lawyer to do it might cost more money, but it will establish an important relationship for the future of your business.
Work ON the business
This last is the main message of the bestselling The E-Myth Revisited. If you keep working in your business — that is, doing the work that led to you starting the business — you’re going to fail. Like heavy machinery, businesses do not operate themselves. They need people at the helm, guiding the overall mission. That can’t happen if you’re busy being a technician.
The consequence of not working on the business is that it will start to bleed cash. Accounts won’t be kept up. Unneeded expenses will go unchecked. The business will not only lack direction, but will bleed cash. If you’re wondering why so many great-looking businesses fail, this is the No. 1 reason. Owners have to work on the business before all else.