Hello SOTGC community,
Last time we talked about Building Your Team: The First Chapter In Becoming An Entrepreneur. Today’s post is about when to outsource jobs and when you hire internally.
Having the right team in place to support you can make or break your business, especially when you are in start-up phase. Whether your team is comprised of outsourced trusted advisors, such as your accountant and attorney, internal employees, or a mixture of both, these individuals will play a vital role in your success.
So what is the best way to leverage your team with limited start-up resources?
Begin by examining which team members will be outsourced verses internal employees.
When hiring outsourced personnel, keep in mind the following:
- Consider working with other small businesses rather than large national firms – they typically have less overhead and are more cost-effective. The attorney I used to incorporate my first business had retired from working in a big law firm and had begun practicing out of his home. Since he didn’t have to pay a lot of additional overhead, he was able to pass the cost savings on to me. Another perk of a small business is that they can usually devote more time to their clients. This can be a huge advantage, especially if you are starting your first business, as you will most likely need a little more coaching your first time around.
- Seek opportunities to trade your goods or services rather than incurring additional expenses. For example, when one of my colleagues started his own sales and marketing company he was concerned about the initial capital outlay it would take to open an office. Initially cash flow was crucial to his business’ growth plan and he needed an alternative to forking over thousands of dollars for rent, deposit, office furniture, phones, office equipment etc… Instead of opening his own office immediately, he made a deal with one of his clients to sublease a few of their vacant offices in exchange for providing training to their sales team. This arrangement was a win for both parties.
- Don’t pay for services you don’t need! This may seem obvious, but all too often it is not. I think that committing to “the package deal” is the most common way that consumers commit to paying for services that they don’t actually need. “The package deal” is a bundle of services all included for one price. Oftentimes things are included in the package that may not really be of value to you. When I signed up for my cable service the largest and most expensive package included three free movie channels, along with DVR, HD channels and a few other perks. I don’t watch movies so it made more sense for me to go with a smaller package and add on the features I wanted individually, such as DVR or HD channels. Buying the largest package would have meant that I was paying for services I wouldn’t use.
Hiring members of your internal team can be one of the scariest parts of owning your own business. Not only can hiring be expensive and time consuming, but it also has long-term implications such as committing to payroll/payroll taxes as well as trusting that whomever you hire will maintain the level of brand integrity that you worked so hard to build. Finding the right team member at a price you can afford can also be a challenge. Many small businesses underestimate the value of hiring an intern; probably because they are worried that a college student may be too inexperienced or be too hard to train. I’ve found the exact opposite to be true. I have hired many interns, most of which have received college credit for their work time instead of hourly wages (note, each state has different local laws on unpaid internships). I have yet to hire an intern that wasn’t incredibly eager to please or that didn’t strive to overachieve. I found that the interns that I hired were very curious, which meant that they didn’t mind devoting a portion of their work time to doing tasks that a more experienced worker would dread – such as data entry. However, if you strictly need someone to do a repetitive menial task such as filing or data entry I would not recommend hiring an un-paid intern. This type of role will require some sort of monetary compensation since the learning opportunity is very limited. I like to structure my internships where the intern spends about half of their time doing tasks that I am too busy to do, such as update social media, enter lease comparables into our database, or update flyers. During the rest of the time, I try and have the intern shadow me. I take him/her to office tours, construction bids and presentations. This helps foster a continuous learning environment and constant curiosity. If there is a mutual fit, the intern is then an ideal candidate to hire for post-collegiate employment since they are already trained and familiar with the organization.
If you really need a more seasoned professional but are struggling to offer a competitive salary, consider offering a reduced salary with a profit share bonus or a commission structure. Most experienced professionals, especially in the sales and marketing fields, will prefer this structure since it gives them a sense of control over their income and doesn’t limit their earning potential.
Approach building your team the same way you would approach any other aspect of your business. Do your due diligence; look for creative solutions; and most importantly, look for true partnerships and relationships that can last a lifetime.
Photo credit: cmgrclass.syr.edu