Monday, June 27, 2011

Bootstrapping: Prepare to Hire

I saw an article on Entrepreneur.com about bootstrapping. I admittedly disagreed with some of the details in the article. Why? I view bootstrapping as a means of keeping expenses low and cultivating a laser-like focus on the business. That means, as a self-funded entrepreneur you still approach the business the same way you would if you had access to lots of cash. You want to view your business as an entity independent from yourself. Eventually it will truly be because you will continually work towards that goal. Here's an excerpt from the article, Five Rules for Bootstrapping:

"Understaff
In the beginning of a company’s life cycle, the entrepreneur must be the chief salesperson, chief marketing offi¬cer, chief fulfillment officer, chief financial officer  and the person in charge of cleaning the toilet every day. To bootstrap successfully, entrepreneurs must sacrifice their own vanity and do all of the jobs that previously had been done by a large support team."

Obviously that last sentence assumes you came from a large corporation. Smaller organizations do not have a large support team.

Okay, I agree that in the beginning, often the start-up entrepreneur handles all roles. But no one is good at everything. The quicker you can outline the process for roles you are not particularly good at or that take up a lot of time, the quicker you can offload those roles and responsibilities. YOU CANNOT GROW DOING EVERYTHING YOURSELF. It is impossible. There is only one of you and you don't want to adopt the mindset that you must do everything. If you do so, you will be the bottleneck that hinders your company's growth. As a start-up entrepreneur, you may have to for a short period of time. However, there are so many entities out there that you can outsource to, why not do so? If you are a great salesperson and, by focusing on sales can drive revenue for your company, why not focus on sales? The best way to ensure that things get done in the manner you like is to document how you do it. Then you can better explain what you need, how you want it done, and the deliverable(s) you expect.

So yes, with bootstapping and as a self-funded entrepreneur, you should understaff. You should have an organization chart showing the different departments and positions. At first you (or you and a co-founder) will handle all the roles. Then, as your business allows, you fill the positions with freelancers, outsourced entities, part-time personnel, etc. Eventually you hire full-time personnel. You hire behind the work. That means the work is there and is done by someone else (i.e., you), then you hire (or outsource) when that work takes up too much time. When that same work reaches the point where it's a full-time job,  you hire someone on as an employee. (The exception to this is executive management or a critical role to the business that you just don't do even moderately well. If you can entice someone to join your team who can really help drive the business, get them when you can. You may be able to convince them to work part-time or weekends or "consult" to  you until you can pay for them to join full-time.) 

 



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