Staffing a start-up

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A common mistake some entrepreneurs make when they start a new company is spending money on things they don't need.  I recently heard a caller to a radio program explain that one of the reasons he was having financial problems was he had bought a new pick-up truck for the carpenter business he was starting.  He had made virtually no money in this new enterprise, and he spent $30,000 for a new pick-up truck.  The radio host told him that was a huge mistake, and the business owner responded that he had to have a truck to do his construction business.  The radio host agreed that he needed a truck, but he didn't need a $30,000 truck he had to finance before he ever got his business off the ground.

New businesses make the same mistake when they purchase or rent office space or equipment.  They overspend on these items before they have any cash coming in thinking they have to have all the latest technologies and a prestigious office.  Actually, unless you are a retail store you may never need to meet a client in your office.  When I think of many of the service people with whom I do business I realize I've never been in their office or even know where that office is located.  You can work out of your garage or your basement when you start out.  For only a few dollars a month you can get a post office box for your business mail and add a second business line that comes into your home which will transfer your calls to your cell phone.  Most people will assume you are working in your office when they call. 

Another unnecessary expense some start-ups encounter involves their staff.  It is doubtful that most new start-ups need to hire a full-time person when the business first begins.  Many entrepreneurs do not realize all the expenses such a hire creates.  This person will need supplies, equipment, and training.  There will be additional taxes due with such a person now on the payroll that will eat into those early sales.  There are better options that hiring a full-time person right off the bat.

1. Get a virtual assistant.  There are now numerous companies providing virtual assistants who will handle the administrative tasks you need to avoid so you can be more productive with your time.  These will cost your new business much less than hiring someone, and if they don't work out you simply end your agreement.  You don't have to worry about unemployment compensation or any of the other issues that goes along with terminating an employee.  There is one thing to make sure of before you get a virtual assistant.  Have a detailed list of what you need this person to do and ensure that is clearly communicated before signing any type of agreement.
2. Get a part-time person.  Maybe you have enough administrative work for someone to do for 10-20 hours a week and you're not comfortable with a virtual assistant.  A part-time person might be the best option for you.  I know a person who did some work for a local professional in her home during the evenings on a part time basis.  The work was such that it could be done at her convenience which made it appealing to her.  
3. Hire a temp.  The benefit of having a temporary employee is you only have to worry about paying a salary to the temp's agency.  They handle all the taxes for the person.  You write out one check each week for the person's services, and you don't have to worry about it after that.  A second benefit is that you can hire the person for a particular project, and when that is completed his or her employment with you is completed as well.
4. Use interns.  If you are located near a college or university there may be some students willing to do intern work for the experience and so they can add it to their resumes.   Interns usually need a lot of supervision but they also bring a lot of energy to the position.  In some cases, you may find a great future team member at little or no financial cost to you.

Starting a new business requires a lot of time, and it may be appealing to hire someone to help.  I agree that it does take a lot of time, but chances are you still have more time than money.  You can't afford to pay someone to answer the phone for you.  Answer your own phone.  Order your own supplies.  Open and close your business yourself.  If your idea for a business is a good one the day will soon come when you will need to add team members.  At that point begin to add part time people or follow the suggestions listed above.  If that is successful it won't be long before you will be adding people, but at that point you should be able financially to do add people who will contribute even more to your business' bottom line.