Entrepreneurs set out on their own for two primary reasons – they have an idea, and /or they are not happy working for anyone else. During the recent U.S. recession, a third catalyst – layoff from a job and failure to find another – spurred the creation of nearly four million small U.S. businesses. Most of these entrepreneurs were convinced that their drive, their creativity, and their expertise in their new company’s concept would spur financial success.
Perils of Entrepreneurship
Most were wrong. In fact, 80 percent of small businesses fail in the first year, because these entrepreneurs fail to prepare, and fail to acknowledge what is lacking in their own skill set that is needed for their business to thrive.
Who to Hire and When
The decision to hire managers is highly dependent on an understanding of your own skill sets as entrepreneur. Let’s look at a few examples.
- You’ve designed a unique, feature-rich mobile app that enables blogging from a smart phone. You know how to build a blog, and how to create the app, but not how to write a press release, and market your product. While hiring for this marketing position might seem something you could put off until you actually have a product ready to sell, how well have you researched its uniqueness, competition and audience? Do you know, for example, that yours is the only blogging app that offers editing of video uploads? Have you determined how many bloggers want to post from their smart phones, where they reside and their ages? Hiring a marketing manager to determine that yours is a product with a large enough audience to succeed is one of your first steps. While this could be a consulting or temporary hire, this hire must be made at the inception of your firm.
- You start your business on a shoe string, initially work out of your home, but you’re not going to have enough funds to create products AND pay for advertising AND the expanded office space you’ll quickly need. You’re going to need a loan. For that you’ll need a business plan. If your accounting and business management skills are not up to this detailed, momentous task, hiring someone who can do this for you is an additional step you can take.
- You have a marketing manager now, who has surveyed focus groups and completed research to determine that your app is unique, and would have a wide audience. This person has planned a press release, the social media strategy, and the advertising campaign. Do you need any other manager at this point? Yes, you need a sales manager – unless of course, you have the skills, time and interest to get on the phone or visit face-to-face with prospective customers who respond to the marketing. By the time your first press release and your first ad appear you should have a sales manager – someone who can turn those inquiries into sales, and as sales and response grow, hire a sales team.
The guideline, then, for determining when to hire managers is the honest appraisal of your own skills. Where you lack the skills, the interest or the time, managerial assistance in these key areas should be made at or near the start of your business launch.