There are many traps when setting up your own startup dream team. Entrepreneurs want to share the excitement with friends and like-minded people. But mixing friends and business can get messy, writes Alan Manly, author of The Unlikely Entrepreneur.
Those like-minded people won’t challenge you. Similar personalities are also often budding entrepreneurs. They want training and experience before they become your first external spin off. They’re remembered as the scoundrel who bypassed business set up costs and stole your intellectual property. Startups are not the place to gather friends. Economist Milton Friedman knew, “The business of business is business.”
You will need to be jack of all trades and the ring master gathering star performers who can carry the show. Entrepreneurs provide the leadership and model work ethic. Careful monitor yourself as entrepreneurs are prone to micromanaging. Part of your value is in the knowledge of yourself. Your strengths, where you need skilled helpers and your limitations.
“Accounting is the language of business,” Warren Buffet asserted. The cold hard reality of business is what accounts are about. The financial and taxation advice they offer is essential. The best accounting focus for a startup entrepreneur is cashflow, cashflow, cashflow. Give any accountant enough cashflow and they will work out the rest.
Often we call them marketing or customer engagement. Sales drive a company, and selling means there are customers who have paid. Selling a new product from a startup is a multitasked nightmare. Usually, the passion for such a task is initially held in the heart of the startup entrepreneur. Once a few customers sign up more need to follow. Sales folks often have thespian qualities. These people know, just as Oprah Winfrey does, “Every day, you’re only as good as your last show.” You need to recruit salespeople who understand that. Easier if it is not a friend.
You don’t get a lawyer to get out of trouble, but to avoid trouble. Startups are risky businesses. You need a lawyer to reduce those risks, or to at least understand them. You need a lawyer to review the business plan long before you even start. The business plan will have the upside expanded in detail but it also needs the downside. This outlines ‘who gets what’ and the consequences if all goes wrong. Once you start it may be too late to change things. Legal issues can sap the life out of your startup, or worse – your personal finances. Better to hear bad news from your lawyer than from someone else’s.
This person runs the startup day-to-day. They solve crisis after crisis. An operations manager intuitively knows that startups don’t have resources on the ground nor reserves in the bank. They just keep on keeping on. Very often the startup entrepreneur is the initial operations manager.
All these positions should be in your business plan. You also need to analyse the benefits of bringing skills in house versus leaving them as outsider advisers. As well as your insider list, an outsider list is worth analysis. Many entrepreneurs seek mentors to short-cut the experience journey. Investors are another outsider who, subject to the startup being successful for say – a year, would buy-in. Outsider investors depend on the unique skill of the startup entrepreneur. Then of course, there is lady luck, she is always welcome on board.
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