5 Tips for Bootstrapping Payroll While You Build the Team You Need
Founders might be willing to starve until they hit it big but employees seldom are.
If you’ve chosen to bootstrap, you’ve prioritized a particular vision or path to growth over a cash infusion. But it also means you may not have the means to hire as many members of the team as you want or need. Here are five tips to help you responsibly grow your team as you expand.
1. Think long-term.
A plan is important for any startup, but it’s especially key for a company that doesn’t have a reserve of cash. Money can buy time, but it can’t buy execution, and your long-term company vision has to have a clear hiring plan that is tied to milestones. Michael Gerber’s classic The E-Myth Revisited stresses the importance of writing down every role that your company is going to need years in advance. You’ll often find in doing this exercise that you, as a member of the leadership team, are juggling half a dozen (or more) roles. But, the further you can forecast out how a division will grow or how a department will expand, the easier it will be for your team members to catch -- and retain -- a vision that will keep them grounded through short-term slogs.
2. Outsource or use software.
I’ve been in HR for many years and trust me, the entire HR process is time-consuming and complicated. You may not have someone on your team who can handle this, and people often underestimate how much time it will take to hire the right people and overestimate how much it would cost to outsource this task to someone else. Take a look at firms that help hire and find out what they can do for you. You can also use software like the kind my company, VocaWorks, provides to help you find candidates that are not available in the standard hiring channels.
3. Be thrifty.
Bootstrapped startups don’t have a “burn rate” because they’ve often had to focus on profitability from day one. That said, companies are made up of humans and, after a big win or a milestone, those humans can feel tempted to make a purchase or make a hire that wasn’t part of the plan we alluded to above. Beware of “deserving” upgrades to your situation and remember that bootstrapped companies have to push themselves through these growing pains. That might mean most of your team members are wearing multiple hats, and those benefits that are so visibly on offer at other companies aren’t available at yours ...yet. Team members need to be consistently reminded that this is a marathon, not a sprint, and that a thrifty mindset is key to surviving to profitability and beyond.
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4. Consider the fringes.
There are many great candidates companies ignore because they aren’t part of the “standard” pool of candidates.
Retired or semi-retired workers. More than ever, those who are calling themselves “retired” are looking for meaningful ways to contribute, be it in business or in a community. They have a wealth of experience and often scare off companies who think that experience comes at a high cost. But often, those workers are willing to work for less not just for more flexibility in hours, but for an opportunity that they wouldn’t normally be considered for.
Interns. There’s no shortage of advice to hire interns to keep costs down. But what is rarely discussed is how key management and motivation is with these workers. They also may still be in school and, as such, have a limited hours to work. Interns often work best in teams directed towards specific projects, supporting your permanent staff. This ensures that they have a reporting structure, discrete tasks to complete, and an overarching goal that should be oriented around their strengths while being just enough of a challenge to be exciting and engaging. They should also be given frequent feedback as this is one of the most-ignored parts of an internship at many firms. Taking the time to mentor them will not just earn you great social capital in the marketplace -- they’ll often share their great experiences -- but offer you the chance to pre-screen for permanent staff via an extended working interview.
Part of the plan we discussed above should be to consistently stop and examine how your short and medium-term actions and additions are aligning with your long-term values and vision. Your team will go from a flat structure that can easily fit around a conference table to (possibly) a large distributed team that communicates virtually most of the time. What was originally excitement about building something together will develop into discussions about growth plans and career paths, and the leadership team always has to keep a strong grasp on the company culture and not let it be lost in growth, as it easily can be. To sure to make time for mentorship and be open to feedback about how the company is growing and evolving.
The weakness of a bootstrapped business is also its strength. Having to focus on profitability and funding your growth through it keeps you laser-focused on doing the right things and helps you chase off distractions that are exciting, but don’t have a short horizon to profitability. By ensuring that you keep the right mindset in how you hire those to join your team -- and making sure they share and maintain your mindset -- you will greatly increase your chances of making it to the other side of bootstrapping: long-term profitability.
Entrepreneur Leadership Network Contributor