4 Things Your Company Can Do Without When Starting Up

Running a lean company in the beginning may require some corners to be cut.

learn more about Karim Abouelnaga

By Karim Abouelnaga

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Starting a business requires a lot of guts, patience and creativity, especially for startups with limited resources.

With so many changes still to be faced and iterations of your idea yet to come, you don't want to spend a disproportionate amount of your time creating bureaucracy and processes that you will only end up changing. Looking back, there are a handful of things that we did at Practice Makes Perfect -- a nonprofit that partners with schools and operates their summer school program in inner-city neighborhood – when we first started out that we would never do as an established company. However, I can't imagine getting our business to where it is today without doing them. The beginning was all about the lean startup. If we had to start over, I wouldn't change a thing about them.

Here are four things you can delay for a leaner startup:

1. Payroll provider

Trying to be too legitimate from day one means you're going to burn more cash. We didn't start with a payroll provider until we had our second hire a few months into his role. Though doing payroll gets easier when you have a company calculating the deferrals and the taxes to withhold it also comes with a hefty monthly fee and additional transaction costs. I have friends who have started companies and gotten up to five people before they actually signed on to a payroll provider. I don't know that I would've waited that long, but I know for sure it is one of those things you can put off for a bit.

2. Your dream domain name

It would be nice to have your dream domain name from the start of your business, but the truth is something close to it is most likely fine. Since we had a common phrase as our company name, we quickly put ourselves in a boat where our domain wouldn't be available at a normal rate. Instead of buying the Practice Makes Perfect domain at the very beginning, we settled for www.pmpnyc.org. We didn't actually buy the domain we wanted until we were two and half years into the company's development. Luckily, we were able to get it for $800 when we were ready. It wasn't terrible, but still more than you should be spending on a domain name when you first start a business that might not succeed.

3. Team member professional development

As a smaller company, you can generally get away without a formal professional development policy. However, as you start to get bigger, you need to start having a plan in place for how people will access resources within the company to grow and develop. At the beginning it is also rare to get a person who fits the company culture and has all of the skills to do their job with the amount of compensation you're able to offer. Training helps fill the skills gaps that are needed.

4. Company phones and computers

If not getting a company computer or phone isn't obvious to the new team member, they probably don't know they are interviewing at a startup. For every single hire we made up to our seventh or eighth one, we reminded them to bring their own laptop to work on day one. This saved the company the overhead cost of purchasing and having to account for any hardware. As you get larger, your teammates expect the company to provide the tools that they need to be able to do their job effectively.

Some of the corners we cut in the beginning would make me cringe if we cut them today, but they were essential for a faster launch. Today, we dot almost every "I" and cross almost every "T," but it is absolutely OK not to start that way.

Karim Abouelnaga

Founder of Practice Makes Perfect

Karim Abouelnaga is the founder of Practice Makes Perfect, a benefit corporation that works to narrow the achievement gap for low-income public schools. 

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