Staffing a Startup: Getting to Operations

As an entrepreneur, you’ve been fighting the good fight and trying to get your business started. You’ve done well. Now, it’s time to get some more help. You are probably driven to address a very near-term, specific problem. That’s a necessity of developing your product.

Keep in mind that investors look at how you are operating the business as well your technical progress. Keep a long-term perspective in mind. As your product matures and proceeds to being sold, you need to staff several functional organizations.

Functions to be Covered:

LEADERSHIP TEAM – most people are way too quick to have a business card printed with the title CEO (Chief Executive Officer). I’ve met people with a three-person organization and the title CEO. Build a great leadership team beyond the corner office.

FINANCE – including areas like Finance, Accounting, Audit, Administration, and Estimating. Businesses are in business to make money. You need someone qualified to keep track of it for you.

PRODUCT DEVELOPMENT – including Technology Research, Product Design, Product Development, and Product Verification.

PRODUCTION – include Operations, Facilities, and Inventory. Even if you intend to subcontract the work out, you need someone knowledgeable to keep an eye on the subcontractor.

QUALITY AND PRODUCT SUPPORT (OR CUSTOMER SERVICE AND SATISFACTION) – once you get the product in the hands of customers, problems will come up. Spare parts, returns, and warranty are important.

HUMAN RESOURCES – think about Hiring, Total Compensation (pay, benefits, rewards), Employee Development, etc.

SALES AND MARKETING – this includes Sales, Marketing, Web Presence, IT, Communications, Advertising, and Proposals.

LEGAL – the legal department manages Contracts, Intellectual Property, and Compliance.

PLANNING – both Strategic and Operations planning.

SUPPLY CHAIN – managing Subcontractors and Suppliers. You’re going to have to buy things including raw stock, purchased finished, and services.

ADVISORS AND CONSULTANTS – both technical and business.

When Should I Add Each of These Functions?

The answer is different for each business. However, look at the current priorities and what’s coming up next. Answer the mail and anticipate. A good coach or mentor could be very helpful. Also, a good advisory board should be considered. Just don’t let important topics go unaddressed for long.

Where Should I get Additional People?

  1. You’ve got a network … use it. Let people know what you’re looking for.
  2. Direct hire yourself or use an agency to find the kind of talent you need.
  3. Consider the use of contract labor. Many companies build the “Layer Cake Model” with direct hires, contract labor and overtime as major components that can be manipulated to achieve the desired level. Don’t forget about the potential to convert from contract to direct.
  4. Subcontract the work. Several of these functions can be subcontracted (Accounting, Legal, HR). Others should definitely be kept in-house. Consider the company’s long-term strategy.

 


ABOUT THE AUTHOR: Mr. Czerniak retired after a successful career that culminated in fifteen years of experience as an internal consultant and “change agent.” He is currently a volunteer at the Macomb-Oakland University Incubator, the Troy Historic Village and Historical Society, and the Michigan Floral Association.

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