How to Start Building a Team for Your New Business
"No man is an island."-John Donne-
The single scariest moment in starting a business is making that first hire. I can speak from experience. Hiring the first employee is more than just a dollars and cents calculation, you're bringing another human being's livelihood into your hair-brained dream. If you thought the decision to start your business is stressful, even the thought of eventually having to let go an employee you haven't even hired yet is enough to cause many aspiring entrepreneurs to lock up in fear.
However, hiring a human to help you make money is one of the most powerful things you can do as an entrepreneur. New businesses are the leading contributor to job growth in the United States. GE might add 2,000 employees to help them through a busy season, but thousands of businesses hire new employees every day, easily dwarfing those figures. For each of those employees, their new job is the opportunity for hope, success, and fulfillment.
Great things come from bold actions, so let's talk about how to get bold.
The first step in picking someone to add to your burgeoning team is to look within. Yes, this might seem counter-intuitive, but if you don't know how you work, why you work, your strengths and weaknesses, working for you will be a complete nightmare.
Everyone has strengths and weaknesses. Even if you're able to mitigate your weakness by being the most intelligent, hardest working person in the world, there are only so many hours in the day. Products need to be designed, shipments need to be fulfilled, customers need their servicing, and you simply can't do it all yourself.
One of the most effective ways to learn more about yourself is to do a personality test. You can find the top 5 here. The Myers-Briggs test is the granddaddy of them all, but it's starting to show its age. Since then, multiple tests have sprung up that get much more detailed, but they are also much more expensive. Now there is an entire cottage industry of personality profile tests that all claim to be the most accurate, but all of them try to get to the core of one issue: what do you prefer when you are working?
Under Myers-Briggs, I'm ENTJ, the "Field Marshall" personality. This makes me a nightmare to work for if you're a touchy-feely person. It means I'm a big thinker, but I struggle with execution. I expressive and engaging, but I have difficulty committing to and following a step-by-step process. I'm a motivator and leader, but I can also come off as harsh and brutally honest.
Fill a Need
One of the biggest mistakes I see first-time entrepreneurs make is to hire someone that's the exact same as them. Their thought process is that, "A, B, and C need to be done. I only have enough time to do A and B, so let me hire someone to do C." This thinking follows the thought process most of us use to delegate work around the office.
If you follow this model, you personally probably rank projects A, B, and C. Meanwhile, projects 1, 2, and 3 are being ignored. You might not even recognize them as priorities. They might even be "below" you. Therefore, you'll do one of two things: (1) hire someone that's exactly like you to replicate yourself in the business or (2) hire someone for as cheap as you can get them to cover up the areas that you don't see as high-priorities. Both of these are mistakes.
Your team needs to be a team of equals. If your team equal has the same personality profile, you're going to clash on the same issues. If they have a complimentary personality profile, but they aren't treated as an equal, then you're discounting their contribution to the team.
Find out the need you need to fill on your team, and then be willing to not only delegate, but empower that person to rise to the responsibility of fulfilling that need.
Recruiting for most early-stage companies is an after-thought. They hire based on immediate need, and not to fill a long-term strategic plan. I hear so many entrepreneurs talk about how "lucky" they were to find a key employee in the early stages. I've talked to many more entrepreneurs that couldn't find the right person to take them to the next level. Both situations boil down to luck.
With a proper recruitment strategy, you can cut down on the reliance on luck. If you attempt to hire from a place of need, you will only expose your company to those that are looking for employment at that time. Most successful companies are continuously looking for top talent. So be looking, even if you aren't looking to hire at that time. You never know when you might need some resumes in the hopper.
Make the Offer
Entire sections of the library have been dedicated to the recruiting and hiring process. I'm not going to waste your time by reciting the principles here except to say this: If you're hiring for a job, make sure that someone has the minimum capabilities to perform the job, but hire for personality, not necessarily skill set. Richard Branson famously said he hires for personality, not skill set. Skills can be taught to a willing person, but personality is ingrained and difficult to alter.
Once you find the right person, make the offer, and make it in writing. Don't rely on a handshake agreement. Send a letter, an email, even jot some notes on a napkin, but start off with setting expectations in writing. Your new employee is going to largely rely on you to communicate effectively with them, and you need to start off on Day 1 effectively communicating what you expect from your new hire.
Then, make sure you have the legal protections in place, just in case, such as
- Employment Offer Letter
- Confidentiality Agreement
- I-9 Immigration Form
- Worker's Compensation Insurance
- Unemployment Insurance
- Employment Agreement
- Definition of Benefits
- Assignment of Inventions
- Employee Handbook
The legal requirements for hiring employees varies by jurisdiction, so check with a licensed attorney before hiring your first employee.
Micromanagement is the disease which expresses itself in the symptom of high turnover. Your employees should know what is expected of them, but they should have the training wheels taken off at the first opportunity.
I generally set 3 big, measurable expectations for my employees. One is a financial expectation: how much money they should bill or how much they should strive to save the company. One is a time expectation: my favorite is to tell them that their job is to ensure that I leave by a certain time each day and don't have to work weekends. The final is a professional expectation: I want my employees to be fulfilled, so I want them to strive towards some professional recognition, and I want to help facilitate that opportunity for them.
Once you've hammered out these expectations, commit them to paper and give a copy to your employee. Your quarterly reviews just became much easier.
Building and refining your team never ends. You will always be attempting to improve. Some of these improvements may require members of your team to find new teams, and that's ok. As bad as it sounds though, don't stick with an employee just because they have been with you for a while. Some employees are critical in certain stages of your company, but don't have a place in another stage. That is not the employee's fault, and it's not your fault, but be willing to make that honest assessment and communicate it to the employee effectively. I will discuss how to manage these situations in another post, because they are common.
Building a team is a continuous process. You're never "finished." Most entrepreneurs don't start thinking strategically about their team until it is much too late, so I encourage you to discuss what you are looking for and what you need early in the process. Your needs might change, but the process of writing out what you are looking for will do wonders for when the time comes to act on it.
If we can help you build your company's team, I hope you will contact us at 205.545.2728 or at firstname.lastname@example.org!