Startup Crawl is today. This week, of course, puts me in contact with a lot of startups and their issues and opportunities
Hey I just invested that $250,000 seed round in a kick-ass CRM system. Cool huh?
and the things I wish I could say that aren’t always welcome when you’re networking over beer. Like Startup Crawl reminds me of crawl, walk, run…which is my personal advice to every startup I’ve ever worked with and even the ones I haven’t. Too many startups choose internal operations and tools for the company they are today or they will be in a few years.
They buy enterprise level accounting software or payroll services for the five of them…it’s like buying a Porsche and driving 10 miles an hour. Or else—and this is common—they cheap out. “We don’t need no accounting, or hr, or compliance stuff….” They say, badly quoting Pink Floyd. We just need passion!
Passion just doesn’t fly well in front of regulatory bodies. Missing compliance details means you have to stop everything and make appointments to talk to federal and state agencies who want you to have information you may not have. It often does really bad things to your hopes of getting funding. And it costs you in fines. Plus, then you have to hire an expert to fix it—an accountant or HR expert. At the very least, bad software and services may take longer to use and eat up the savings of your original cost.
So, what to do?
Crawl, walk, run –
Do choose products and services that will scale with your business. There are products geared to small businesses that also have mid-tier and enterprise level options. There are cloud based products you can turn on and off. Find out how you’ll move to the next level long before you really need to.
Or if you do start with software that works for a small business but doesn’t scale, at least make sure you can extract all the information about your business and migrate it to the next software, so you don’t have to have someone do it manually.
And if you hire someone to provide services, figure out whether it’s enough or too much for your actual needs. If you don’t know your actual needs, find service providers who are flexible. Do they offering a one-size fits all monthly or annual amount? Do they allow you to purchase services as you need them? Can you grow the amount of hours needed per month as the company grows, or—god forbid—scale down services? All these questions can apply to legal, accounting, HR, IT, but they can also fit with sales, marketing support, manufacturing, even development. Hopefully, your business will grow. But the smartest businesses buy what they need for now—it’s like shoes. A little wiggle room.
Last year at this time, I wrote a blog about the Five Things Startups Need to Know which is as true today as it was when I published it during startup week a year ago. This year, the community has grown, a lot of startup leaders have grown, and it’s about looking to the future. Starting with Crawl.
