Whether you’ve raised a few million or you’ve bootstrapped your way into business, your responsibility as a founder is to leverage your company’s resources for maximum gains.
A mediocre founder spends money to maintain the status quo. A smart founder knows that every dollar coming out of their pocket needs to be justified by a healthy ROI.
While the reality is a little more complex than “you gotta spend money to make money”, these five investments have proven themselves to have high returns in the short and long-term for growing businesses.
1. Cover Your A&$ and Protect What’s Important
If headline-grabbing IPO blunders and startup lawsuits have taught us anything, it’s that quality legal advice is an invaluable asset to any startup. When you are disrupting an industry and forging into the great unknown, you run the risk of ruffling a few feathers and potentially making a few missteps.
While reliable legal advice is a valuable investment, be sure to protect your bottom line by negotiating first and fixing a price, just like you would with any other contractor. Look for a lawyer with experience working with comparable startups. The challenges faced by a disruptive startup are very different than those that enterprise clients are confronted with, and you need a lawyer who understands your unique needs. From intellectual property to stock options, real estate to contracts, a good lawyer is an essential investment for any startup.
2. No People? No Profit.
It’s really quite simple: find the best people, and hire them – even if you need to take a paycut to make that happen. Make no mistake, the success of your venture relies on the quality of the people executing your vision.
Startups have very unique HR needs. Among other things, you need highly-adaptable, flexible staff. Margaret Heffernan, a serial CEO, explains that “you have to find–and keep–people who are great at scanning the horizon, spotting a need, and filling it, whatever it is”. Individuals like these are often in high demand, and you need to be prepared to make some sacrifices in order to onboard them.
In order to hire 10×10’ers, like Harley Finkelstein does at Shopify, you need to be prepared to make an investment in salary dollars. Paying the right people is an investment in your future profits and, therefore, your own future salary.
3. Perks Are Overrated
Leaders touch a heart before they ask for a hand – John C. Maxwell
Staff satisfaction isn’t just about throwing money and pricey perks at your staff, it’s about making a regular, genuine effort to connect with them in a meaningful way. You can make the effort to hire the best people, but they are only an asset to your company as long as they are engaged and motivated.
Invest in shared activities like team offsites. It doesn’t take too much of an investment to rent a house to bring your team together and share ideas in a creative space away from the office. “I think the change in environment does the trick”, explains Ryan Graves, Head of Operations at Uber, and fan of offsite team events. “Offsites are huge for creating that personal glue that makes working together so much more fun, and more productive. often times it gets people to think outside of their role and contribute to larger company issues.”
Take the time to remind your team of the integral role they play in the company’s success by giving them the opportunity to share their creative suggestions for the future of the business. This small investment of time and money will pay large dividends when it comes to employee morale.
4. Make a Lasting Name for Yourself
Making the commitment of time and resources necessary to build your personal brand isn’t just for the benefit of your current startup. Developing a strong, recognized identity in your industry will benefit you throughout your entrepreneurial career.
Instead of viewing time spent doing interviews, cultivating your online presence, and speaking at conferences as selfish, consider it a way to build your brand and position yourself as a thought leader in your space. This influence will be an advantage to any venture you undertake.
If you’re really feeling pressed for time, consider hiring PR support to source press and speaking opportunities for you, allowing you to get your name out there without a major investment of time.
5. You Can’t Afford to Do Laundry Anymore
As the leader of a company, your time is at a premium. As Jason Cohen says, “your time is worth $1000 an hour, and you should act accordingly”. Your focus should be on activities that propel your business and your brand forward.
For example, should you really be spending two hours every weekend doing laundry when you could pay someone else to take the task off your plate? Understand that paying for what you used to consider an indulgence might now be an essential in your new reality as a founder.
While every startup has unique needs and challenges, investing in security, people, and productivity is a safe bet for most founders.
What is the most important investment you’ve made in your company?
Tags: entrepreneur advice, Harley Finkelstein, jason cohen, leadership, legal advice, startup advice, work environment