Most startup founders end up doing everything themselves to save money in their first few years. However, once the business gains traction, it’s important to look at how you can bring in new skills and scale your startup team.
Scaling means that you’re able to increase your output exponentially while keeping costs low. It’s different to gradual growth, which is the aim of more mature businesses and focuses on a predictable process of investing into the business to see bigger returns.
To scale quickly, you will need to bring in the right expertise. While every founder has plenty of passion, you won’t be qualified to do every job needed to get your startup where it needs to be.
Investors will also want to know that you have the right team behind you so that they can be sure they’re investing in a business that has legs.
In this article, we’ll take you through the key stages of scaling your startup team successfully.
The role of your team in scaling up
Recruiting a full-time team is one of the biggest investments your business will make, so doing this while scaling your startup can be extremely daunting.
One way to build an experienced team while remaining agile is to bring in specialised talent on a short-term or freelance basis as you grow. A LinkedIn survey found that approximately 70% of small business owners have hired a freelancer to save time and money.
Freelancers offer professional skills that are sought after by new business owners, such as graphic design, social media and brand development.
But how can you find out what skills you need?
Before you hire freelance talent, it’s important to understand the role they will play in your growth journey. You can begin this process by carrying out a skills audit of your team. To complete the audit, simply ask yourself:
- What skills do I bring to the business?
- What skills does my community bring e.g. my co-founders, board members, and mentors?
- What skills do we need to achieve success?
- Where are the gaps?
The skills you need will become clear when you set out your goals in your business plan. You can complete your audit at each stage of your growth journey to see how the skills you need and the skills you want have changed, and to continually assess if you have the right team in place.
We recently spoke with ChuLo Drinks’ Steph Buttery and Oatsu’s Lauren O’Donnell to find out how they’ve scaled their teams and made their startups super productive.
Lauren shared how she hired graphic designers from Fiverr to support brand development. She also tapped into talent from government-backed schemes, funded internship schemes, and pro-bono work from agencies who were looking to support startups in specific industries.
Meanwhile, Steph highlighted the importance of hiring talent to fill the skills gaps in your startup.
“My biggest piece of advice is don’t pay for something that you can do better yourself. The best person to sell your product is you. You’ve got the story and you’ve got the passion. Things you’re not good at – outsource.
“Find out what you’re not very good at and find someone that is better at it than you and do it that way. You might not like sales, for example, but if you’re good at it then do it,” she said.
How culture will impact recruitment
When it comes to recruiting, you will also need to consider your company culture. Culture is more nuanced than direct skills, but it will still have an impact on the team you recruit.
For example, if you’re developing new technology, you might be lacking the right skills in your team and will need to bring a software developer on board.
Yet you might also want your business to become known as the most innovative business in your sector, and so you will want your company culture to reflect this.
In this instance, the culture you want to develop will impact the person you recruit, and how you recruit them. Your competitors might be going the traditional route and losing time and money in the process.
To stay ahead, you might decide to outsource this work to a team of freelance software developers who have the experience you need, but are more agile and allow you to keep costs low.
The key stages of scaling your startup team
Our useful guide on setting up your business supplies a framework to help you consider the skills you might need when starting out.
But what about when you begin to scale? Recruiting and managing the right team effectively is essential during these key stages of business development.
1. Creating business goals
To scale your startup, you will need to test and learn quickly, and be ready to change direction when needed. To understand what skills you need to achieve success, you will therefore need to create both long and short-term goals for your business.
Long-term goals will allow you to stay focused on the overall aim of your business. Short-term goals will give you an understanding of the activities you need to achieve by each milestone in order to get there.
Once you’ve developed your business goals, you can complete your skills audit, as mentioned above. Members of the team that are focused on long-term goals, such as a chief financial officer (CFO) could be part or full-time members of staff.
Meanwhile those that are focused on short-term goals, such as developing a website or brand for your business, could be short-term hires or outsourced to freelancers.
2. Building your community
The success of your business will in part be down to the community and people you surround yourself with from the beginning. Ways you can build your community include:
Entering competitions such as The Pitch gives you the opportunity to build these relationships and access flexible, low-cost talent. You must then decide how to develop these opportunities to fit into the needs of your business.
3. Raising funding
Investment rounds are often based around milestones. For instance, you can raise funding to create your MVP and get your product or service to the point where you can test and validate it.
The results of reaching that milestone will allow you to show proof of concept and move on to your next funding round. Key hires at this stage will be critical, so make sure you understand exactly who you need to get you to the next stage – and the most effective way to get access to that talent.
4. Developing and re-developing your processes
When you start out, you’ll work in a way that won’t necessarily scale. From patching together different platforms to manually tracking cash flow, these things are time consuming but an important part of figuring out how to develop your operations.
Ryan Panchoo, founder of vegan and gluten-free doughnut business BOROUGH 22, had to pivot his business processes quickly when Selfridges put in their first order for 216 doughnuts – the most he had ever made – and then quickly sold out.
“I delivered on Friday, they sold out on Saturday, and I was making doughnuts in my kitchen on bank holiday Sunday to meet demand for Monday. It got to a point where I had to step back from Selfridges for a bit to get my house in order. At this point, I applied my project management skills. I tested freezing the doughnuts and looked at my preparation process.
“I was trying to do everything in one day, including making the doughnuts and all the admin too. It was too much, so I spread it out. I also looked at my pricing, I was way too cheap initially. I then went back to them [Selfridges] and they took me back with open arms.”
5. Learning to let go
In order to scale, you will need to delegate tasks or you will not meet demand. Recruiting a strong team will also help you meet other targets – such as funding.
Your team is one of the main areas an investor will focus on when deciding whether they want to invest. Has your team got the right experience? Have they succeeded in building successful businesses before? Do they open doors for you and your business in places that you wouldn’t be able to on your own?
6. Investing in your growth
Between 0-5 employees, the culture of your business is easier to manage because you will all likely work together closely. Once you expand to 5-12 it can get more tricky. Your role as a founder or CEO evolves – it’s not just a group of friends anymore and you have to become more professional.
The jump from 12-20 is huge. At this point, you want your culture to be truly embedded in your processes; you won’t build an awesome company simply by stumbling forward.
New team members will also need support. It’s hard to directly manage more than five people, especially when your role as a founder pulls you into other activities.
So, to make the leap from 12-20 employees, it’s likely you’ll need to bring in management hires. At this point, you will need to ensure that your management team not only has the skills you need, but that they are also aligned with your mission, culture and goals.
7. Hiring and firing – when to invest in HR
At some point on your journey from 0-20 employees, you may have to take the difficult step of firing someone.
This can be an uncomfortable experience for business owners who have never done this before and it is tempting to hire a HR manager to take on this responsibility.
It’s unusual for a company under 40 employees to have a HR manager. However, you can get support on implementing processes and your legal obligations from consultancies.
It’s likely you’ll have to revisit your contracts and processes when you start hiring in earnest – so the earlier you can get this right the better. If HR is not one of your own personal strengths, then outsourcing this will help you scale quickly.
Where to find the right team for you
Whether it’s finding a mentor, recruiting freelancers or hiring a full team, where can you find your people?
It’s common for founders to hire people they know. That’s great because there’s a lot of trust. However, it can risk creating a homogenous team that looks and thinks alike. At some point you’re going to have to recruit normally too.
Talk to other founders about their recruitment process and research online. What steps have they taken to find the best candidates – and make sure they’re a good fit.
Recruiting your first full-time hire is a daunting process. Bringing people in on a contractual basis initially can be a good way to test if they are a good fit, for both you and the contractor.
Giving individuals targets will also help to justify the spend on their role and allow you to track which employees are helping to cover the cost of their seat.
With businesses such as Google relying heavily on freelance talent, it’s clear that no matter what size you are, freelancers are a great investment. They save you your most valuable assets – time and money – while offering a huge wealth of experience and knowledge in a specific area.