Entrepreneurship is not a career.
It’s a life choice. Some may even tell you that you are either born with it or not. That’s why, if you’re an entrepreneur in your blood, you have to handle yourself financially as if we’re talking about your lifestyle and not your 9 to 5. What does this mean? That every penny you spend on your innovation must be calculated for the long term – and you know how long it can take for a dream to turn into a reality.
Having said that, there are a few things you cannot afford to save on, for the sake of your success. We talked to several entrepreneurs and investors and got their take on the matter, along with some valuable advice for anyone just starting their path in this fascinating world. Here are a few things worth spending extra bucks on.
The power of manpower
“I’ve set up a few companies in my history as an entrepreneur, so naturally I’ve had to deal with staffing quite a bit,” told us Don Wakerford, an innovator from Cincinnati, OH. “One thing I can tell you for sure is that you should definitely not compromise regarding the people you’re working with, just because of their cost. They are the base to everything, and if they don’t do their job right, it doesn’t matter how much time, effort, and energy you put into your vision. It’s not going to work.”
Finding the right manpower (or womanpower) isn’t as complex as it seems, though. True, there is no right and wrong way to search for employees. There is, however, a good and bad way to screen them in the drafting process. Make sure you interview each person you are planning to accept into your ranks a few times and in different circumstances. Also, define a budget for salary, but be generous because quality comes at a price.
Throw a pitch
Your success relies on the amount of capital you can allocate to it. Naturally, you’d rather have outside investors help you with that. That’s why you should not underestimate the importance of a good pitch. Here to explain this issue is Ofir Bar, an angel investor with two decades of track record in real estate and tech investments, currently worth about $150 million. This is what he told us:
“A pitch is the proposal you present when trying to sell your idea to potential investors. Most investors, especially large-scale ones, give your pitch a lot of weight in their decision-making process, since it says a whole lot about you as a person and an entrepreneur. Sloppy-looking pitches, for example, are a great deterrent. That’s why if charts, graphs and slideshows are not your thing, I’d recommend hiring a professional to do it for you.”
The soft touch
Another thing you should not be economical about is the software you use for development, marketing or even data storage. Remember the days before the internet was a thing, and we would store all of our vital information on an Excel spreadsheet or, even worse, in a physical notebook? Remember how hard that was? Well, that’s why you don’t want to take the risk with software. Glitches in software can cause loss of information, malfunctions or even security breaches – and fixing these mishaps can be very expensive.
“A lot of startups approach us only after they’ve had accidents regarding security or loss of data, as a result of cheap software solutions,” confessed Jack, a marketing employee in a leading project management software company, who preferred to stay anonymous. “I’m surprised at how many young entrepreneurs make that same mistake, over and over again.”
Some final thoughts
Having said all of that, we do not intend to imply here that you should pay a whole lot of money for these things. Just know that if you go for cheaper options, it comes at a cost – and that cost is usually lower quality or standard. As the entrepreneur/investor Ofir Bar summed it up, “don’t look only at the price tag of something. There’s great importance to things like credentials, past performance, capabilities and more.” Good luck!