The Challenges for Founders
By Peter Weiss, Partner and Co-Head of the Corporate and Commercial Team at SMB
If you are like many of the founders I’ve met, you probably have vision, are innovative, energetic, and a creative risk taker who sees opportunities and believes you can realise value from them. Over the years, I have helped numerous start-up businesses grow and have seen similar challenges across varying sectors. Outlined below are some of the main challenges that come up again and again for their founders.
Many founders are highly motivated people who have expertise and insight in one skill but feel that in order to save time and costs they need to be able to do everything to make their businesses succeed. This can be a good and a bad quality. It can help founders to work through challenging times, but it can create and compound unneeded problems for their businesses.
The challenge many founders face is how to work out which things they can do best themselves and where they need to ask for help from others.
When faced with a problem and trying how to solve it, a founder may have a number of interests that are driving their decisions, including:
• The necessity of the task;
• its importance; and,
• how quickly it must be done.
A founder keen to drive their business forward must often weigh up how to get the job done themselves versus what can they can afford to get someone else to do it for them. They often are in crisis mode and want it done quickly because they feel some commercial opportunity will be lost if they don’t sign immediately.
At this point, they often pick up the phone to phone a friend, call a professional or ask a favour of someone who has done their task before – all of which are good options.
The challenge is how and what to ask for, and be realistic about how much time it will takes, and to work out who is the right person to direct questions to. It is at this point that a founder often calls someone like me.
A typical call from a founder to a lawyer who they want to help them might go something like this:
“Hi, I need help, how fast can you produce standard terms for this contract I need to get signed right away. You don’t need to do much because I have copied some stuff from other sites and from something a friend of mine has lent me, and I just need you to look them over and that’s all I want and how much is it going to cost?”
And this is an example of where the problems sometimes start. The trick for the lawyer is not to answer the questions asked of them and the guidance for the founder of a start-up is that there are other better questions they should be asking.
Imagine the following scenario.
A person desperate to park their car, has bought a piece of land. They call the builder and they say, “Please can you build me a garage straight away, I need it immediately, and can you do it as cheap as possible. Thanks.”
The builder then builds the garage. A month later the person calls back and says, “Can you please build my house now – I need it straight away.” The builder says “There is a garage in the middle of the plot by the entrance because I built there to save costs, and we have to tear it down and start again, and now there is going to be twice as much work to get it done and while it is, you won’t be able to use the garage either.”
The problem is that the person requesting the work was so focused on the task at hand that they didn’t brief the builder on the bigger picture of their objectives, and equally the builder hearing the distress and haste of the client, followed exactly what they wanted but not what they ultimately needed.
How to Get the Best Results
The key advice to founders and start-ups is that if you want to get better results from your advisers and those that support you, even if you are rushing, the most important thing is to step back and work out what you want and to focus on the outcome you need, rather than speed and cost.
To help, some tips include:
• When asking advisers questions, make sure to inform them of your priorities and the overall outcome you want to achieve, and let them help you work out what you need;
• It is often best not to try using other people’s precedents, as often they are not suited to any business and would have no legal effect, and the costs of reviewing them can ultimately be more expensive than preparing something new; and,
• Send prospective advisers a brief before calling them to provide background, allow proper time for your call with them, and ask them how they would suggest meeting your objectives in the most cost-effective way.
A good adviser will be your advocate and will help to look after you, help you keep it simple, get things done quickly, and encourage you not to spend valuable start-up funds unless they are essential.
Message for Success
Founders should try to solve as many problems as they can but should also know their limitations and when they need to ask for help. When they do ask, they should focus both on the immediate questions they have, while also setting out their overall concerns and objectives. If founders make the right preparations, the tasks they need done should ultimately be achieved quicker, cost less and provide the right foundations to build stronger businesses going forward.
If you are a start-up and would like to speak to Peter please email him here.