Junto: Learning & Entrepreneurship

Monday, September 19, 2005

Growth or Cash?

Over the past week, one of the questions that I have been pondering is: is it better to spend the money on additional personnel or keep the cash?

In business, it is well-known that cash is king; however, in order to be successful, you obviously need to take a leap of faith sometime. The conclusion that I have come to (and I'm not saying that it's the right one) is that controlled growth is probably the best bet.

In the beginning, you probably don't need a full management team to prove the concept/idea -- that can be done by yourself or with a small team. Once the concept is proven, recruitting additional personnel/management to grow from a seed stage to a start-up stage would be appropriate. The hypothesis that I am making is that if you prove the concept and show that with your team there is growth potential, I believe that cash (either from sales, internal or external financing) will follow.

If any of you been in this same situation and can offer advice, I'd love to hear it.

2 Comments:

  • I totally agree. However, from what little experience I have had, I have learned the power of a good team. Very few companies have ever done much with just one person at the helm. Joining Junto, and working closely with the team I have now, has helped my companies in ways that I never could have done on my own. Burning through a little cash to recruit the right team is well worth it, because that team will being in the cash - which is still KING. I like what you said about proving the concept yourself. I think that is true, and so there is timing to building the right team. Amen brother

    By Anonymous Chad, at 11:16 PM  

  • For a long time, I believed cash was king. Then, I learned that Clarity is King--and it will bring (and reveal) more cash than most other things can hope for.

    When more people can instantly understand you VISION (and how they fit into it) and when they make it their own, then you will find incredible momentum and success!

    But, that's not why I commented here. I am a recruiter and the agency I work with provides business owners with some crucial keys to success (in my opinion) when it comes to trying and buying the right people to get on your bus.

    In August, I blogged about the idea that "you don't have to hire everyone". You can find it at www.utahtechjobs.com, or google this exact phrase: "you don't have to hire everyone" (quotes included) and you should find it.

    Several companies have taken that advice since I posted. Most of them have excellent full-time employees now that they "payrolled" for a time to "try them out".

    Others of them discovered bad-seeds before they took root in their organization. We've let them go (at no liability to my client's business), and replaced them, and they are still thanking me for helping them avoid some ugly and costly staffing mistakes!

    Good luck with your baby and everything! You're in my blogroll now (thanks to Paul Allen's link).

    Take care.
    Robert Merrill

    By Blogger point-n-click, at 3:43 PM  

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