A lot has been said and written about bootstrapping and all the various other ways of starting a business when you barely have enough money to do so. Ingenious business founders have over the years found various ways of working around their resource limitations. With little to no money in their coffers, they have been able to do things like finding ways of marketing themselves and their companies; finding ways of developing and getting their products to market and achieved other feats which are impressive for resource-starved companies.
There is another critical resource that many a budding entrepreneur still has a far more difficult time acquiring when they have neither the initial funding nor the revenue streams to pay for it: labour. No matter how high your hopes for your new business are, it can be very difficult to convince someone else to buy into it enough for them to join it when it is not yet making any money. This does not mean that doing this is completely impossible. Presented here are some tips and suggestions for how owners of businesses that are not yet making any money can still manage to convince other people to join them in their venture.
Tout the founder’s resume
Many early-stage startup investors often declare that they don’t invest in the companies themselves but rather the people who are behind them. The people whom you try to lure into your penniless startup will take a similar approach when deciding whether or not to bet their precious time and livelihoods on your new company—this is to say that they will take as close a look at the founder(s) as they will the company itself. Therefore if you are lucky enough to already have an illustrious career behind you, don’t hesitate to use this to your advantage. You are selling yourself as much as you are the company. In fact, when a company is just starting, the founders’ profile can be more important than that of the company itself.
I know that there are many entrepreneurs out there who would scoff at the idea of themselves ever needing to use a resume—they are job creators, not seekers after all—but one of the easiest ways of winning people over and getting them to take you seriously is impressing them with your qualifications, range of skills and breadth of experience.
Bring in more than an idea
No matter how good a business idea, people still need to be convinced of the prospective business owner’s ability to execute it. Whether you are looking for team members who will be your business partners or just employees, always avoid the mistake of just bringing a mere idea to the table and then expect other (unpaid) people to work to make it a reality. This is mainly because if you are not paying people and you bring nothing else of value to the table beside the idea, sooner or later they will figure out that they can keep the idea, get rid of you and do it all on their own. The obvious exception here is if you make yourself indispensable by also bringing in the capital in addition to the idea.
Settle for part-time commitments
One way of getting people with the necessary skills to get onboard your new startup when you can’t afford to pay them is requesting only limited time commitments from them. Allow those who are already employed elsewhere to only devote a fraction of their time that they can spare to your business (until such a time as when you can actually pay them for more of their time). By acknowledging and allowing people to keep their day jobs (a.k.a their safety nets) it becomes easier for you to convince them to work part-time for you with the possibility of full-time employment (with or without other additional benefits) when the company finally takes off. Remember that people who look for jobs, unlike those who start businesses, expect a certain degree of security and not the uncertainty that comes with entrepreneurship, so demanding that they commit full-time to your business is unlikely to get a lot of takers.
Get traction first
Another effective way of convincing people to join you is demonstrating that your business is actually going somewhere. This proof can take the form of the figures such as those of the investment you have received, users acquired, pre-orders and revenue. These numbers are usually one of the simplest ways of proving that there are people who actually believe in and are interested in your business and/or its products. Tout these figures to anyone whom you want to join your team.
Catch them young
Older people with families are generally much less inclined to make any decisions that might jeopardize their financial security. It, therefore, follows that these people would also be the most reluctant to take the risk of joining a company which is not yet making any money. This conversely means that younger people, who usually have significantly less financial responsibilities, should be your primary targets when you are hunting for people to join your new company.
Give people more power and responsibility
One way of counteracting the potential frustration and lower levels of motivation that may come with people working for extended periods of time with little to no pay is giving these people more power and responsibility in the company. This way you give them more control over the business’ operations—possibly including how soon they can get proper salaries. It is much easier for people who feel like they have some control over a situation to hold on to hope than those who basically feel like mere minions.
There are several reasons why someone would intentionally join a company that isn’t paying them well or enough (or not even paying them at all). However, no matter what their reasons, it is important that you make your team feel like the wait for profitability is worth it. One of the most commonly used approaches to achieve this is to offer equity or part of the company to employees who join when the business is not yet making any money. Some may take advantage of the low number of job opportunities available to offer the employees who join before profitability permanent employment when the company becomes established.