The Top 3 Things Startup Founders Screw Up When It Comes to Planning for People

So, you’re launching a company. You’ve got a brilliant idea, a killer product, and enough caffeine to power a small city. But before you start patting yourself on the back for being the next big thing, let’s talk about something that’s near and dear to my heart (he said sarcastically): your complete and utter ineptitude when it comes to personnel planning. Yeah, I’m not afraid to say it. I’ve been in the game of helping startup founders for over 21 years, and I’ve seen it all—the good, the bad, and the meme-worthy. This is an area where nearly everyone I’ve worked with initially shits the bed. And if poor personnel planning sticks with you past the pre-fundraising planning stage, your business will shit the bed, and it will shit it loud, early, and often. So, bear with me and my empathetic, tough love as we dive into the top three things you’re probably screwing up in the early stage of planning your business.

I might just save your sheets.

#1 Thinking You’re a One-Person Carnival

I get it; you’re a superhero. You can code like a madman, market like Don Draper, and subsist on a diet of ramen noodles and dreams. But here’s the thing: no matter how talented you are, you can’t do it all alone. And yet, 80-90% of the thousands of entrepreneurs I’ve worked with seem to think they can handle everything from product development to customer support without breaking a sweat.

News flash: you’re not a machine. You need sleep, food, and occasional human interaction. Plus, there’s this little thing called “scaling.”

If you’re a one-man show and your business grows (more than likely not, because you don’t have the people), you’ll quickly find yourself stretched thinner than Trump’s combover. You’ll be so busy putting out fires and trying to keep up with the day-to-day grind that you won’t have time to focus on the big picture. And let’s not forget about the skeleton crew you actually do hire—they’ll be so overworked and under-managed that they’ll be posting their resume on Indeed faster than you can say “W2.”

So, how do you avoid this pitfall? It’s simple: build a real (yes, “real” is the operative term) operations plan so that you can figure out all your personnel needs. Break down all the activities through dependency analysis and other dissections of your business and figure out which roles are essential. Create a comprehensive organizational chart and hiring plan, and make sure you have the right people in place to handle the workload and support your company’s growth. It doesn’t cost you anything, other than some time, to do this right, but the benefits are profound.

I cover how to do this in detail in my book, Kill Your Business Plan, and there’s a great free worksheet as an addendum on Businessplan.com.

Download the Worksheet

#2 Offering Peanuts and Expecting Unicorns

Everyone knows unicorns are allergic to peanuts. 

I know you’re trying to be frugal and save every penny you can, but skimping on salaries is like bringing a butter knife to a gunfight—your ass will be toast. (Buttered toast is still toast.) 

Another mistake entrepreneurs make is not budgeting for competitive wages to attract top talent. You might think you’re being smart by researching national and local salary averages for the roles you’re looking to fill. But here’s the thing: national averages don’t mean squat when you’re hiring in a city where the cost of living is higher than Snoop Dogg and Martha Stewart baking edibles on 4/20. And you can’t expect to attract top-notch developers, for example, in San Francisco or New York City by offering them a salary that barely covers their avocado toast and a shared studio apartment in Toledo, Ohio.

And even if you’re looking at local averages, aiming for the middle of the pay scale is just bad news bears. As a new business, you need to hire the best people possible to execute your go-to-market strategy and gain a competitive advantage. Settling for average or below-average employees is a recipe for disaster.

Look at the value propositions or the mission you’re outlining. I guarantee it doesn’t say, “Our mission is to sell a mediocre sandwich” or “We will give our customers an okay project management platform that does things less well than the market leader.” You’re trying to build a rocketship, so get the best rocket scientists on board and pay them what they deserve.

#3 Hire for Skillsets Instead of a Jack-of-All-Trades

Ever hear that cliche saying your grandpa used to kick around at you, “Jack of all trades, master of none?” Yeah, he wasn’t being complimentary.

So, let’s say you heeded the first two points and you’re planning for a team of rockstars who are ready to take your startup to the moon. But wait, what’s that? Your brilliant software engineer can’t handle UX/UI design, data quality assurance, customer support, and daily social media posts. Your marketing guru has no idea how to manage a project, onboard customers, and oversee operations. Uh-oh, looks like you’ve fallen into the trap of not adequately planning for all the necessary roles within your organization.

Sorry, mom… not-so-little, mid-thirties Timmy is going to need the basement this summer.

It’s a tale as old as time. Entrepreneurs get so caught up in finding the perfect expert for each position that they forget there are other related things the employee just isn’t good at. It’s a lame and overly used analogy, but it’s like a puzzle that has a missing piece or two.

Total aside: last Christmas, my mom and I “finished” a 4,999-piece puzzle. You might be saying, “But Brent, they don’t make 4,999-piece puzzles.” I know, dear reader. I know. And that marathon puzzling session haunts my dreams to this day. I will never know the splendor of completing The Harbour Evening.

Back on track.

Not only do some founders fail to round out their hiring with all the roles they actually need, but they also have a nasty habit of overburdening their early hires with tasks that are way outside their job description. Sure, startups require a certain level of flexibility (that’s why you pay those startup employees the big bucks and compensate them with stock options), but there’s a difference between being a team player and being taken advantage of. When you expect your VP of Marketing to also handle HR, accounting, and office maintenance, don’t be surprised when they start looking for the nearest exit.

So, what’s a founder to do? It’s simple: take the time to carefully consider all the roles necessary for your business to function smoothly. Look beyond the obvious positions and identify the key skills and experience needed to support your company’s goals.

So, What Does a Shit Bed Look Like?

Now, I know what you’re thinking. “Sure, personnel planning is important, but what’s the worst that could happen if I don’t get it right?” Oh, my sweet summer child. Let me tell you a little story about the consequences.

First of all, if you underestimate your staffing needs, fail to budget for competitive wages, and don’t plan for all necessary roles, you’re basically setting your business up for a game of financial Russian roulette, where half the chambers are loaded. (Think I’m being funny? Half of businesses fail.) When you don’t accurately account for your personnel costs, you don’t raise enough money. And then you’ll find yourself stuck in a vicious cycle of understaffing, overworked employees, and missed opportunities for growth. Fun, right?

But wait, there’s more! Poor personnel planning can also lead to increased stress and pain for you, the fearless leader. When you’re spread thinner than too little bronzer over too much Trump and don’t have the right people in place to support you, you’ll find yourself working unsustainable hours and making costly mistakes. Say goodbye to your mental and physical health, and say hello to strained relationships with family and friends. It’s a recipe for burnout, and trust me, it’s a bed best left un-shit.

And let’s not forget about the impact on your customers. When your employees are overworked or lack the necessary skills to perform their jobs effectively, the quality of your products and services will suffer. Missed deadlines, subpar work, and poor customer service will become the norm, and your company’s reputation will hit the sheets faster than bad oysters and beer.

But perhaps the most painful consequence of poor personnel planning is the constant cycle of firing and rehiring. When you finally realize you’ve made mistakes in your hiring decisions (Paul was mediocre on his best day, Sarah wasn’t really a “full-stack” developer but actually a newly minted DeVry graduate), you’ll have to let people go and start the recruitment process all over again. It’s like Groundhog Day, but instead of Bill Murray, it’s you, and instead of a charming small town, it’s a never-ending nightmare of job postings and interviews.

And finally, let’s talk about the granddaddy of all the problems: money. Inadequate personnel planning can dramatically shorten your startup’s runway. When funds are misallocated and employees are not performing at their best, your business will burn through capital faster than Justin Bieber on his birthday in Vegas. You’ll be left scrambling to secure additional funding (add another job to your list) before the well runs dry.

Clean Sheets

Alright, founders, listen up! I know I just spent the last few paragraphs scaring the living daylights out of you with tales of the consequences of poor personnel planning. But fear not, because I come bearing solutions! That’s right, it’s time to put on your big kid pants and get serious about avoiding… well, you get it.

First things first, you need to conduct a realistic assessment of all the necessary roles within your organization. This means taking a step back, putting down the energy drinks, and objectively evaluating the skills and experience needed to support your company’s goals. Create a detailed organizational chart, and make sure you have a plan to support all the elements you’ve outlined in your business model. This way, you can make informed decisions about who to hire and when, instead of just winging it and hoping for the best.

When it comes to hiring, don’t fall into the trap of trying to hire a jack of all trades. Sure, it might be tempting to hire a chef who’s also a bartender and a DJ, but let’s be real: is she really great at all those things, or will this be like the time you attended your cousin Jethro’s wedding? (Dry chicken, Pabst Blue Ribbon, and Kool & The Gang on repeat.) Instead, focus on finding employees with expertise in their domain. Then hire, or outsource, where additional coverage is needed. This approach will help prevent skill gaps and ensure that all critical tasks are covered by experts who will help you gain a competitive advantage.

Now, let’s talk about money. I know you’re probably tired of hearing about budgeting and raising capital, but trust me, it’s crucial when it comes to attracting top talent. Don’t just rely on national or local averages when researching competitive wages. Take the time to gather data on what the best people in your industry are earning. Network with other business owners, consult with recruiters, and browse job boards to get a sense of the current market rates. Then, budget accordingly and raise sufficient capital to attract skilled, experienced professionals who can help drive your company’s success. Remember, you get what you pay for, and in this case, you want the crème de la crème.

Time to wrap this up. I’ve given you the lowdown on the common pitfalls of personnel planning and the consequences of making these mistakes. I’ve also provided you with some solutions to help you avoid these pitfalls and set your business up for success.

The key takeaway here is that personnel planning is not something you can afford to overlook. By conducting a thorough assessment of your company’s needs, hiring experts, and offering competitive compensation, you can build a strong, capable team that will help you achieve your goals and make a lasting impact in your industry.