What should your startup organizational structure look like?
If you have financing for your startup and you’re just starting, congratulations on this exciting step!
Startups typically need to grow quickly, and one of the most challenging factors is understanding when and how to delegate tasks as you scale.
You’ll need to know what your co-founders can and will do versus what you should get help with, then hire and train deliberately in specified phases. A failure to hire, onboard, train, and delegate at the right time could put you in hot water fast. And while you can’t plan out the future exactly, you should detail management responsibilities in a founders agreement.
When you and your team clearly understand where and when to delegate, you’ll have a better chance of smooth growth.
Preparing to Hire Staff in Your Startup
Your startup organizational structure will probably change drastically in the first few years of growth. Though the principal founders and a small support team may be the only people working at the start, have a solid plan in place for recruiting and hiring.
Things to consider before hiring:
- Get an employer identification number (EIN) from the IRS
- Register with your State Labor Office
- Have your accountant set up a payroll system to withhold taxes
- Understand worker’s compensation coverage
- Review some essential websites: Title VII of the Civil Rights Act, the Fair Labor Standards Act, The US Department of
- Labor website, The Equal Opportunity Employment Commission website
- Check with a business lawyer to make sure employment laws and regulations are covered
No matter who you hire, take time to explain the “why” behind the business, delineate specific onboarding plans, and train well. If you don’t develop effective training procedures from the start, high turnover could be a serious liability later on.
Task Delegation Tips
During your initial startup organizational structure, your staff will likely consist of the founders, plus a couple of specialists like an accountant and lawyer. It will be natural for the founders to handle most of the tasks, and they should make a point of sticking with tasks that are most central to the business from the getgo—specifically those things that have to do with customers, sales, and central management.
However, this won’t last forever! No matter how much energy you feel you have at the start, your core team will burn out if the business experiences fast growth. This is part of why, because startups are so fragile, a lack of proper delegation at the right times could prove disastrous.
At some point, the “I’ll just do it myself” train of thought will be a disadvantage and could even be one of the worst things you can do as your business grows.
Your goal should be that the business can run itself (thanks to your talented staff and managers) without you and that you can trust them to keep it running well.
To that end, you may hire in several phases, with the second or third wave being the last step where the founders hire trusted managers who can run the business independently.
What not to delegate
In the earliest stages of your startup, the startup organizational structure will support the founders being the central staff. Founders should do most of the work at this point to understand exactly what’s needed on the ground.
This doesn’t mean they should do “everything;” instead, they should be participating in the materialization of something that was recently more of a vision than a reality. They should consult with qualified individuals, for instance, to get legal advice, HR support, and help with some administrative duties.
But generally, they will remain central to key roles, including:
- Customers/sales
- Marketing strategy
- Product marketing
- Hiring
- Fundraising
- Financing
What to delegate
Your first round of formal hiring should focus on people who can take care of more menial tasks that have little to do with core revenue generation. Examples of these positions include customer service staff, social media support, and lower-level administrative work. While these team members are certainly important, they tend to be the least risky.
When you decide to hire a second and third set of staff members will depend on the business.
But it might be worthwhile to, for instance, have a single dedicated HR person to work with to develop hiring and training plans first. Plenty of people work as part-time consultants these days, so you don’t need to heavily invest in an entire HR department. The same goes for accounting and administrative support.
What you’ll be doing upfront is assessing the founding team for skill gaps and then developing plans to fill those gaps quickly. Most likely, this will be in areas like admin, tech, and creative.
Just starting to network for excellent team members can put you ahead of the game for when you’re ready to formally hire. This is where websites like (AngelList and LinkedIn can come in handy).
Conversations with other experts, from writers to marketing pros, will help you understand where the gaps are, even if you don’t hire right off the bat.
Core revenue-generating activities such as sales and solidifying high-stakes partnerships should stay in the founders’ hands for as long as possible. Take the time to find managers you trust and spend time working intensely with as you train. They must be self-driven and have a similar approach to business as yourself. You’ll treat them like co-founders, and you’ll be able to get out of their way.
Get Business Help with Your Startup
A startup needs to grow fast, and failure to delegate as you scale well can kill growth fast.
Determining your startup organizational structure can be challenging, especially when it comes to sourcing and hiring talent.
When there is a clear plan, proper project management, and clear delegation, your chances of success are much higher.
To get started on your business plan or get help with other legal issues, call 303-780-7333 or schedule an appointment for a free consultation.
