A few days ago the Founder of CB Insights, Anand Sawal, released his video from SaaStr on the 68 mistakes he made while building his SaaS company. We highly recommend this video for all SaaS founders because it is filled with great information, and we also like Anand because he is funny and not full of it. But we digress, mistake #18 was that he did not bring in the experts soon enough. He spent three years manually working his own payroll – THREE YEARS. That stat makes us hurt inside for him because we have run into a number of these founders and what they end up gaining in being scrappy is actually a net loss in precious time they could have spent building their business.
This got us thinking about some common questions we come across from founders and how we respond regarding why hiring experts early is vital to their overall success.
Can’t we do our own Accounting?
Yes, of course you can. But because you aren’t an expert there’s a good chance that it will take you longer to do at the expense of a better use of your time (like building your business), you might not get it right, or you might not optimally align your books in a way that could truly set you up for success. When you start down the road of fielding your own QBO or Xero account, ask yourself what your time is worth and if it could be better spent elsewhere.
Can’t we just hire Bookkeepers?
Yes, you can, but remember that bookkeepers and accountants are different. Bookkeepers can log transactions, process receipts, etc, but if you are looking to be in any way strategic with your business; you are going to need an accountant. For example, when it comes time to raise a round of funding; a bookkeeper is not going to be able to give you a gap analysis (at least not one that is viable for an actual VC). A gap analysis compares your actual performance with your desired performance and that’s what investors are really going to want to know about. You can wait to engage an accountant, but remember that they are going to have to spend time going through your books to get you up to speed.
But what about HR? We can do that for a while on our own, right?
Again, of course you can. The problem becomes when you miss things like understanding the difference between exempt and non-exempt employees. We’ve seen people get an audit from the Department of Labor at even the very young stage of 30 employees. That can result in fines of over $200,000 – not worth it in the scheme of things. Make sure you get someone on your team, either full-time or through an outsourced back office function like HireAthena to keep you on the straight and narrow.
In this business, it’s all about knowing what you don’t know, and bringing in those who do know exactly what you need to do to be successful. A big thanks to Anand Sawal for saying it loud and proud at SaaStr – Hire an expert!
Photo Credit: CBInsights presentation @Saastr