ESYB2 048 - Your Founding or Management Team
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[00:00:00] Now let's discuss the team part of your business plan, and oftentimes if it's a small business, the management team is just you. And that's not terrible. Usually investors would look for a multi person team. For example, what if a single founder got run over by a bus and they invested in it? There's no more business, but often it is just you.

So don't worry about it too much. But when you're writing the section of your business plan that has to do with your team, you just want to list. The executives on your team that have relevant experience and add any mentors, advisors, board members that you might have. If you don't have it, don't worry, just don't write it.

And you want to note the ownership or equity of each member, especially if you're presenting this business plan to a potential investor, they need to know that information. And for a small business, single founder is okay for technical startups. A good founding team is two to four founders because you need somebody to create the technology.

Like the programming, you need one person to do the marketing. A balanced [00:01:00] team is good. So you don't want to have like four programmers on a tech startup because everybody knows tech, nobody knows business. So you want to have like one or two people do business. One or two people do technology. Usually it's more tech heavy.

So if you have three founders, two would be in tech. One would be in business. So the theory of this is relatively simple. And then writing this is relative, relatively simple as well. And for your business plan. The hard part is actually finding that good team because you want to populate your team with A players and which you really don't want to do.

The biggest and worst mistake that people make is they partner with people that they don't know. Everybody will tell you, Oh, I'm good at this. I'm great at this. Very few people are honest enough with themselves and you to say, I'm not so good at this. That is rare. And you really don't know their problems until you start working together.

And at times it's late because a bad co founder can really damage your [00:02:00] business because you have to figure out how to split the equity and it's a tremendous distraction. Sometimes it might cost money, a lot of potential problems that you want to avoid. It's hot. What you want to do is get into business relationships slowly, be patient, test people.

So maybe if you meet somebody at a networking event and they sound like they're a good fit, well don't just invite them right away, maybe hire them on a contractor basis, maybe give them a little job, maybe start a relationship where you can incrementally increase. And if you see that like three months from now or two months from then, Things are going fantastic.

Then you want to have that conversation about, Oh, maybe let's partner or the way you structure your initial relationship would be like, let's have a three months test period. And then we'll discuss potential partnership. If it works out, then here's how potential partnerships and equity will look like.

That's reasonable, but you do not want to sign any paperwork saying. On day one, we're splitting 50 50, because if they quit the next day, they own 50 percent of your business and they just left. [00:03:00] It's silly, but that actually happens at times. So, slowly is the key. And ideal partners are people with whom you've worked with successfully before.

Maybe at a previous company, at a previous job, the first place you want to start looking is, who do you already know with whom you have good working chemistry? That's good. And something to avoid are pity invites. Like, you talk to a friend, and they're like, oh, you have such a great idea, let's do this, and you say, oh yeah, let's do this, you're excited, and then the next day they're, you know, they're like, they get back to their life, and they kind of forgot about your business.

Or maybe they spend like one or two hours a week on your business, which is nothing. So, you kind of had that conversation, it was positive, so you keep people on, but really, it's actually distracting and damaging, and they don't get your results, they just waste your time. And also, you want to avoid professionals who are like half fit, because you don't want to stuff your team with just bad players, because it's just going to take you a long time to [00:04:00] manage them, communicate with everybody, waste your time, disfocus you, and ultimately you're going to have to change them anyway.

And of course, also be careful of working with friends and family. Sometimes it's easy to get into working relationships with them, but you don't want to damage your relationships because personal relationships are more valuable than your business or money. And. Often people like to keep their professional and personal life separate.

There are plenty of businesses that have been founded by friends or family members, but there's always this risk. It might damage the relationship. So you want to consider that. And I want to give you one resource for finding partners. Then again, be careful. Not too fast, but cofounderslab. com, formerly founderdating.

com has a section where you can find partners or people to network with. So now that we covered the theory of this, let's take a brief look of how I wrote the section of business partners in my business plan. This is a short and relatively [00:05:00] straightforward section. It's a single founder business in my case, so really just me.

When I founded this, I had five plus years of software engineering. Now I have over 10 years of marketing experience and over five years of product creation. So I have experience in mobile apps and business, which is the topic of my apps and I'm an engineer. So that gives me a lot of skills that multiple team members might have in other kinds of businesses.

So this is good to outline in a. Business plan. If you're showing to investors, because this is the kind of background you want in a founder, you also might want to add some success of this member. For example, if you know, like I have reached millions of people online with my marketing, so that should be good to mention because that's an added strength of that founder.

Also here, I have little room for other officer positions. Maybe you have a CMO, CFO, Chief Operating, whatever. Some kind of a directors or [00:06:00] other co founders, you want to list them. In my case, I don't have them, so I'm just going to delete this. But if you have them in your case, you want to have them here.

And you want to also mention the previous funding and ownership. Obviously, for this business, it's self owned, so it's me. But if you have multiple partners, you want to break down their ownership. And that's really it for this section.

