When should entrepreneurs start planning for key hires?

I attended Dave Ramsey’s EntreLeadership simulcast last April. There is another one on Sept 30 (yes, just a few hours from the time I published this blog post), and I encourage you to attend if you can.

One of the tips from last April that impacted me the most deals with the question of when entrepreneurs should start planning for key hires. Dave’s advice boiled down to this. “Start planning months before you will need the person.” Huh? That may sound bizarre if you’ve never been with a startup. But here is why that advice spoke to me in a really powerful way. I was a founder at my last company and helped grow the firm to more than 100 people around the world. Many of the company’s leadership wore more than one hat during that growth and there were many times when I thought “I sure wish I had someone to do this job for me.” The following pattern tended to repeat. I’d put off spending the money to make a hire until not having the person was unimaginably painful. Small business entrepreneurs like to be careful with cash flow, right? Sort of makes sense. But then I would rush into it. I might not have truly thought about what role I really needed to fill. And either way, I’d find myself in a pretty compressed timeframe of wanting to find someone ASAP since I had allowed the problem to become critical. That often led to the first person I hired or the first role I created being less than the perfect fit.

It turns out I wasn’t alone in making that mistake. Dave shared that this cycle is incredibly common with small businesses and that it can often take 2-3 hires to find the right mix of person/role that meets everyone’s needs. He also shared that companies tend to do a lot better on the first try when they are deliberate about planning for key hires months in advance. Is that even possible? Yes and no. No, the person you are thinking about ‘now’ may not be available 6 months from now when the pain is so great that you’re finally willing to part with your cold hard cash and extend an offer. But, the act of going through the process tends to create much more clarity about what role you are really trying to fill and what skills/background will be most important. He also stressed that hiring a person who fits your companies culture is a heck of a lot more important than hiring a person who matches the ‘skills’ you are looking for at a perfect level. But that’s an entirely different discussion that I’ll save for another post.

Perhaps going through this process is akin to needing to get burned by a stove before you learn how hot it is. On the other hand, my kids never did get burned by a stove and they seem to understand. So, here’s my hope for you. Don’t get burned on this particular stove. Don’t put off hiring key people until the pain is urgent and critical. Taking that path is likely to burn you. I have the scars to prove it.

P.S. Try to attend the September 30 simulcast if you can. Or check out Dave’s book titled “EntreLeadership”. No, I don’t get a cut. :)