There are quite a few steps to take to build a business from scratch. This article assumes that you have already gained a basic understanding of these steps and are at a point where you have some funds and are ready to put the building blocks of your business in place. If you are not familiar with the basic steps of building a business, I encourage you to check out the multitude of publications that you can find on the web and then come back and review this article.

In most cases, building your business in steps is paramount, taking great care in how you spend the valuable funds that are available to you, regardless of the source of your capital. By now you should have a list of components that need to be implemented, such as the IT infrastructure, including but not limited to email accounts, a website, internal software systems (both “canned” packages and custom software), and more. On the creative side, you will need to decide on your branding (logo and color theme). So you most likely need business cards, brochures, letterheads, flyers, signs, and the like.

You can build a business in steps (or increments), but you need to find the right talent. In the beginning, it will be much better to find people who are competent in several different areas. The fewer resources you have to use, in most cases, the lower your expense. If one person can perform the tasks of six or eight people, your budget savings should be significant. Later, when things are taking off, you can replace these multi-talented people with dedicated resources, as each task will likely turn into a full-time job. Overstaffing too soon can quickly put you out of work or put undue pressure on your business to run sooner than it is capable of.

Let’s fast-forward the clock and assume your business is gaining ground. Let’s say your multi-talented people helped you get your business off the ground, and now you’re replacing them with employees dedicated to specific business segments or departments. It will be painless to replace them because they will be waiting for you. Why? Because you brought them in as contractors. You have a lot of flexibility with contractors. If it is in your interest and in the interest of the contractor, you can propose a contract for a contracting agreement. Then if things work out well you can bring them on as part of your senior staff as they will understand your business very well. However, they could just move on. There are many advantages to using contractors in a case like this. If things aren’t moving as fast as you expected, you can cut down on the contractor’s hours to stay within your budget. You can drop them if they don’t work as expected. You will also save money because it will not bring them benefits, and in many cases it will not provide them with a workspace.

Another smart move may be to insure certain essential services on an outsourced basis. These days, you can even outsource your human resources department. External services are becoming more and more popular these days. Such services eliminate the worry of keeping up with ever-changing legal requirements, minimizing exposure to your fragile new business. The cost is typically much less than hiring internal staff for comparable services. A good service company will come with a guarantee (they will have an insurance policy) that protects your company in the event that the service company does not comply with current legal requirements, inadvertently creating a liability for your company. It is not practical for internal staff to make such a guarantee. In that case, your company assumes the risks for its hired employees.