There are quite a few steps to take when building 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’re not familiar with the basic steps of building a business, I encourage you to check out the multitude of posts you can find on the web, and then go back and reread this article.

In most cases, it is essential to build your business in steps, taking great care in how you spend the precious funds at your disposal, regardless of the source of your capital. By now, you should have a list of components that need to be implemented, such as IT infrastructure, including but not limited to email accounts, a website, internal software systems (both “canned” packages and custom software), and further. On the creative side, you’ll need to decide on your branding (logo and color theme). Then chances are you need business cards, brochures, letterheads, flyers, signage and the like.

You can build a business in steps (or increments), but you have to find the right talent. In the beginning, it will be much better to find people who are proficient in several different areas. The fewer resources you have to employ, in most cases, the lower your outlay will be. If one person can perform the functions 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, since each task is likely to become a full-time job. Overstaffing too soon can put you out of business quickly or put undue pressure on your business to run sooner than it is capable of.

Let’s turn the clock forward and assume that your business is gaining traction. Let’s say your multi-talented people helped you get your business off the ground, and now you’ll replace them with employees dedicated to specific business segments or departments. It will be easy to replace them because they will be waiting for you. Because? Because you brought them in as contractors. You have a lot of flexibility with contractors. If it is in your interest and the interest of the contractor, you can propose a contract agreement to hire. Then if things work out well you could bring them on board as part of your senior staff as they will have a good understanding of your business. Or 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 hoped, you can cut back on the contractor’s hours to stay within your budget. You can leave them loose if they are not working as expected. You will also save money because you will not provide them with benefits and, in many cases, will not provide them with a work space.

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