Working with a start-up firm can be exciting. The prospect of helping the next industry leader to launch offers broad and far reaching rewards. Your self-satisfaction and financial gains could exceed even your loftiest expectations. Working with a start-up firm also carries a unique set of risks.
Start Up Firm Picture by Shinealight at Wikimedia Commons
Working with a Start-Up Firm Has Its Benefits
Dun & Bradstreet’s All Business reports in their “Advantages of Working for a Start-Up” article that 60% of Americans say they would like to work for a start-up company. Key reasons that people become eager to work for a start-up are:
- Ability to exercise own creative muscle (start-ups tend to be receptive to new ideas rather than spend their energy striving to protect old, established processes and procedures)
- Strengthening of skills and talents (the likelihood of being given new assignments can increase after you land a role at a start-up)
- Sense of accomplishment
- Room for growth and promotion
Rewards aside, your career and means of bringing income into your home deserve a closer examination. To start, Penny Moorey, CEO of RemarkAbleHR reports in Monster’s “Pros and Cons of Working for Start-Ups” article that, “Working for a start-up company takes a certain intestinal fortitude. You could end up being employee No. 2 of the next hot tech company, or you could end up job-hunting again in a few months.”
Do Your Homework
For this reason before you consider joining a start-up firm (even as a freelancer or contractor) do a bit of research. Find out if the founders at the start-up have previously owned other companies. If so, discover how well the founders managed those companies. Read through copies of annual reports and financial statements if they are available.
Typically these reports can be found at company websites or at the Securities Exchange Commission website. Look under “Filings and Forms” then “Search for Company Filings.” The SEC keeps reports on publicly owned companies although privately owned companies can also file annual reports with the SEC.
If the founders have a solid business track record, make sure that the start-up company has:
- A thorough business plan (banks generally require a company to have a detailed business plan before they will offer financing to the company)
- Sufficient start-up capital
- Satisfies legal licensing requirements for the jurisdiction that they conduct business in
- Is registered with federal, state and local reporting agencies (e.g. Internal Revenue Service, state tax offices)
Start-ups that have established Human Resources and Legal departments might have existing policies and procedures that will help them to steer clear of costly lawsuits, events that can drain a company’s (start-up or not) profits. Meet with the company’s senior management team prior to joining the company.
Doing Your Due Diligence in Person
If you are unable to connect with members of the senior management team, schedule a brief meeting with one to two managers in the department you will be working in. Holding the meetings in person will give you the chance to monitor the managers’ body language. It will also give the managers the chance to measure how passionate you are about helping to move the new company toward success.
Take the time to chat with colleagues. The environment at the company might likely be relaxed and open. It could also be stiff and confining. Find out what they like most (and least) about the firm. Be honest with yourself. Avoid talking yourself into or out of a business venture that does not feel right to you. Also, make note of how well working at the company will help you to reach your career goals.
Overall, keep in mind that a well structured start-up could lead the way technologically, medically, socially or academically over the next several decades. And you could be a part of that excitement. After all, every successful company began as a start-up.
Get into Spiral online at: https://www.ebookit.com/books/0000000841/Spiral.html
Check out Long Walk Up online at: https://www.ebookit.com/books/0000000531/Long-Walk-Up.html
Sources:
http://hotjobs.yahoo.com/career-articles-pros_and_cons_of_working_for_start_ups-312 (Monster: Pros and Cons of Working for Start-Ups)
http://www.allbusiness.com/human-resources/careers-career-path/11129-1.html (All Business: Advantages of Working for a Start-Up)
http://www.incorporate.com/completing_startup_tasks.html (The Company Corporation: Completing Start-Up Tasks)
http://smallbusiness.dnb.com/company-activities-management/financial/12327855-1.html (Dun & Bradstreet: How Much Working Capital Does A Start Up Really Need)
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