When an entrepreneur struggles in business, it’s typically one of two things – product-market fit or operations. Of the two, operations requires a level of bandwidth that’s difficult for an entrepreneur to manage alone unless they are a solopreneur. I wrote about solopreneurship in Part 1. You can check my Substack to read it.

What Is Operations

In simple terms, operations refers to the functional parts of an organization – admin, HR, finance, sales, customer service, and so on. These are operational units typically managed by a Chief Operating Officer (COO) or Operations Manager.

The primary purpose of these units is to facilitate and manage growth – what many people call “scale.”

Operations Exist To Drive Sales

Before building an operational structure, understand that the main objective is to acquire more paying customers (or daily active users if you’re a tech brand). If you plan to grow organically, you focus on clients to generate cashflow. If you want to raise funding, then you focus on user growth to demonstrate traction. (Early-stage VCs care more about adoption than revenue.)

There is no reason to build operations except to drive sales. Absolutely none. Period.

This means you do not add an additional operational unit unless it has a direct impact on the bottom line. To do otherwise is to create a bloated organization that cannot support itself.

Start With Sales And Customer Service

When you start a company, only two functions are required – sales (to get paying clients) and customer service (to onboard new clients and retain existing ones). If you’re a digital company, you’ll also need a tech unit.

Sales includes every activity that brings in clients – from cold calling to digital marketing to in-person presentations and meetings. Everything you do must drive revenue.

In the early years of a company, all other functions are typically handled by the founder and inexpensive interns. This is how to build a lean business.

The Founder Must Be Multi-Skilled

The founder must be multi-skilled in those first years to reduce operational costs. If you don’t understand finance, sales, HR, etc., then consume as many books and courses as you can until you do.

I see many entrepreneurs hiring people to do tasks they could handle themselves. In the early days of my companies, I ran the accounts on Wave and used Excel for task tracking.

Only hire a team if it frees you up to focus on higher-level tasks like sales. Many entrepreneurs want to focus on product, not sales. But if you don’t sell your product, your company will die.

Even when you hire people, if you don’t understand how operations work, you won’t spot red flags early – and your organization may fail.

No One Should Hold You To Ransom

There’s a saying in Lagos: you don’t hire a driver until you know how to drive. If they vex, they can’t leave you stranded on Third Mainland Bridge. The same principle applies to running a company. No one should be able to hold you to ransom. You should know a bit of everything so you can hold the fort until the right team is in place.

A Word On Team Fit

Many entrepreneurs settle for just any staff. I’ve done it myself. This happens when you’ve been recruiting for months without finding the right person. It’s especially common in places like Africa, where it’s hard to find competent people at an affordable price point for a young business.

As a start-up, you will compete with banks and oil companies. Only those who resonate with your mission will take a pay cut to work with you.

So, you end up onboarding whoever is available. But don’t settle. If you hire the wrong person, you’ll still end up doing the work yourself.

Break The Role Into Parts

When you can’t find one person for a role, break it into three or four smaller roles. Then hire interns to manage each part. This is where having Standard Operating Procedures (SOPs) helps. If your processes are mapped out and documented, even a half-competent person should be able to follow the instructions.

Documenting your SOPs is one item you must do, even if you bring in a consultant to help to it. SOPs help you to onboard team members very quickly.

How To Build Operational Units

There are three ways to build operations:

1. Use other people’s money: accelerators

2. Outsource some things: fractional services or consultants

3. Use your own money: full-time staff

Accelerators

If you’re lucky enough to get into an accelerator, you’ll receive free operational support in exchange for equity until you achieve product-market fit.

Once you have traction, you may raise enough funding to build your own team. The accelerator may even assist with recruitment and candidate recommendations.

Outsourcing

You can hire a consultant for just about everything except day-to-day admin and the founder’s responsibility for strategy, sales, and partnerships.

You can outsource accounting, HR, digital marketing, and other operational functions.

The challenge is that many consultants are incompetent. You may need to try a few before finding the right one. As with building your team, don’t settle.

Full-Time Staff

Once your sales efforts begin to yield results or you raise funding, you’ll be in a position to hire highly competent full-time staff.

Hopefully in this write-up, you’ve learned a thing or two about operations.

I wish you all the best.

Do not add operational units unless they have a direct impact on your company’s bottom line. To do otherwise is to create a bloated organization that cannot support itself.

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For more, read Solopreneur or Entrepreneur Part 1: Designing Your Company From the Start