Don’t Outsource Your Business

We spend a lot of time talking about team building because it is the most important thing you can do for your business in the early stages.  However, there is nothing that is not important in the early stages and you as a founder need to familiarize yourself with all aspects of your business.  Don’t outsource anything until you understand it.

We have met with several founders who have or are planning to outsource various aspects of their business.  Some are developers looking for business folks to handle all their financial and marketing stuff because they don’t understand it and that is not what they do.  Others are business people who are planning to hire a developer or a development company to build their product.  Many pass the legal issues to Legal Zoom or a similar company to take care of the formation issues or they just grab contracts off of the internet to use.

Founders who want to grow need to understand every aspect of their business.  Investors want to know that you know your company.  They will not invest in a company if the founder cannot answer their questions and if you have not been active in every aspect of your business, you will not understand it well enough to discuss it intelligently.

Outsourcing can also lead you to some very bad situations, particularly on the legal side.  I recently heard of a small business corporation who was negotiating a settlement to get out of a lease.  The corporation had been administratively dissolved two years ago for not renewing their corporate registration annually.  They had formed with Legal Zoom, who did not tell them that they needed to renew annually.  Now, because the corporation no longer exists, the individual owners are exposed for the money owed.

As for contracts and other legal documents, the laws of each state are different. When you take a contact from the internet, you don’t know which state’s laws the contract reflects and every contract should be tailored to the parties involved.  You need to understand the terms that are specific to your situation.   Then you don’t outsource it but work with an attorney to review and refine it.  With legal matters, it is always good to have anything done reviewed by a qualified attorney.  It is much cheaper than paying later because you forgot to put in the special clause or “magic words” that sealed your protection from suit.

It is your business.  Own it.  Don’t outsource!


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