Service Based Businesses Have Got No Time! – Part 2

Two’s Company

There are many advantage to starting with at least two people. Here is some of the maths:

• Two people means you can get twice as much done. Each person only needs to do enough to cover half the salary of that first employee.
• Two people means each can specialise is slightly different but related areas. For example one person may specialise in web design and the other in website marketing. This means you may be able to target bigger clients.
• You will know twice as many contacts between you meaning twice as many potential clients and twice as many potential referrers. You can also spend twice as much time between you both developing contacts.
• You could offer Two different services to each potential client meaning you will probably generate twice as much business from all your contacts i.e. someone that doesn’t need a website may want marketing.
• As each person specialises more in their particular area instead of trying to do a bit of everything they can each charge a higher rate per hour for their specialist areas / provide more value per hour
• You will have twice as much access to finance if you are both financing the business personally

These advantages create a compound effect. For example having twice as many contacts and twice as many services to offer each contact means four times more potential business, multiplied by all the other benefits too make it much easier to get to the stage where you can take on that first employee.

There are other advantage too like having another person’s experience and perspective, having someone else to bounce ideas of, being accountable to someone else which means increased motivation. Your best and biggest clients will be better and bigger too as they came from a pool of twice as many contacts.

Research on what is called the Unicorn Club looked at all businesses in the last 10 years that have been valued over a billion dollars. The only common factor that applies to nearly all of them is that they were all started with teams of two or more people that had years of history between them. And these weren’t service based businesses in the traditional sense, most of them are software based like facebook, uber, groupon and yelp. So the advantages of multiple founders goes beyond the obvious mechanical points I mentioned above.