How my start-up nearly overwhelmed me
Business planning is key to plotting a growth path for your start-up, but the reality often involves getting your hands dirty with an overwhelming number of tasks, as entrepreneur Edward Mallet found out.
Mallet is the managing director of Employsure, a Sydney-based employment law consultancy. He set up his business last year after recognising a gap in the Australian market.
“I was a barrister in the UK, specialising in employment law,” he says.
“I suppose I was providing advice on these issues in the most old-fashioned sort of way, charging by the hour or the day for my services.”
After relocating from the UK to Australia, Mallet decided to set up a one-stop-shop service aimed specifically at SMEs.
“Until recent legislation changes, there wasn’t such a heavy demand for advice at an SME level,” he says.
“Fair Work Australia changed that and suddenly SMEs needed advice as much as anyone. What makes us different to a HR firm or a law firm is we offer an entire service for a fixed fee.”
“We are a genuine one-stop-shop for these issues.”
However, Mallet says he underestimated how much money he would need to invest in the business, and soon found himself “running on the fumes of a start-up”.
“I invested all my own savings in the business, which was about $250,000 Australian,” he says.
“I used to have a property in the UK. I sold that when we moved over here and spent that money when I started the business.”
“As a classic start-up situation, I would run around doing 101 things, from sales to dealing with office admin to customer service – the whole lot. That’s not the way to create scale.”
Eventually, Mallet knew he would need to seek outside help in order to give his business the boost it needed, so he started looking towards investors.
In the end, he pitched to UK-based entrepreneur Peter Done, who runs a similar employment law consultancy, albeit on a larger scale.
Last month, Done agreed to invest $2.5 million into Employsure in order to push it forward.
“I managed to get [Done’s] number and give him a call. Imitation is the greatest form of flattery, so I said, I just set up a business that looks a lot like yours,” Mallet says.
“I was sort of picking Peter’s brain and he turned around sometime after that and said, I’ll invest some money in it.”
As a result, Employsure has grown from a team of eight advisors to 20 staff, including 12 salespeople. According to Mallet, the headcount could be as high as 35 by the end of the year.
“When you start a start-up, you’re often submerged in the business when you should be working on the business,” he says.
“I can now take myself out of the business and look at it strategically now, rather than running around trying to build a client portfolio and service those clients personally.”
The business turned over more than $1 million in its first year, and is looking to turn over close to $5 million this year.
Mallet says while the start-up phase was challenging, he couldn’t have approached Done with quite the same gusto had the experience been mistake-free.
“There is always a great keenness to do everything at a million miles an hour. Everyone hears these wonderful start-up stories where people retire and sit on a beach after three years,” he says.
“But you need to go through that teething process,” he says.
“You get pretty bloody overwhelmed, quite frankly, when you’re working every hour and every weekend, and you’re not paying yourself an income, and you’re not taking holidays.”
“I feel you need to do that in order to know your business inside and out.”
“You need to be able to get your hands dirty, from a starting point, to really understand what your business does. Then go to someone like Peter and say, I’ve got this great business.”