MBA1665 Q&A Wednesday: Should I get interns to work for my startup?

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Hey oh welcome to the $100 MBA Show Business Building goodness every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the hundred dollar MBA, a complete business training and community online over at 100 MBA net. Get on over to our website and download our Breakout Business Roadmap so you can know the step by step stages and phases of building a breakout business so you can quit your 9 to 5, build something that you actually enjoy and earn more money. Today's episode is a Q and A Wednesday Episode. On our Q and A Wednesday episodes we answer a question from one of you, one of our listeners. If you have a question you want to ask, just email me over at Omar MBA Net. Today's question is from Cal and Cal asks, should I get interns to work for my startup? I just went full time on building my tech startup and I'm wondering, should I hire some interns? Is this a good idea? Is it a good way to get free or cheap labor to help get my business going? Any advice would help. Thanks Cal. This is a solid question from Cal and it's a question that many businesses at different stages ask, Should I hire interns? Is it worth the investment, the investment of time and effort to train them? My take on this might surprise you. I have very, very strong opinions on this. But of course there is an exception to my opinion. Fresh grads, eager to learn, eager to get experience, is a good resource. But what is it going to cost you? So let's get into it. Let's get down to business. So Cal writes in for Q and A Wednesday and asks, should I hire interns for my startup? Interns are often college grads or even college students looking to get experience so they can put it in their resume. They can put it in their CV and be able to get a job eventually. Sometimes interns are do so well at the company they're interning at and they actually got a job there. So on the surface, a lot of people think, oh, this is a great idea because I don't have to pay them, or maybe I have to pay them very little. And I get people that are hungry, I get people energetic. They come here and help my business grow. But many people forget many different aspects of bringing on interns to your company. First of all, the reason why they're interning is because they have no experience and sometimes they don't have many skills. So you're not getting the best talent to work on your company. Okay, so you're actually getting somebody who's learning on the job. Now some interns will come with skills they learned before they went to university, or maybe it's their interest, maybe they like web development and this is something that they do on the side and they can intern as a web developer for your company. But even somebody like that is not going to be skill wise and experience wise as good as somebody who you would hire and pay them a salary because they will get what they deserve and they will give you deserve for that salary. Right? So just keep that in mind. Okay? So my personal opinion when it comes to hiring interns is that the nature of an intern is they're looking for a brief stint somewhere to learn some skills, gain some experiences. In my experience and from the experiences of the different entrepreneurs I've coached and helped along the way, a small fraction of them actually stay and become employees in the company. They're looking usually for six months to a year of experience. And in my experience, it takes about three months to ramp anybody up new in your business, to get them used to your culture, to train them so they know exactly what to do and how to do and how to fulfill their job role. And it takes even longer for interns because, hey, they're not coming with any experience, right? They're not coming with any job experience in your realm. So they're going to take a little bit more time to ramp up. So if they're around for six months experience, you're really only going to get three solid months out of them before they move on and you invested a lot of time, effort. Somebody's got to train them, somebody's got to show them how to do the job, show them how to perform well and then they leave. One of the biggest costs in business is turnover, employee turnover. You want to keep your employees as long as possible because it's costly to find new talent to, to hire new talent and train them. You want to keep people for at least two to three years to get the most value out of them. Anything over that is gravy, and it'd be awesome if you can keep them for longer. But anything under two years, really, you're losing a lot of money and time and effort in training and hiring and all that stuff. So that's even more true with an intern. Now, I know that you're not paying them or paying them very little, but. But again, the expectation that you have in terms of output from an intern is much lower from an employee that has, you know, KPIs and is going to be held accountable and all that kind of stuff. Now, cals, in the tech space, you need to grow, you need to sprint. You need to really get moving fast in your business and get your product out there so you can't be wasting time on turnover, on interns leaving, on people coming and going. And it does affect the culture. When you have new employees or new teammates, every so often you want to have a core group of people that are in the team. And of course, people will leave and come and go, but not at the rate of an intern. Now, there is an exception. If your intern is going to be doing something that's more of an investment in your business that you can keep after they leave. Let's say they are documenting standing operating procedures, your SOPs, how do you do everything in your business? They're documenting your systems and your playbooks so that when you do make a hire, they can just pick up the playbook and know exactly how to fulfill every task. Another example is content. If they're writing content like blog posts, if they're good writers, then those blog posts will, you know, stand the test of time and will serve your business well after they leave. But in my experience, if they are a good writer, if they are a good writer and they're writing amazing blog posts, they can get paid for it, right? They, they can freelance and they won't intern. So it's a bit of a difficult situation. Of course you can find great, talented people and train them. And that leads me to my next point. If you do want to take on interns and you found great talent that is willing to intern for your company, then stipulate that they have to be an intern for a period of time. I would say at least 12 months. Now, in my opinion, you should compensate them in some way, even if it's minimum wage. But compensation matters. Okay? Giving them money for their time now that you invested a year. Also stipulate that they'll have an evaluation at the end of the year and they'll be offered a position if they pass the evaluation. This gives them some sort of upward mobility, gives them something to shoot for. Okay, I like working here. I like the work I'm doing here. I'm learning a lot. I wonder how much I can learn if I was a full time employee. So if you have a path for them, it makes it a whole lot easier for you to sell the idea of graduating into becoming an employee. And hey, starting your career at this company, get a few years under your belt and then move on to greener pastures.

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To wrap up today's Q and A Wednesday's question from Cal. Should I hire interns for my startup? This was a tough one for me to deliver, but it's the truth. If you're in the tech space, Cal, you need to grow fast, quick. You can't afford having to train and retrain and retrain interns. So if you need content, if you need procedures, lock them into a year with a, you know, a chance to become a full time employee if they pass your evaluation. If that's not an option, just keep moving forward. Do not worry about hiring interns. See if you can hire one experienced player on your team. One experienced player can equal five, you know, inexperienced people or ten interns. I'm serious. I've had employees on my team. I have employees on my team that are gold. They are worth five or six hires, and they're expensive, okay, so you get what you pay for, but sometimes you actually save money by hiring somebody that's worth their value. Again, this is my personal opinion. This is my personal advice from my own experience and the experience of the people I've coached to build their own businesses and the stories I've seen with the students I've seen at the $100 MBA. I wish you all the best, Cal, with your startup. Go get them. That wraps up today's episode. Thank you so much for listening. If you have a question you want to ask, just email me over at omar00mba.net and I will make sure to answer it right here on Q and A Wednesday. Don't forget to hit that subscribe button on whatever app you use to listen to podcasts. Whether it's Spotify or Stitcher Radio or Apple Podcasts or on every platform, it's absolutely free to hit subscribe. So do that right now. Before I go, I want to leave you with this. When the stakes are low, the result is usually not something really special. This is just in general, in life, if I'm in a position or a job or whatever where, you know, it's not a big deal. If I get fired, it's not a big deal. If I lose this job, you know, there's less pressure for me to perform. This is just human nature. Okay? Not everybody's going to act this way, but in general, people will. Okay, if you want to use a rule of thumb. But if the stakes are high and they really want to stay there and they really think this is a good position and they're getting paid and they don't want to lose this job, they're going to have incentive to keep it. It's really hard to fight human nature, so keep that in mind when you are making decisions like this. Thanks so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take.

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