I have been working on cavnessHR for over a year now. When I say working, I mean when the idea first came to me, which was January 2016. I have talked to many people about cavnessHR and received some great feedback. I have done lots of networking to spread the idea of cavnessHR. However, I am now realizing I have not yet explained what cavnessHR will do and my strategic plan for cavnessHR.
But before I lay everything out, I believe it would provide some context on what led up to cavnessHR.
In my prior life I was an Adjutant General Officer in the U.S. Army. Adjutant General is the equilavent of Human Resources for the U.S. Army. I had made the decision to retire and I was active on LinkedIn and other social media as a way to put myself out there in an attempt to find a job. One day I received a LinkedIn request from Mark Monroe. @iammarkmonre Mark then sent me a message asking if I could meet with him and discuss how the Army prepares Veterans who are transitioning out of the U.S. Army. Mark told me he wanted to learn this information to help him with his startup called MyUnfold.
Before this I had never heard the term startup and I had no idea what this term even meant. During our meeting I explained how the U.S. Army prepares Veterans to transition and Mark explained to me about startups. As the meeting was coming to an end I asked Mark, how does a startup take care of their HR. Who does HR for MyUnfold? Mark replied that usually Startups don't even think about HR until later and that no one was doing HR for MyUnfold. So then a light goes off in my head.
Here I was getting ready to retire, in the middle of a job search and I had no experience in the business world. So I asked Mark how about if I did your HR for you. I could gain valuable experience and you would have someone else to help you with your startup. Mark said that was an interesting idea and to let him think about it. After this meeting I started putting together HR products for MyUnfold without hearing Mark's answer. I then started going to MyUnfold meetings and participating in other MyUnfold events. So without giving Mark a chance to say yes or no, I made myself a member of the MyUnfold team.
I learned so much while a member of MyUnfold and how the startup world worked. I like to say that I did everything for MyUnfold except code and design. We had a great team at MyUnfold. @anukulrm @optimusDiaz @batboyink @TheFace206 to name just a few. But being in a startup and making it successful is not easy and most fail. Despite a great team and a great idea, for whatever reason, MyUnfold did not make it.
I gained many valuable insights during my time with MyUnfold. I met many great people within the startup community and made some important connections. One item I learned was that many startups had no HR and did not even have HR as a planning consideration for their startup. I went on to learn that most small businesses do not have HR. I saw a business opportunity to provide HR to small businesses with less than 50 employees.
Now that I have provided the story of what led to the idea of cavnessHR, I can explain how cavnessHR came to be and my plan for cavnessHR.
In January 2016, the idea came to me to start a company that provides HR to companies with less than 50 employees. From January 2016 to July 2016, I went to networking events and met with as many startup CEOs as I could. I reached out to Founders on social media as well. I talked about my idea and asked for feedback. I wanted to know if their was a need in the market for my idea.
Below is a breakdown of the responses I received.
As you can see I received positive feedback from 71%. Based on this, I felt comfortable with moving forward with my idea and doing my best to make it a reality. In July 2016, I decided to found a startup that would assist companies with less than 50 employees with their HR. I continued to lay the ground work for this startup and in September 2016, I registered cavnessHR in the state of Washington.
During my research for cavnessHR I learned many interesting facts. One is around 543,000 new businesses start in the U.S. each month. I learned that according to the Small Business Administration there are over 5 million businesses in the U.S. with less than 50 employees. These businesses account for the employment of over 31 million people and over 1,154,769,764 ($1,000) in annual payroll. To break this down further, 97.9% of these have 20 or less employees. This does not include the 23 million self employer businesses in the U.S. A self employer business is a business with a single owner and no other employees.
Most people believe every company has HR. When in reality most do not have HR. True, companies like Amazon, Boeing, Microsoft or the larger ones do have dedicated HR. However, most small businesses do not have dedicated HR. There are many reason for this which I will cover in another blog. I did my best to find a source that states what percentage of small businesses do not have HR. Despite my attempts to locate this information I was unable to find a source. From talking to Founders and small business owners, people in the @SBAGOV, @SHRM and others from around the U.S. I am confident that most, if not all businesses with less than 50 employees have no dedicated HR.
One reason for most small businesses not having HR is the cost associated. To bring on a dedicated HR person. The cost can be from $50,000 to $100,000 per year depending on the experience and skills of the HR person. Then their are HR Consultants. Depending on the skills and experience of the HR consultant. The HR Consultant will charge from $150 to $400 per hour. As you can see both are cost prohibitive to a small business. Which is one of the reasons why small business owners make the decision not to bring on HR.
I now want to cover my strategic plan for cavnesHR and how I plan to make this a reality. I envision cavnessHR being the company every business with less than 50 employees in the U.S. uses for their HR. I see cavnessHR doing HR from after product/market fit to when the business hits 50 employees. I envision cavnessHR providing HR products/services at a cost that is not averse to small business.
Part of my plan involves how cavnessHR delivers HR products/services to small business. Most, if not all HR now is delivered by high interaction and high touch points between the business and the person and/or company doing HR for the business. My plan involves providing HR products/services through a cloud based system with everything being digital. A small business would come to the cavnessHR website, select a product and/or service. Depending on what product/service is selected, a questionnaire will be sent to that small business. The small business will return the questionnaire and then based on the answers a HR product/service will be delivered to the small business via a cloud based service.
cavnessHR will provide the following HR products/services to small business in the beginning.
Salary and Compensation
Partnerships with @easecentral @justworksHR @kin_hr @webhrco @bamboohr @Gusto to provide HR software and payroll.
I want to focus on these HR products/services to see if cavnessHR can find product/market fit. If cavnessHR does find product/market fit, I will expand to include other HR product/services in the future.
Another way to decrease the cost will be to provide HR Advice to small business using modern technology. HR Advice could be provided via various methods that do not include having a HR consultant on site at the business or a constant interaction between the small business and cavnessHR. I believe that quality HR advice can still be provided to small business without a high interaction between the small business and cavnessHR. While still providing great customer service.
I am currently receiving help with my MVP from IT 355 Agile Development Methods class @GreenRivercc. I want to take this opportunity to thank @kendrickhang for letting me pitch @cavnessHR as one of the projects for his students. I also want to thank Nicholas Perez, Jeremy Belt and Michael Peterson for selecting @cavnessHR for their project.
In future blogs, I will cover how I plan on validating the MVP and how I will discover if cavnessHR will obtain product/market fit.