Steve Riley, President and CEO of echo11media, came whipping into the Chequer’s parking lot a couple Fridays ago on his R 1100 RT. It was the perfect fall day to enjoy good company and some crab cakes on the patio.

Founded in 1998, echoEleven combines custom eLearning consulting and development with a Adobe Training Partnership to provide the most comprehensive eLearning services. Over the past 3 years Steve has expanded the core business of Adobe authorized training to include two SaaS product offerings and is quickly growing his recurring revenue stream. Steve’s vision of the future for echoEleven is to continue to expand and evolve their online learning products.

When a major Atlanta-based airline found themselves in midst of a merger with a dying online learning technology, they turned to echoEleven for their state of the art online learning technologies and reduced their content creation turn around time from months to days!!

Ten years of bootstrapping – from the rubble of dot bomb, through 9/11 and now into the credit crunch – has left Steve with the thick skin necessary to continue to grow echoEleven through the challenging years to come. Over lunch we discussed the decision de jour. His office lease was up – renew at no real financial change or sign the contract for some slick new space that had been in the works for months – twice the space and twice the monthly expense. Steve recalled that he knew iXL was heading south when he saw their name on the Equifax building. That said, a calculated risk… new office and growth… the decision to move was made!

While he is an entrepreneur, Steve considers himself a business owner first and foremost. He bristles when someone asks his exit strategy though he knows that’s an important part of his business horizon. He is in it for the long haul slowly building recurring revenue and using whatever extra cash is on hand to fund innovation.

So what advice would Steve give a start-up in these tough economic times – what key success factors are necessary to surviving the coming years?

Keep a positive attitude.

Cash flow is king. Keep expenses low and remain flexible.

Position the company as a solution that reduces client costs.

Maintain low to no debt obligation.

Create and grow recurring revenue.

What others would you add to the list?

After spending months or maybe even years with little to no employee benefits – being covered by COBRA, your spouse’s policy, or maybe a substandard individual plan – a newly funded start-up may be tempted to hasten the burn by purchasing that well-deserved, gold-plated employee benefits package. Before doing so, answer this question: “Why do you want to sponsor an employee benefit plan in the first place?”

Attract and Retain Employees

There is one overwhelming reason to become a plan sponsor and that is to attract and retain employees. You should purchase whatever benefits will allow it to hire and keep qualified employees. A company trying to recruit highly trained engineers in a tight job market will have a different benefits strategy than one hiring run-of-the-mill, non-technical types.

The level of premiums you pay on behalf of your employees and their families should follow this same strategy. Should you pay 100% of both employee and dependent coverage? 100% employee and 80% dependent? 50% employee and 0% dependent or something in between the extremes? All will depend on what it takes to attract and retain employees.

What to Buy?

Scarce dollars should follow catastrophic risks. Suffering an accident or illness which results in a $200,000 medical bill is catastrophic. Becoming disabled and therefore unable to earn a paycheck for the next 30 years is catastrophic. Having to buy a pair of eyeglasses or having to pay for a root canal is inconvenient, but not catastrophic.

Consider purchasing the components of an employee benefit plan in the following order: 1. health insurance, 2. long-term disability insurance, 3. retirement plan, 4. dental insurance, 5. employer paid life insurance, 6. short-term disability insurance, and 7. vision insurance.

You may ask why I put dental insurance so high on the list. True, dental in and of itself is not a great insurance buy, but it is an excellent employee benefit. Believe it or not many employees will appreciate your dental plan more than your medical insurance. People typically get their teeth cleaned twice a year and under a good dental plan it will cost them zero. Dental is a very visible benefit. Whereas it often takes a significant sickness or injury before someone truly understands the value of medical insurance.

Insurance Brokers

Entrepreneurs are consistently told to surround themselves with competent advisers. When it comes to employee benefits you should seek out the services of an ethical insurance broker. It is that person’s job to get to know your business – your needs as an employer, to prepare a request for proposal, to shop the insurance marketplace, to consolidate the quotations from various insurers into an easy to understand format, and then to help the business owner come to an informed decision as to which insurer and what plan(s) should be offered to employees.

It is the insurance broker’s responsibility to conduct employee enrollment meetings. These meetings are a golden opportunity to explain how the employee benefits package is an integral part of the company’s long-term vision.

Conclusion

If you are smart enough to get a start-up off the ground then you have the mental capacity to make a valid argument for a Carrera GT as your new company car. Or as reality enters the picture maybe you should install that badly needed employee benefits package instead. With the help of an ethical insurance broker, select plans and contribution schedules that will attract and retain the employees you need to grow your business. What do you think? Car or benefits?

Clearleap’s mission is to harness all of the power of video and to make the experience easy, reliable and flexible. It is developing a revolutionary new internet video system that enables any business to easily upload, manage, enhance, and distribute digital video.

Clearleap is working on cutting edge video technology and $9 million in recent funding from Trinity Ventures and Noro-Moseley Partners validates the potential of its business model.

Clearleap boasts a talented group of founders who have bootstrapped the company thus far. In July 2007, we installed a solid core of benefits (health and dental) mainly designed to take care of the founders’ immediate needs. Now, as Clearleap is poised to ramp up its operations clearly the focus must shift to the goal of attracting and retaining employees.

Clearleap is an exciting, vibrant place to work. The founders recognize that Clearleap’s employees will drive its success and that a responsive benefits package is one of the keys to employee satisfaction.

Deborah and I are honored to have a front row seat to witness the evolution of such a talented young company. Keep your ear to the ground as you’ll be hearing a lot more about Clearleap soon…