Planning a Start-Up? It could be your first business starting from scratch, it could be a funded start-up, or it could be a start-up division in an ongoing business. Whatever type of start-up venture you are involved in, there is common ground to be covered to ensure your new venture is a success.
There are all sorts of articles around which are of little value. They tell you to choose your business structure wisely, whether you want to trade as a sole trader, under a partnership arrangement, as a company or as a trust. However the answer to this simple question is not so simple; there are a myriad of implications to be considered.
These factors are as varied as who is investing money into the venture, who is investing other resources into the venture, whether the business will be operating locally or internationally, and what tax, grants, and compliance restrictions are placed on the activity to be undertaken. Because of these and other factors, the wisest course of action is to seek the wisdom of an expert.
However once this structure is decided, there is this common ground that should be covered by all business ventures.
Systems and processes are paramount. Without effective systems and processes, your business is suffering from two costly perspectives. The first of these is operating efficiency. If your business is not operating as efficiently as possible, you are behind your competitors from the outset. Every sale or service is going to be priced higher than your competitors, or provide you with a smaller profit margin.
The second perspective is that systems and procedures enhance the capital value of your business. They help to create a separation between you as an individual, and your business. They create value in that another individual can replace you, operate in accordance with the established systems and procedures and continue to operate profitably.
Further, these procedures mitigate the inherent risk that your business faces if one of your employees leaves your business. The situation is as prepared as possible for a new person to come in and continue that role with minimal disruption to the workflow.
The final piece of advice in a Start-up is to invoke a strategy. This is not complicated, nor is it different from any other pursuit in your life. Create a plan of where you want to go and how you want to achieve it. In “business speak” it is called a Business Plan, and it creates clarity in your goals as well as the pathways to take to achieve those goals.
And as with any good strategy is should be “cyclical”. What I mean by that is that 999 times out of 1000 your original plan will have a lot of great content, but it won’t be prefect. It needs feedback and constant improvement. A good business plan will be compared to actual performance regularly, and the plan itself will be refined at appropriate intervals.
Not only will you find that your business plan wasn’t perfect, you’ll also find that the environment that you are operating within is dynamic, and the changes need to be factored into your future.
All planning should be treated the same way. Business Plans, Budgets, Marketing Plans, Cash Flow Forecasts, they are all plans which are useful for gauging performance, but outlast their usefulness if they are not dynamic and regularly revised.
In summary, the key takeaways are:
- Seek expert guidance on the structural set-up of your venture;
- Develop effective Systems and Procedures across all aspects of your business;
- Plan, measure performance against these plans, and regularly review the plans.
