BC Business
bucket-list_5.jpgDo or die: SIx things your small business won't live long without.
No matter their age, all businesses need a bucket list of processes to avoid certain death. Martin Zwilling of Startup Professionals, an Arizona firm that helps entrepreneurs, recently wrote an interesting post listing business processes that start-ups need to survive. It occurred to me that many of them may also be absent from established businesses, at least absent in the sense that they're nascent, underachieved, or ignored.
bucket-list_5.jpgDo or die: SIx things your small business won’t live long without.
Martin Zwilling of Startup Professionals, an Arizona firm that helps entrepreneurs, recently wrote an interesting post listing business processes that start-ups need to survive.
It occurred to me that many of them may also be absent from established businesses, at least absent in the sense that they’re nascent, underachieved, or ignored.
The list suggests that your start-up won’t survive without these processes. I suggest that a business may survive the start-up phase, but won’t live for long without similar processes. Certainly it won’t thrive and grow.
So, before they die, all businesses might want to consider this bucket list of needs:
Even established businesses have trouble with this one. I remember one accountant telling me how clients would bring all their receipts and such to her at tax time in chicken buckets, plastic bags, and boxes. Clearly they didn’t have a financial management system in place.
Get one thing straight: Financial management is the heart of any business, and if you don’t have a formal system that tracks every cent that goes in and out, you’re going to be in serious trouble.
At the minimum you’re going to be bleeding cash and will be in constant trouble with the tax people. So forget the ad-hoc spread sheet, and get yourself proper accounting software so you can see how your financials are doing from year to year. And triple entry it in paper and spreadsheets if you’re really worried about it.
Sure bookkeepers can do it for you, but they have to rely on your sending them information — which you’ll likely forget or misplace.
Whether you’re a one-person shop and doing everything yourself or you have 10 or 20 people working for you, you need to document all processes — product development processes, sales processes, responsibility charts and work descriptions, and everything else your business does.
For one, this will allow you to track things. But more important is that you will have an asset that will help you sell your business down the road. This is especially true for knowledge-based businesses that employ a skill to earn revenue. Without this “business book”, you have nothing to sell except what’s in your head.
As the man said, treat your business like a future franchising operation, which requires manuals for everything.
This is separate from bookkeeping. Funding is that important blood that allows your business to operate and grow. It can be done through cash flow, through loans or lines of credit, through friends and family financing, or through investment.
So you have to have a clear strategy in place (based on research and knowledge) to obtain funding as you go forward. This is especially important if you’re looking for loans or investment.
This is part of a human resources strategy in that, today, many tasks that were previously done by hired help, are now outsourced.
Many businesses today rely heavily on outsourcing because it’s more cost effective, and allows them to run a leaner shop.
So you should be clear on the kind of resources your company needs today and tomorrow. And you should be forming a strategy now to take you into the future. Run the numbers and see when it’s more cost effective to hire or hire out.
Almost all businesses today rely on IT, if not for everything, then certainly for a proportion of their business processes.
So, it may behoove you to spend some time on thinking about your information technology systems and needs. Sit down now and examine your entire IT process, and plan for its future.
Don’t just rely on sales people to tell you what you need. You don’t have to be a super techie, but you do need to take an active part in the decision making.
Many of you know that I’m not a real fan of overly heavy business planning at start-up. But I do recognize the need for elements of it, such as understanding the market opportunity, your business model, and the market in which you’re operating.
This is not a one-off process, however, and must be re-examined quarterly. Things change. As you become more established, a more formal business plan is a must, because, presumably, you’re no longer flying blind.