‘One of the big mistakes I see with entrepreneurs is that they let their start-up grow organically, adding a person as the need arises, almost with a sense of surprise and often, far later than needed.’
You’ve made it, you’re an entrepreneur. Your start-up business that you started from nothing is taking off. You keep winning contract after contract and the banks love you. The only problem is that you’ve not seen the inside of your eyelids for days and you’ve forgotten what the gym looks like. Your work life balance is through the floor and you suddenly realise that you can’t do this on your own anymore.
It’s time to transition your start-up to a serious business. You need staff, office space and equipment and you’ve got very little experience in how to take care of any of this. Now what?
One of the biggest challenges for successful start-ups is transitioning from what is often a one or two person operation to one that can grow very quickly into 5, 10 or even more people.
One of the big mistakes I see with entrepreneurs is that they let their start-up grow organically, adding a person as the need arises, almost with a sense of surprise and often, far later than needed
In the same way you wrote an initial business plan for your investors when you started the business, it’s time to sit down and hash out a growth business plan.
In the plan:
Identify possible ‘what if’ scenarios for different levels of sales.
It’s important to spend some time thinking about who and what you might need for each of these scenarios. If you don’t already have long term projections for good and bad performance then get started. You need to have a plan for whatever may come. A SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) is a good way to tackle this. Consider what a sensible rate of growth is. Could you handle it if sales doubled, tripled or quadrupled in the next twelve months? Plan to enter new markets and seek out new contracts at a rate your business can handle. If you can’t deliver, don’t commit. Over-committing could damage your reputation and ultimately future sales.
Identify your knowledge gap areas.
You may be a super creative ideas person but do you have the skills to manage all parts of your business? Be brutally honest because if you are not, you could end up damaging your business performance by trying to cover areas you are not qualified to manage properly. Successful long term founders bring in key personnel that compliment their own skills and compensate for their weaknesses.
Fill the gaps
If you do have gap areas, think about how to fill these on with your current limited resources. Can you take advantage of free business mentoring services or afford to contract someone a few hours a week to help? You could even consider bringing in a couple of skilled directors to assist.
The pitfalls for new businesses are endless. If you’re really new to running your own business you’ll be staggered about how much you don’t know about what you don’t know. Logistics, tariffs, compliance, international standards, employee entitlements, taxes, supply contracts, it just goes on and on. Here are some tips for tackling the biggies:
Get your accounts in order.
Again, the right kind of director or business mentor could help, otherwise consider a professional management accounting service. These services can prevent you from creating financial traps for yourself that could cost you later. Professional accountants can save you a lot of money in fees and taxes and set you up for success from the beginning.
Become your own Human Resources expert.
There are plenty of resources online that will take you through the legislation and requirements for your own state, region or country. Know the requirements for hiring, entitlements and holidays, employment contracts, performance management, grievances and termination at the bare minimum. Look around because again some employer associations offer free support for members.
Start documenting your processes, business plan, key knowledge and way of working.
When you start a business, everyone knows how to do everything and it’s almost considered common knowledge. As your business grows you will need to ensure that your ‘recipe’ for the business is understood by everyone that joins your team. If you don’t do this, you’ll find yourself constantly frustrated as team members naturally start to deviate from your vision.
Transitioning a start-up can be daunting. The excitement that comes from having people actually want to buy your product or service is a fantastic feeling. That early elation can quickly turn to overwhelm if you don’t pay attention to your next biggest priority, turning your start-up into a serious business.
Take the time to plan out your transition properly and you’ll be able to enjoy the success of your business as it grows and grows over the coming years, without suffering from the pain of disorganised success.