- Business and Employment
Startup Checklist For Avoiding Business Fails
You have completed the business plan for your intended startup.
You have assembled the best partners in the world. You also have a supportive family and many encouraging friends. And a long list of potential clients.
Formula for success?
Theoretically. Or should I say, half-theoretically. Every startup business plan I've ever read focused on the plus side of things. You know, how "we would earn $ ... ... revenue per year" or "our projected sales is ... ... (million) units." Every aspiring entrepreneur I've ever spoken to also bragged about supportive friends, valuable business contacts. Etc. What is never talked about though, is the background work needed to facilitate business. In other words, the nitty-gritty, mundane, boring stuff. This is tragic. Because often, the failure of these background processes leads to business doom. Yes, profitable business requires vision and foresight, but efficiency and organisation are also key components for success. If not, it is just speculation. A wild grasp for a high target, without the engine for it.
Here are 10 things startups must never ignore. For their own sake.
1. A Functioning Accounting or Bookkeeping System
Bottom-line, business is about making money. What can be more important than the engine that manages your money? On the day you commence operations, you should at least have the bare skeleton in place. This should include:
- A filing system for all your bills and forms
- An invoicing system, including delivery proofs, statements, etc.
- A scheduled and systematic process of paying your suppliers and staff
- A record system to keep tabs on who HAS NOT paid you
Why do you need your bookkeeping system to be functional the day you commence operations? Because money is exceptionally precious to startup. You do not want and do not need the following to happen:
- Invoicing is delayed, because you have yet to do your invoice template
- You discourage others from paying you, because you keep sending them incomplete invoices, multiple copies of the same invoice, etc
- You lose the faith of your staff and suppliers because you keep forgetting to pay them
- Good lord! You double/triple paid someone!
In short, ensure the flow of your money is systematic and easy to supervise. There is really no excuse not to do so. And there are tons of software available to make the task easier for you.
2. Your Bank Account
(I'm not going to debate the necessity of having a corporate business account. All I would say is, in my work, I've encountered a good number of companies that are unwilling to pay to a supplier's personal bank account. It all depends on the client.)
Whether you set up a corporate account or use your personal one, milk the current technologies offered. Be it Internet Banking or Phone Banking, familiarise yourself with the ways to readily check your account. You could be doing this often, such as during trying months.
At the same time, consolidate all information relating to your account and put that on record. This would not just be your account number and name, but also things like the bank code, branch code, and swift code. Life in a startup is hectic. You will never have enough time. You don't want to waste half an hour on the phone finding out your bank code, just in order to receive a client's remittance.
Most important of all, know your bank charges. Where I'm from, they tend to be quite tolerable. But I have met business owners from other countries who told me bank charges in their countries could run into hundreds of dollars. You seriously do not want the case of a payment perpetually stalled, because the client is appalled by the bank fees involved. Neither do you want that shock at the end of your first year, when you discover you have paid $xxxx in bank fees. Always have the latest list of fees charged by your bank with you. Refer to it often.
3. Ready Your Corporate Identity
I'm sure some entrepreneurs would consider this a breeze nowadays. You could even get a new logo designed online, within hours. What's the big deal?
Again, it is because your resources as a startup are limited. Your time is your most valuable asset. You want to focus on building business relationships, getting that million dollar deal. Not laying out a letterhead or waiting for a logo so that you could prepare that quotation. In fact, it being so easy to create artwork nowadays, all the more reason these should have been done before operations begin. To not do so is plain sloppiness.
One more thing. Do not lose those artwork files. To not be able to start on your proposal because you can't find your logo.jpg, or to have to pay the printer extra to redraw your logo each time you print something, that is seriously ... ...
4. Ready Your Marketing Collateral
This can be difficult, I know. A brand new startup, what is there to show? You have no testimonials. You have limited products or services, or samples. How would you be un-impressing your potential client by showing a brochure with barely fifty words?
Yet, you still need to show something.
Start by having at least a proper company profile. A sensibly written one. Prepare also a standard list of your products and services. A functional one that you can update readily. If you want to bring it a step further, establish a schedule for churning out updated collateral. What you want to avoid is that horrid situation of you staring at a potential deal in the face, but unable to work for a deal because you have no means of introducing yourself. Avoid that by preparing beforehand. Be empowered by everything you can realistically generate before entering business.
5. Staff Claims Procedure
I pulled this out from (1) because of a strange experience I had in my company. During an exit interview, a lady stated she's leaving because the company did not reimburse her taxi expenditures within twenty four hours. IN CASH.
I have also heard from friends about staff caught taking from the petty cash pot. When confronted, those staff claimed they thought it was the way to be reimbursed for company expenditures.
People can be strange. They get weirder when money is involved. Having a proper staff claims procedure, with a form and the need for backing documents like receipts, saves you headaches in many ways. It prevents skulduggery. It gives your staff peace of mind by assuring them you do not expect them to spend on behalf of the company. Most of all, it reinforces the impression that you are a "legit," professional setup. Such an impression is crucial for your overall growth. It is also a key to attracting high calibre staff.
6. Prepare Copies of Your Company Registration Documents
In my country, the most basic of these is a standard computer printout. For other countries, it might get more complicated. But my guess is that it wouldn't be anything more than a stack of papers.
Why should you have this on hand? Because everybody would be asking for it at the beginning. Banks, government bodies, trade organisations, etc. They are especially crucial if you are applying for grants. Again, the underlying purpose here is time management. These things aren't hard to get copies of, it just requires time. Sometimes, the process is also roundabout and lengthy. Having spare copies of them around thus never hurts. That is, unless they cost massively to be duplicated. In which case, you can still prepare yourself by at least knowing the procedure to request for copies.
7. Compile A List Of (Potential) Suppliers
One of the most exasperating reasons for missing a project is to not be able to find a supplier. Or find a supplier in time.
If you have a proper business plan, then you should be able to forecast the suppliers you require. Establish contact beforehand. Do not leave the searching or the contacting till you are actually quoting for a project. Take note though, I do not mean that you should go about requesting tens of quotations from strangers and filing these away religiously. That plummets goodwill towards you like nothing else could. Find a tactful way. A phone call, or an email. If these parties are comfortable, request for some sample prices. Might I add that while doing these, be humble. Do not act as the next big guru of the business world. If these establishments are older than yours, chances are they have encountered loads of startups that fizzled. Always respect them as your potential partners. Nothing lesser.
8. Have Some Sort Of Customer Management System
You could get very sophisticated with this. Or it could be nothing more than a simple system to keep track of existing clients and potential ones, inclusive of a schedule for regular contact. (The latter being a festive greeting, a call up, a mailed brochure, etc)
The short of it, you're not going to grow if you do not have repeat or recurring clients. You want to work towards that ideal of clients returning to you by themselves, without excessive persuasion. The key to this is to be regular. Maintain light but consistent contact. Over time, this adds to your image too; you're not that person who only calls when you badly need business. Work out an easy, functional method for you to maintain consistent contact with your clients. Something that wouldn't be too much of a hassle over time. Obviously, ensure that "consistent" doesn't evolve into being persistent. You don't want to be labelled a pest.
9. Compile Templates of Business Letters, Contracts, Employment Agreements, Etc
Whatever the nature of your business, you would require all types of professional document. Some of these could be expensive, such as when you need a professional to draft them.
Wait. Some of them are no longer costly. In fact, they are free.
Thanks to the Internet, there are all sorts of free templates for you to download. A note here. Download, but have the sense to customise the templates. Ensure you fully understand the document you are using too. It is humiliating if your staff or supplier knows more about the document than you, and points out you are the one not reading the finer print. You could end up in legal trouble too. Expensive legal trouble.
Yes, you are ready to start a business. But are you ready to operate a business? To sustain a business? To grow a business?
A stringent accounting/bookkeeping system, a perfect customer management software, all the documents and collateral you require prepared and waiting. But are YOU ready? Are you able to keep to your own systems? Your own schedules? Your own procedures?
Are you able to make the sacrifices in family life, social life, health and leisure to give your startup the attention it requires? Are you ready for the phenomenal amount of work necessary to keep your startup afloat, and to eventually make it profitable? Most of all, do you have the resilience for downturns, which are inevitable? Can you weather failure, humiliation and abandonment, in the long route towards business success?
Is your passion real? Or just a romantic notion for the moment.
To put it in another way, you are the one who needs the most preparation. The crucial one to check again and again, before business begins.
I leave you with this short video by the legendary Steve Jobs. If you do have the sort of passion he mentioned, then go for it. Do your checks, bring all the things you require, and thus begin your long, long journey.