So you have starting a company on your mind? You are not the only one. More than about 450,000 businesses are started each month in the U.S. according to research from the Kauffman Foundation, with a 409A valuation being administered to set out for employee stock options, etc. but about half of them will fail in their first five years. So how the heck do you build a company that will stand the test of time? I attempt to answer that question in the rest of this article. Stay tuned!
Building Processes
The establishment of business process is critical to emerging from startup madness into a more mature and stable company. It may seem like a lot of work, especially if you have competent people doing their jobs correctly. But it protects your business from unexpected circumstances, like a key team member leaving or sales volume goes up by 5x overnight. Having consistent and formalized institutionalized processes means tasks are not necessarily dependant on any one person and that things can be scaled up or down without your business exploding.
Processes also make it significantly more streamlined when taking on new hires as well, which any expanding startup will intend to do. Making it easier for new employees to understand your work process with formalized processes will aid your newer members to understand what is expected of them quicker because there is a clear and concise process for it. Processes need to implemented, not just related to the workflow, but also other adjacent aspects of the business, like employee well-being for example. Having a regular employee wellness program (visit the EdenHealth home page for more info) can enable everyone to live a healthy, stress-free life which can in turn boost productivity and keep the company going forward.
Developing a Strong Management Team
In the old days of a startup it is natural for founders to try and do as much as they physically can on their own. But as a company grows it becomes basically impossible for one or two people to oversee everything. For instance, if you are running a trucking company, the more vehicles you acquire, managing the drivers, fuel demands, and other business needs might become too much for you to handle by yourself. In such situations, it might be best to consider software solutions and logging systems (like those found at https://www.lytx.com/en-us/fleet-management/dot-compliance/eld) or have a good management team in place, to track personnel and enforce better work discipline.
In addition to that, a growing company has too many departments for one person to keep track of while also focusing on expanding the business. That is why a great management team is so important. A team dedicated to different aspects of facility management could prove vital when it comes to venture expansion. To learn the various functions of facilities management, you could read up various online resources and start building your team! If you think you can do it all and put off developing a management team, your business will not grow, and you will burn out.
Timing is critical though. When you are working from your living room in the pre-revenue stage, the last thing you need is a CFO, COO and CMO. If your revenues are not strong, trying to bring on a full management team could bankrupt your company. Make sure the time is right to bring on a management team.
Promote People from Within While Cultivating a Strong Company Culture
One challenge that many entrepreneurs face is hiring, either they cannot find enough qualified people, or they are not sure whom to hire. Whether that is experienced people or young enthusiastic workers with plenty of potential. A smart solution is to internally develop talent and promote from within. This allows you to hire less experienced and less expensive employees and develop them for the business, which makes them more valuable to you and more loyal to the company.
Profitability
Last but certainly not least, financial discipline, for obvious reasons , is a critical element of the lasting success for any company. Even if you have world-class engineering and design talent, without effective financial controls and expense management you cannot create a profitable venture. Make sure every employee at your company understands the financial side of the business and that managers at every level understand how to maximize profits and cut loses.
To conclude, starting a company is a fantastic venture. It can be exciting and extremely challenging. Making a success story out of every difficulty faced can seem impossible but with the right approach you can build a business that workers will be proud to be a part of. And a company that is growing at a healthy rate to further fund expansion in the future.
