Start-up as you mean to go on

To paraphrase Matthew 7:24-27…

24 “Therefore everyone who hears these words of mine and puts them into practice is like a wise entrepreneur who built his business on the rock. 25 The depression came along, the costs rose, and the economic winds blew and beat against that company; yet it did not fail, because it had its foundation on the rock. 26 But everyone who hears these words of mine and does not put them into practice is like a foolish entrepreneur who built his business on sand. 27 The depression came along, the costs rose, and the economic winds blew and beat against that company, and it failed with a great crash.”

FoundationsHow well you lay down the original structures in your start-up can have a significant effect on how it weathers future challenges. The founding team needs to put in place financial processes to conserve cash and monitor profits, human resource processes to recruit the best and retain the skills, marketing processes to spread the word and excite customers, sales processes to clinch deals and generate revenues, and research, development and production to deliver on time and on spec.

All of this whilst scaling-up and coping with the pains of growing.

To again paraphrase Matthew, this time 13:3-8…

Then he told them many things in parables, saying: “Entrepreneurs went out to grow their businesses. As they were scattering their seed, some fell along the path, and the debts came and swallowed them up. Some fell on rocky places, where they did not have sufficient capital. They sprang up quickly, because the capital was shallow. But when the sun came up, the businesses were scorched, and they withered because they had no root. Other seed fell among competitors, which grew up and choked the businesses. Still other seed fell on good ground, where they produced a profit—a hundred, sixty or thirty times what was invested.”

SeedlingGet the initial stages of your start-up right, and survival is much more likely.  Your business will be able to react to the changing environment and take full advantage of opportunities as they come along. You want a well oiled machine in the background where all your staff understand the vision and are motivated to pull in the same direction. New staff can jump on board and join in the effort. Internally, information is shared and accessible, so that lessons learnt are quickly passed along to avoid failings next time around.

Systems are in place to keep the business organised, secure, and compliant.

Then, if and when an investor is needed, their due diligence will be quick and un-distracting from the task at hand which is to keeping growing and winning more business.

Finally, when an acquirer circles, they’ll see a strong viable enterprise that they will want to buy and take to the next stage:  “like a merchant seeking beautiful pearls, who, when he had found one pearl of great price, went and sold all that he had and bought it…”

Start to Exit is due to be published in 2017.

Icon images from https://thenounproject.com/lastspark/ and https://thenounproject.com/gsnair88/ (Creative Commons)

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