How many times have you had an idea for a product or service that you feel would be an ideal candidate for a startup business? It turns out that many great business ideas are not acted on by those that thought of them initially. Often it is only later that an entrepreneurial person thinks or hears of the same thing or something similar and decides to take on the challenge of forming a business centered on the product or service. Beyond the initial idea there are many steps along the path to success. Most of these steps should be obvious to those who have been associated with businesses either as an owner, employee or investor. You should always plan to succeed but be prepared for the unexpected roadblocks that you may not of planned for.
For a business that is ultimately going to sell a product the product needs to be available to sell. This could be someone else’s product and you would be selling it under a distribution agreement. It could be a product utilizing some technology you have a patent or license on. There obviously are many variations on this theme. Likewise a service-oriented business needs to have a service to sell. This could be something you license or provide through a franchise or it could be a service you develop yourself.
The purpose of this article is not to provide a plan covering the steps on how to start a business. This can be found many places online and in books or through organizations. The goal here is to tell you what I feel is one very important key towards succeeding in your startup business.
What is this key? Where do I get it? How much does it cost? By way of disclaimers first let me say you should not ignore the many points that are covered in most books on startup businesses. Beyond the idea, the breadboard product, the service protocol you must have an operating plan. This will outline your business, your sales goals, your marketing plan, your financial requirements, your management team, and so on. Since it is likely you will need this plan when looking for funding you should make sure it’s a living document which you keep up to date at all time. In some businesses you will have to have a team of people, equipment, and facilities in place. Depending on the business you may need various blueprints, test procedures, control documents, and test documents in place before the first unit is shipped. Behind the scenes purchasing, fiscal, marketing, sales, factory, shipping may also be needed.
Ok you nod. As an experienced businessperson you already are aware of these things. The concept I feel you need to consider is simply stated, ‘Plan for the unplanned’. Let me explain this bold statement. In any business there are many things that must be planned. The tendency is to plan things like inventory levels, raw materials, service teams, order takers, etc. all based on the business operating as an orderly entity. The problem though is what happens when a key person on an installation team takes a job elsewhere, when a vendor falls behind on delivering raw materials that you need for your product, when your assembly space you rent gets sold to another company, when the raw ingredients in your secret recipe no longer produce the same results and so on.
Think of it another way. Your plan should ‘Expect the Unexpected’. Starting to get the idea? Simply stated either on your own or in a brainstorming group put together a document that contains a list of all the things that might conceivably go wrong that would keep you from getting product or services to the customer when promised. Besides quality issues one of the most devastating things for a startup business is not to be able to deliver a product or service when you promised it. Your unhappy customer will associate a delayed delivery with your company even if it is due to a vendor delaying a delivery to you thus it is your problem in the eyes of the customer not your raw material vendors. Your customer doesn’t want to hear excuses. If you can’t deliver something when you promised they will think twice about ordering from you the next time.
The goal of planning for the unplanned is to identify the possible problems your startup business may encounter and rank them according to likelihood. The next step is a challenge since you should do through the list and document starting with the most likely to occur, how you will deal with it should it occur. Not only deal with it but recover from it so your customer barely notices a glitch in the service your provide. To accomplish this you may have to spend some money, stock some inventory, and have backup plans in place. It will be worth it since in a business recoveries have to be accomplished on the fly since you can’t afford to shut down the business to take care of an unexpected problem.
While you don’t need to be paranoid about it you should plan and be prepared since in the long run it will make recovery from problems much less traumatic and will help you succeed in your startup business.