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Start Business OperationsStart Business Operations Once you have your business plan completed, your product defined and you have arranged your financing as needed; it’s for you to start business OPERATING. Unlike major Fortune 500 companies, you don’t need twenty different departments to run your business, but you do need a little structure and discipline to be successful. The main areas most new businesses focus on for start business operations are: 1. Accounting and Payroll 1.Start Business Operations:
The first area I generally set up to start business operations is Accounting, Payroll and Banking. Why? Because setting these areas up allows me to have everything in place to manage the costs and revenues on my business plan, and not have anything fall through the cracks. I’m going to do an entire, separate page on setting up your Accounting. Many people outsource this task to an Accounting Firm but with software programs like QUICKBOOKS you can save a lot of MONEY and aggravation doing it yourself. You know your business the best and getting it set up correctly will HELP you manage it.
2. Start Business Operations: Legal
Legal is always a difficult area for me. Lawyers, particularly good ones, are EXPENSIVE! But bad legal advice can be even more expensive. I generally try to have an attorney in my network of associates for a business. Many times you know someone, who knows someone, who knows an attorney. I use small, local law firms for straight forward contracts and setting up the corporation etc. If I get a major contract (selling the magazine as an example) or have a major litigation problem I go the BEST and BUSIEST attorney I can find. Go to the best because you’re MUCH more likely to win with a good attorney, and go to the busiest because then, assuming I convince them to take my case, they don’t charge me as much because they have LIMITED hours they work on your case because of other commitments. From my own experience I advise that you not to allow your attorney to hand your case off to a junior attorney, they charge almost as much and they can be HORRIBLE. It happened to me. The junior attorney was so bad it was if she was representing the other side. I’ve been involved with companies that SPENT tens of thousands of dollars on attorney fees and got little, if any benefit. Most large law firms only know one thing, BILLING, and they’ll convince you EVERYTHING is a huge liability risk. Don’t let them hoodwink you, try to minimize what you spend, but try to have a good attorney lined up just in case you need it.
3. Start Business Operations: Sales & Marketing (includes website) For most new companies this is a key operational area. Spend as much time in this area as you can. Figure out your best sales strategies and messages, and then hire experts to package your marketing materials and website into ONE cohesive look and feel. Spending time on this early will avoid re-doing it later. DON’T let your computer people do your website. Your website is a relatively inexpensive way to create your brand awareness. If you do it well once, it can last a long time. Also, work to set your sales messages and tactics as quickly as possible. It may take you a year or more to truly hone in on your best sales messages, but starting early and staying involved is critical. No one knows as much as you do about your product. Hiring a sales person is a good idea if you can afford it, but they must be GIVEN your sales messages. You may want to brainstorm with them to create the messages, but you’re the expert on the best approach. Deanna at DK Design’s knows her customer and her product. She is the BEST person to help define the sales messages necessary to sell her product. She custom designs her jewelry and KNOWS the quality and beauty of her products. Some else may focus more on pricing and really damage the brand if Deanna doesn’t stay close to marketing. You must stay closely involved in the sale message definition to keep the company on the right track!
4. Start Business Operations: My only message in this area is DON’T OVER SPEND! Spend the minimum. Buy used or refurbished equipment to start with. Try to make due with what you already have. This area of the business is a huge profit drain if you’re not careful. When we ran the publishing business we did the entire magazine and website layout and design in-house. We also NEVER bought a new computer. The latest and greatest always costs three times more than last year’s model. There are also used furniture stores and flee markets where you can pick up office furniture inexpensively. Once you make your first year’s profit and you know you’re going to be in business, then start spending more in this area. Business profits are so rare and so precious, so why give your profit away to someone else?! One last tip… NEVER build custom software or a custom website. You can purchase pre-canned software for a fraction of the price. Spending $10,000 for a software package is too much and you can likely find the same function in a MUCH cheaper package. When we ran the magazine business we used list software to manage our subscriptions and had no issues. The list software had a total cost of $600. I have friend who purchased $20,000 MAGAZINE list software and he has nothing but trouble with it and it does less function!
5. Start Business Operations: Customer Service/Administration
Step one, answer the phone! This sounds obvious but it isn’t. Many new businesses don’t answer the phone and it’s one of my pet peeves. How can you expect anyone to want to become your customer if you don’t answer the phone when they call? How many times have you gotten caught up on an endless automatic answering service loop? Press one for customer service…press two if you think we really care… Hiring a good administrative/customer service person is probably money very well spent. Make sure messages are handled well and you get back to people ASAP! Overtime that goodwill will be extremely valuable!
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