NCET Biz Tips: How to Start a Business: Part 5 – Description of Management and Organization

by Peter Williamson, Business Coach and Certified Exit Planner

A quick recap on our progress toward starting your business: You’ve covered Company Description, Market Analysis and Competitive Analysis.  Well done! 

Now it’s time to think about Management and Organization.  One of the key things here is to first think through HOW you will deliver your product or service. 

What will the overall process look like?  What I mean is:  How will people find / evaluate / select / acquire your offering?  For example, suppose it’s a:

  • Major project / service offering that requires competitive bidding, has long sales cycles and low volume/high dollars per transaction, or

  • Low price, high volume consumer product that you want to sell through distribution, or

  • Business to consumer service where you want to build a subscription base, or

  • High priced, high margin technology project with a significant ongoing service component

Clearly, the process you would use to run a business for each of the above is very different.  Start with an idea about how you would like your process to work.  Map out the process flow at a high level – e.g., you don’t need to know what accounting system you are going to pick.  But – you do need to have a start at thinking about how you will market, sell, process orders, deliver and collect money. 

Once you have this picture, then you can start to think about management and organization.  The goal is to make sure the organization will support the process.  Some key questions to address include:

  • What are the critical roles in the process?  How many are there?

  • What level of skills do they require?

  • What level of training and/or knowledge do they require?

  • How many of the roles & skills are you an expert at?  Where are your gaps?

There are some key mistakes to avoid here.  Number one is making hiring commitments without knowing your process, the roles needed to support it and the target size of your organization.  Doing so leads to the wrong people in key places, employees who don’t know what to do and / or employees who aren’t qualified.

Once you have the process and the roles, you can lay out the organization.  Now you have to test your plan against reality – how much will it cost?  Can you hire the team you need?  Does the model work as you transition from startup to going concern?

Finally, and perhaps most importantly – what will YOU do?  As the founder(s), you are by definition the leadership and you will need to lead or learn to lead, quickly.  You will undoubtedly wear several hats at least initially.  That said, be careful about having too many aspects of the business dependent on you – look at how you can leverage your organization and management to help you.   That’s the goal!

Please join us next month as we look at how to breakdown your products and services.

Peter Williamson is a Business Coach peterwilliamson.actioncoach.com and Certified Exit Planner (CExP) www.sierrasuccessionadvisors.com,  and NCET’s co-VP of Tech Wednesday.  NCET is a member-supported nonprofit organization that helps people explore business and technology. (www.NCET.org)

Maren Rush