Defining the organizational structure goes a long way in the planning and effective implementation of business policies. A well-organized business can get to market faster with fewer disruptions in service. However, know thy limitations. Even though we may want to control everything around us, sometimes we must defer to those more qualified. This will be especially difficult because we’re placing the realization of our precious ideas in the hands of others! But we have to realize that we can’t do everything ourselves. An entrepreneur must establish and systematize the business organization thereby enabling it to provide service.
Hire a good attorney from inception of an idea. Don’t wait until you get in trouble or need to sue someone! Lawyers can serve as indispensable strategic elements to your business. For instance, a tech-savvy lawyer who has had experience dealing with Internet startups can serve as a valuable advisor in terms of business plan, investor pitching, etc. Also, an experienced securities lawyer can help you set up your equity structure early in the venture. While corporate attorneys can set up well-balanced ownership structures, a big step in gaining the interest of smart VCs. Don’t forget, lawyers “in the know” can serve to introduce you to key potential investors. They should be able to open doors for you, as well as offering aid in funding negotiations, partnership contracts, intellectual property counseling, employee benefits/compensation structures. And, of course, none of this comes cheap-you may even have to offer stock to sweeten your deals. Don’t be stingy; legal counsel is an instrumental element of execution. However, it is crucial that the attorney only provides input on the legal issues not on the business operations. More often than not, I have seen lawyers interfering with the management of the startup resulting in disastrous consequences.
The broadest phase of implementation is resources coordination. While finance and accounting address the money issue, resources coordination deals with the human side of the equation. Most obviously falling into this category is Human Resources. The goal is to create a positive environment. Finding and keeping the right individuals who will work together as a cohesive team and in turn reach the goals and objectives of the startup. Smart, loyal and dedicated employees are critical to the success of a startup.
People are key, but who do we hire, and when? Well, for an eCommerce venture the first round of hiring should include a system architect. Since, Internet products and services offerings are most often broken down into three fundamental layers: database, business, and presentation. Some choose to outsource system architects, but one way or another, this person brings it all together. Other hires should include software engineers, web developers, project managers, etc. Basically the people who can actually launch your business must come next. Follow up with a CFO and an accounting organization. Depending on where you are in terms of money, you may want a corporate strategist and a marketing guru. For round two, focus on maintenance: marketing team, customer support, and system operations team. Also, start your HR department. Round three should be all across the board, and on an as-needed basis.
How do we get all that talent? Time and again proving their worth are headhunters or executive search firms. They have proven capable of finding excellent technical help, as well as key managers. Aside from that, don’t be afraid to go through your friends’ rolodexes. Hire people you know or trust, and don’t wait around for the perfect person. Find smart people and put them to work quickly.
A big issue in the coordination of resources is the question of outsourcing. After all, getting to market quickly can be severely hampered by, among other things, setting aside people to handle web design, tech acquisition, etc. So, a great deal of Internet startups are turning to consulting firms to handle such items. They bring a high degree of specialization of function, as well as the strategic sense to implement that specialization, while allowing your team to concentrate on scaling. But make sure that this firm knows Internet startups, because issues of control and scheduling can come up, and your needs, as an entrepreneur, can be very unique. You must be prepared to spend on these firms; you may even have to offer equity. And once your need for them is over, make sure that a knowledge-transfer plan is in effect so that you understand what they are thinking at all times, especially after launch. Resource coordination usually includes the following subcategories:
- Payroll processing
- Employee benefits programs (medical, dental, 401(k), etc.)
- Recruiting & staffing
- Standard Operating Procedures – Employee handbook, policies & procedures
- Organization Structure
In this section, you have to start thinking about two branches: facilities and finances. First, what arrangement will be most appropriate for your employees? What do they need to get the job done? Where do you want the offices to be? At the same time, how do you want your money managed? Don’t overlook the need for qualified people in charge of finance and accounting. You won’t be able to do everything yourself, like we said before, and the logical reaction to this realization is to put trustworthy, qualified people in charge of things like this. That way, you can focus your attentions on more urgent matters without any worrisome distractions.
Accounting and finance
What sort of accounting solution are you looking for? Do you want a comprehensive system custom built for your business operations or are you ready to utilize off the shelf products. Pay special attention to the following aspects of financial management
- Accounting solution
- Hiring qualified bookkeeper
- Bank account
- Electronic Banking
- Negotiating on office equipment leases
- Cost Management
- Reporting and Analysis
- Business Insurance