Tips for Creating the Vital Infrastructure of Your Startup￼
You have always been the ambitious sort and have dreamed of dominating the business world with your innovations. You have read every book on entrepreneurship that you can get your hands on, and you have been analyzing your industry, seeing its weaknesses and creating solutions. You have a killer product and are ready to unleash your inner CEO by starting your own company. Now, however, as you sit at your kitchen table, surrounded by a mountain of paper, you feel the first glimmers of uncertainty. Just how do you get started? How do you create a real company, one with the infrastructure to support you, your employees, and your product as it grows? While starting and running a new business is complex, there are a few things you can do ahead of time to make it a little easier.
Step 1: Envision Where You Want to Go, Not Necessarily Where You Are.
Many startups fail because they grow too rapidly, but that does not mean you should not plan for growth. A good exercise is to get a whiteboard or something similar and divide it into the first five years of your company. Then write at the top of each section the profits that you would like to make for that year. Try to balance realism with ambition so that you push yourself and your company without setting yourself up to fail or even underachieve.
Step 2: Dig Into the Nitty Gritty of Those Potential Profits.
Once you are done, it is time to get real about what it will take to make those profits, both in terms of how much of your product you will have to sell as well as all of the expenses that can subtract from them.
By this time, you will have already learned how much it will take to manufacture your product and have created a price that will allow you to make a specific profit. With that in mind, for each year, write down the number of products you will have to sell to make your profits. These figures will be vital to your projections for the first five years of your business.
Are you done? Not yet. Nothing exists in a vacuum – as your profits go up, so, too, will your expenses. This is where your ability to foresee your company’s road will be very important.
Step 3: Predict What and Who You Will Need In Order to Make Those Profits.
If your profit projections can be met by just one person, then you won’t need to hire anyone. If, however, you will need employees, that is when looking into the future can help you with setting up your infrastructure.
As you examine your sales and profit goals for each year, be realistic about the number of people you will need. Where will you cross over to needing extra help? Draw a red line between those years and start brainstorming everything you will have to do to support those employees.
This could encompass many things, including HR, medical insurance, training, days off, vacation time, and extra computers. Don’t censor yourself here – the more you can predict what is coming, the more easily you will make that transition when the time comes.
Remember to include prices of the equipment, anticipated salaries, and cost of training. Anything that has a price and could cut into your profit goals, remember to write it down.
Subtract those expenses from your projected yearly Profits so that you can have a realistic idea of what your business can earn.
Step 5: Put Everything Into an Organized Document That Can Easily Be Accessed and Reviewed.
You have done a lot of hard work to envision a realistic path for your business and to see what you will need in order to make your profit goals. Put this document somewhere safe and make a point of taking it out at least once a month to review it and make changes. As your business grows, you will refer to this often to be sure that you are on track to accomplishing your profit goals.
As you know, a solid infrastructure for your company can help you to achieve the growth you dream of and lead to your business’ financial success. Being able to look down the road, envision what is coming, and know what will be needed to surmount it will factor heavily into the achievement of your entrepreneurial goals.