World Colleges Information

Getting out of B-school and into entrepreneurship is great. Although it is a terrific idea to go flying on one’s own, the route to entrepreneurship is different and needs not just a great idea and business plan, but also some early policy making skills and, wrapping the mind tightly around those policies. For a start-up there’s nothing like a great idea and a well-laid business plan but the run can get dangerous on mul-tiple counts if one does not understand or commit to the basics.

The top blunders start-ups make are:

Wrong co-founder

Picking a co-founder is first in the list of ‘make no mistake about it’. The founder partner of choice has to share your vision, go, commitment and bring to the table complementary skills. The ‘purpose’ of the business and alignment of values need to be ‘shared vision’ for all partners concerned. The best co-founder is one that invests financially, physicallyand mentally in the idea. Founder partners need to be able to inspire each other even if so in competitive spirit. Picking a wrong partner can be fatal to busi-ness. Ignoring misaligned goals is the other fatality. Address issues and align on goals at the earliest.
 
Same is the thing with allowing minority stake-holders into your business. When times are tight, it would be tempting to invite people to own small por-tions of your business in return for the funding. But this could prove to be a big mistake in the long run.

Every business decision will need their vetting, they can dampen the spirit of the business by trampling on some good ideas or timing. They can also become a burden in the long run by unnecessarily delaying things in favour of their personal agenda. To get them

off your back will mean hours of meetings, legal fees, paperwork and general haranguing that will not be worth what they originally brought in to the business.

While co-founders are great fillers for personal weak-spots, going it alone is preferable if you do not have people who share your vision. Have a pack of mentors whom you can turn to when in trouble if you are deciding to go it alone.
 

Not establishing a culture: Not having an estab-lished culture can leave your clients confused and you lost. Your people cannot send mixed signals to your clients and customers. Such organisations face the danger of being termed unprofessional and un-organised. Have very clear idea of what you want the culture of your company to be. How do you want people to see you and remember you? What behav-iour is acceptable to you or not acceptable to you? Most start-ups either suit up or go completely obtuse by being informal. You can be either but you need to define what you will stand for. Your attitude by prod-uct/service offering can be formal, fun, easy going, arrogant or snobbish. For example, IBM is formal, Google is fun, Apple is snobbish. The question is, what do you want as your label? While you pick your label, remember both clients and your future employ-ees value you by it. Ensure that the culture stays and speaks from everything you do.

Disregarding formality

 Whether between partners or, the business and its customers, every arrangement and agreement needsto be formalised. Drawing up a legal framework / agreement is the best way forward. It is a safety net in case things go wrong. Drawing up a formal agree-ment might look anything from frivolous and gran-diose when you have just one client to start with or only one trusted partner in business, but that is the only way to ensure that everything is fair and square to all parties concerned. It is the also the only way to ensure that you will get paid by the customer once the job is done. Issues of trust, honesty, commitment, deliverables and working terms can never be tackled without a written document.

Misplaced personal stake

Every business owner should have a personal stake in the business. It fires ambition, keeps the mind

active and puts the person on track primarily out of fear of losing one’s life’s investment. Personal stake is not commitment or take-home alone. No matter how many investors you have in your business, hav-ing a personal stake adds to your responsibility. That said, one should never invest all of one’s life’s sav-ings in to a business. The interests of your home and family need to be protected and has to be the first and foremost priority.

Ignoring Systems and Processes

No matter how small the start, devise systems and processes that are be followed. As the compa-ny grows, you will find that work moves smoothly because of the controls you put in place initially. You can always tweak the controls once the basics are in place. Operating without a defined protocol or process will allow mistakes to creep in to your way of working and make way for habits to form which can become very difficult to change when situation demands. It can also lead to missing deadlines and loss of revenue. If paperwork has to be filled in before work can start, so be it. If signatures need to be pro-cured before kicking off, so be it. Never compromise on the ground rules. Never ignore your process. Youmay pay a heavy price otherwise in the long run in-cluding loss of the account/revenue stream.

Incorrect market identification

Businesses exist for a reason – the market. Because businesses are the result of ideas people are passion-ate about, there is a possibility that one’s passion may not be market reality. An in depth understanding of the market and customer profiling is mandatory for any business. Investing in market study will be the best investment a start-up can do prior to starting up. Also important is understanding competition, how they are placed and what/whom they cater to.
 
Adapting: Start-ups usually being small have the advantage of adaptability in the face of oppor-tunity which established large firms don’t and can’t. Timing is everything, especially for a start-up. Be ready to bounce when there is an opportunity. Others will take time to play catch up. By then you could get to wherever you had planned to be.

Customer-centricity: Another key to success is staying in touch with the customer. In their excite-ment about the product/service, start-ups lose sight of the customer. Hustle everything you can from the customer time and again to deliver improvised products, services or promises.

BUDDING MANAGERS

APRIL 2014 ISSUE