Your Fundamentals, Business Model, and Founder SWOT analysis are complete. You’ve confronted your fears, and you know how you want to proceed. It’s time to consider the next steps on your journey.
The Fundamentals are clear. Every decision you’ve made supports them:
- Your Vision
- The Problem
- Your Solution
- The Mission
- Your Objectives (near and long term)
The Preliminary Business Model defines how you want your business to operate, grow, and compete. It’s unique because it reflects your unique approach.
The Personal SWOT analysis wasn’t easy. You put your ego aside and honestly accessed your weaknesses and threats. By doing so, you’ve confronted your fears and have a clear view of what you need to start your company. Everything connects. Each of your decisions supports your objectives. Congratulate yourself; you now have more than an idea. Most first-time entrepreneurs never get this far.
You now have the tools to define your Founder’s Action Plan, which you’ll use as an overlay while developing your company’s detailed Business Plan.
You Need an Orchestra
Consider this analogy:
You have a tune in your head that you can’t forget.
It’s uniquely yours, not something you heard during your commute. You can’t let it go because you know it could be a hit, that a specific audience will relate to it and buy. You’ve hummed it to your friends – they liked it. If only you knew anything about music, how to compose, write, or even play an instrument.
You looked for someone that could compose the notes while listening as you hummed. The composer did her best to interpret what she heard, but it’s not quite there. You worked with her to adjust the notes, tempo, and key until it reflected a simplified version of the music in your head.
The simplistic version is a start, but it’s missing depth; you need additional musicians and instruments. You need an orchestra.
Working with your composer, you added additional elements for the various instruments needed. It’s starting to make more sense now.
Here is where it gets difficult. An orchestral conductor guides his musicians to play what he thinks the composer meant 200 years ago. He’s overlaid his interpretations of someone else’s music. The problem is that you’re still alive. You want the audience to hear your music, not what an outside conductor thought you had in mind. When you hear your music, you recognize the tune, but it doesn’t convey what you intended your target audience to hear. Now what?
You have to conduct it; convey your vision, compassion, energy, and mood to each musician so that they play your music, not just the notes.
Craft your Founder’s Action Plan
The Fundamentals, combined with the Business Model, comprise the basic tune. The Personal SWOT analysis allowed you to determine what else you needed. Together they form the foundation used to develop your Business Plan and build your organization.
Start with your Founder Opportunities – why you started your journey. Connect your opportunities, fundamentals, and first-year objectives. Are they consistent? Does your Business Model support them? If not, rethink them, refine them. To be effective, they have to connect.
Do the same with your Strengths. Do any of them support your objectives? Do they connect? If so, how do you intend to capitalize on them?
What about your Threats? Are they related to your founder’s objectives, or are they general business threats? How relevant are they to your first-year objectives? If they are relevant, what is your approach be to mitigating them?
For each of these, you usually have five options:
- Handle it yourself
- Add a Co-founder
- Retain an Advisor
- Outsource the function
- Hire someone
The key is keeping the organization lean and focused on growth. Now is not the time to start piling up fixed costs.
If you have the necessary technical or marketing skills, use them.
As you grow, you’ll add to your organization, allowing you to scale, but for now, don’t abandon your skills and strengths.
You can’t avoid being a good communicator. You might be a world-renowned technical expert in your industry. Still, if you can’t effectively communicate and motivate potential partners, future hires, existing employees, or potential investors, you have a problem.
Finding the right co-founder can be a huge benefit for you and also provide comfort to potential investors. Experienced investors know it takes a team. Tying up with a co-founder is a lot like getting married. You’ll be working closely with this person for several years. Things will get tough. You can’t afford personality conflicts. Your co-founder has to believe in your dream and have skin in the game. A co-founder has to see what you see and be willing to bet on a future with you.
Merely knowing someone doesn’t qualify them as an ideal co-founder any more than being a former classmate, coworker, tennis partner, or family member does. You’ve already identified what is needed to succeed. Fill the need. If you are a marketing expert, bringing on another marketing expert makes little sense.
Often, hiring an advisor or forming an advisory board makes sense. The right advisor is highly experienced, has built, grown, or managed a company, and has assembled a strong network of other business and technical experts.
Outsource everything you can that isn’t a key driver of growth.
As you grow, you can bring some of these functions in-house, but for now, they are better handled by an outside professional allowing you and your team to stay focused.
Finance and Accounting, Legal, and Human Resources (payroll and insurance) are all essential but can be easily outsourced. Find firms that are have worked with startups and let them do their job.
In some cases, you can even outsource technology development.
If your plan relies on a web platform or mobile app, you’ll have lots of options from web designers, e-commerce developers, and app builders.
If marketing is a critical element of your program, you should consider forming a relationship with a marketing agency that has developed and run successful campaigns in your industry. Trends and buying habits change. They are in a better position to anticipate them.
Many of these decisions can be made now. Others, you’ll want to hold off until you have your detailed Business Plan in hand. Expect to rethink some of these decisions based on better information as your plan develops. Your plan is never final. It is always a work in progress. As you grow, market dynamics change, technology evolves, and competition grows. Don’t wait until you have all the answers. Time is not on your side.
In the next installment, I’ll talk about Founder Communications. You are the voice of your company. Employees, customers, vendors, and potential investors will be listening closely. If you solve a large problem with an excellent product, coupled with a viable business model, a well-developed Business Plan, and a team that can execute, you are halfway to getting funded. If you can’t effectively communicate that you meet all five requirements, you won’t.