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A critical aspect of
starting a new business which the report focuses on is the Execution
Phase. This phase is the beginning of
the onset of the implementation of the
Growth Strategic Business
Plan, hence the business is effectively put into a dynamic
state: Relative to the starting phase when the business is in
essence in an inertial state, starting operations the business gets
to be put into a dynamic state. This is the phase in which most
businesses fail.
This phase of any
business development is the bridge between a static business
existing just on paper and one that is actually operating. The
execution phase in essence then is a dynamic non-equilibrium
state of a business. The thorough and conceptual understanding of
the differences between these two dynamic states of a business life
is crucial to the successful start-up and survival of any business.
This task is quite difficult because all the business processes as
defined in the Growth Tactical Business Plan are being gradually
started and supported on daily bases while still be changed daily as
well - the processes as developed in the Growth Tactics
Implementation Business Plan are generally designed to be evolving
due to the dynamic non-equilibrium state of this phase.
The often improper planning
of this phase
business start-up and the resulting
poor execution is the cause of the failure of most businesses.
Approaches to effectuating and managing this dynamic evolution of
the business are proffered based on sound business analysis and
management principles. Though often not paid great
attention in the founding of corporation, but nonetheless extremely
important are the four subtasks:
- Undertaking of
marketing blitz;
-
Creating repeat customers,
-
Employment of the Key and
Critical Staff
- Corporate Financial
System installation
and the failure to
implement these subtasks with the urgency that they require are
often the cause of many business failures as well. This Phase is the
most critical phase of the business development planning of any
business, given the general focus on establishing the
critical mass of business survival by implementation of the
subtasks.
The approach adopted for the
development or creating of the venture critical mass is very crucial
to the success or failure of the business. Two main approaches are
often adopted for this goal: Begin with critical mass functions and
undertake marketing blitz to support the critical mass state, Evolve
incrementally into critical mass while matching the scope of
operation with the state of market participation derivative of the
marketing blitz. Of course, these two approaches have two different
cost factors, which directly or indirectly impact the success as
well of the business owner in being able to attain critical mass
state of operation.
The approach of having
the critical mass operations active while undertaking marketing
blitz to drive sales to support is perhaps the most effective
approach, but also relatively the more costly one. By this approach,
the
Growth
Tactics Implementation Plan is actually being followed from the
get go, beginning with the hiring of the
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production staff, the marketing and sales staff,
administrative staff, and the management staff. The facilities to
house these staff as well as the support functional tools by which
the staff perform their duties must all be procured and be set in
place as the staff begins work. Then, the management who are likely
to be familiar with the processes for each of their departments must
then undertake the task of training the employees.
The approach of having to
build the operations incrementally while undertaking marketing blitz
is the more cost-effective approach but also the slowest and most
tedious approach to evolving the business. One of the limitations of
this approach is that the staff appropriately qualified to to fill
positions needed to filled are not always easy to find when they are
most needed, and as a result less, sometime less qualified people
are hired to support an operation that need to be started when it
must be started.
Finally, the entrepreneur must
ensure that the undertaking of Marketing blitz is the overriding
task of almost everybody in the initial days of the operations
start-up. This need for preoccupation with marketing is buttressed
by the time-recognized fact that all business is marketing and
failing to undertake marketing aggressively is a certain invitation
to corporate demise. Hence, the entrepreneur must ensure that the
marketing operations are being performed timely, in accordance with
the Market Entry Schedules and Market Penetration Schedules as
documented in the
Growth Tactics Implementation Plan. This need for consistency with the
Plan can not be over emphasized given that the
Pro Forma or
Projected Financial Statements - that obtained from the Growth
Tactics Implementation Plan - attests to the viability of the
corporation based only the consistently precise execution of all
performance schedules of the Plan.
Getting onboard the
initial group of dedicated employees is by far the most difficult of
the tasks. Very often and usually those who get employed by start-up
companies do not stay long out of fear of the instability that
attends such companies. Hence, there is often a revolving door for
employee for a while before gelling begins. Salaries are paid and
other expenses therefore are incurred towards staff that do not stay
long enough for the corporation to benefit from the training given
to them. As such atimes entrepreneurs have the tendency to hire
employees who have been dismissed at their last jobs or
otherwise deficient hoping that such staff will stay, out of a sense
of gratitude, however, this may not necessarily hold either, and so
trial and error, and acceptance have to be adopted by the
entrepreneur towards the employment of the start-up staff. Even
then, the entrepreneur must not show too much leniency towards a
non-performing employee out of concern for the difficulty in finding
and attracting capable employees. The rule is work with the ones who
show good work ethics and rapidly dismiss the ones that do not show
good work ethics. The keyword here is ethics and not idiosyncrasy, a
good manager and therefore an entrepreneur must learn to accommodate
the idiosyncrasy of employees with good work ethics and then wane
such into the practices of the corporation.
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The second aspect of founding the
venture corporation which is equally critical to the survival of the
corporation is the Corporate Culture. Often overlooked, the
evolution of the corporate culture in tandem with the employment of
the staff is crucial to the gelling of the employees, the
establishment of shared vision and the cohesion of the several
department fiefdoms that characterize corporations. The existence
and survival of business entities, after the death of the owner, is
known to depend on the strength or weakness of the corporate culture
prevailing at the death of the owner. The entrepreneur therefore
must rapidly inculcate in all employees the corporate culture even
as each one is being hired in order to ensure the survival of the
corporation at all times. Besides the support that the corporate
culture provides to the start-up venture corporation, the
well-designed corporate culture also provides the entrepreneur a
means of monitoring the employees with a pseudo intelligence network
within the corporation, as to alert the entrepreneur of any
impending danger from any employee. The serious entrepreneur ought
to consider an adaptation of The Art of War
by Tsun Tze, the
greatest military strategist that ever lived, to the end of
developing an effective corporate culture for the venture
corporation. This framework for an effective corporate culture is
also the basis used by most nations for the respective intelligence
networks operating within the borders of the nations.
The institution of the
Corporate Financial System is equally important as the Shadow
Organization and Corporate Culture, because a hands-off management
without proper checks and balance will also lead to the failure of
the venture corporation. The reality is that almost always the
entrepreneur plans the founding funding of the corporation with the
object of leveraging the funds. Hence, there is the need to ensure
that funds are expensed as precisely as the entrepreneur had planned
the budget; and the checks and balances are readily enforced
automatically only with a Corporate Financial [Management] System is
in place.
The entrepreneur therefore
must take great care and pains to ensure the execution and
implementation of these subtasks. These function subtasks that have
been addressed so far all factor towards supporting the venture
critical mass. |
