Creating a start up with lot of energy and involving associates and partners sharing similar vision was a great start. However, as start up like Smartech or other companies move into their 2nd or 3rd year, company will have to keep looking for ways to get better at everything they do. Here are some thoughts on how we can best optimize a start up like ours. Key theme centering on optimizing a start-up would be:
Make a Skilled Team
Getting the right set of people for a start-up or any company remains mantra for success. Individuals with necessary skills is the basic criterion to secure a job and be part of the journey. The initial team who will onboard the start-up will have the capability to steer the direction of company and decide on future course of action. Apart from job skills, team should also share the vision and believe that company can be a value creator in business.
Do Proper Analysis
Being effective and optimal is always a necessity to be successful for business. An efficient business will ensure that business operations remain profitable and sustainable in near future. An analysis goes a long way in making sure businesses are making decisions relevant and effective to its stakeholders. Some of the tools used to analyze decisions are:
- Decision trees ( Mathematical AND, OR, XOR Gates)
- Optimization ( Statistical Modeling)
- Software tools like
- Crystal Ball
- Risksolver etc.
- Pareto Analysis
- Fish Bone Diagram ( Ishi-Kawa Diagram)
Take calculated risks
The business planning template/analysis should have a section to analyze all risks associated with the business. With proper risk assessment/identification/ all necessary steps can be planned for and taken in advance to ensure sustainability and success of business. Optimization techniques provide a way to factor in the risks associated with a venture. These risks could be due to financial, geography, supply chain, labor market, political, governance etc.
Set Target Clients:
Once business strategy is in place, execution plans must kick in and ensure that business operations perform their functions as per strategy. For operations to execute, they must have clear sense of direction as to where the company is heading. This is where ‘Goal-Setting’ will help. Business objectives must clearly identify set of target clients whom the company wishes to cater. Dedicated business managers must ensure that they are serving the clients as per company strategy. Regular feedback from clients will ensure business is aligned and fulfilling customer needs.
Necessary funding resources must be available to business units so they can function appropriately. Business manager’s incentives must be aligned with budgetary outcomes to ensure that actions and incentives align to fulfill shareholder interests. Necessary budgetary allocation software processes, accounting methodologies must be used to ensure appropriate allocation of resources. Planned Budget, Actual Budgetary Spending and Variances must then be analyzed and course corrected for future operations. To stay ahead of the curve and maintain healthy operations (financially healthy), businesses can carry out benchmarking exercise so they know where are they with regard to their industry over all.
Have Legal Checkpoints
Ombudsman is a necessary position within a company. Have a mechanism to ensure that businesses stay legally compliant. Thorough 6 monthly, yearly audit process will help you identify the legal issues within the company and how you can ensure compliance. HR Ombudsman must ensure compliance of human resource with law of the land.
Save min 8% from profit
Once business makes a profit, try to maintain a minimum benchmark of retaining profits. The profits retained can then be used for future growth, paying out dividends, corporate social responsibility etc. Essentially it will act as a curtain to make sure not entire profits is distributed amongst shareholders.
Have a back-up plan
Plan for contingency, in case of risks identified during analysis stage, some of the risks do get realized, plan for a Plan B. Business operations must remain sustainable and should have many strategies to mitigate risks. Careful review of planned versus actual outcomes must be analyzed and mid-course reviews and course correction strategies must be implemented.