Keeping strategy and execution in business as simple as possible is often a key to success. We have a tendency to overcomplicate and over think things as business leaders. One simple and effective tool I have found useful when starting a new business or major project is framing the undertaking with what I call the Five Simple T’s: Talent; Treasure; Time; Tactics and Transparency.
As a case example of how this can work, I will use a recent startup Aventure Management are partners in. Brown Dog Carriers & Logistics (www.browndogcarriers.com) which was started in June 2017.
Let’s start with the Talent component. This might be the most obvious. You need talented people to run a successful company. But first you need to identify the type of talent you need for your business to be successful. There are common areas of talent all businesses need. Sales, Production, Accounting/Finance, HR, IT, and Legal. Then there are the specialty talents you need based on your business. If you are building a software company, you probably need a top-flight CTO/Programmer. In our case with a new Transport/Logistics business we needed an experienced operator who knew the ins and outs of trucking and logistics. In a start-up, people usually wear more than one hat. In our case our President was the talent when it came to the Operations of the business but was also the Sales and Marketing talent the company needed. The other partners brought Accounting/Finance, HR and IT expertise. In areas where we didn’t have the expertise, we made sure to outsource that. I can’t emphasize enough that if you don’t have talent in an area that you perceive you need it, then go get it through a hire or an outside agency.
The second component is Treasure (Capital/Cash). This is just as critical as talent. One major cause for business failures is the lack of upfront capital/cash when starting the company. See the blog posting; http://www.aventuremgt.com/blog/2016/12/10/cash-the-oxygen-of-your-business When we started Brown Dog, my partner and I did extensive financial forecasting for the first year and calculated the amount of capital we would need to operate, pay bills, meet payroll and expenses while trying to build revenues. Many companies under-estimate the cash needed and just before they are about to start generating positive cash flow they run out of cash. Then it’s panic time and often loss of momentum or even the business when having to negotiate from a position of weakness. When we started Brown Dog, we came up with an amount of Treasure we thought we would need and then doubled the number assuming we missed something. This helped us through the lean months that most startups go through.
My third component is Time. This is not a measurement of how long before your operation is successful. This is a measurement of the amount of time you as an owner/investor are willing to put into the business to make it successful. A simple axiom for business owners; Lazy people need not apply. This means that as an owner you work whatever hours are needed to get the job done. That means you need to be the first into the office in the morning and the last one out in the evening. In our case it means our President spent weekends painting our new offices, jumped in one of our trucks at midnight to help a potential customer who was left in a bind (they are now one of our best customers). Driving another truck in the day and then just before ending a 16-hour day willing to take the trash out. For me it means working evenings and weekends to mentor and review finances and meet potential clients, for our Accounting/HR partner it means working Sunday mornings to get a week of billings up to date or while on vacation getting the payroll completed. Basic rule is that business is 24/7 and you need to be available the same amount of time.
The fourth element is Tactics. Having a set of Tactics (strategies) to implement will give focus to your business and will help you keep on schedule and on budget. Both critical to long term success. When we started Brown Dog, we made a list of key Tactics that we believed would be needed to meet our defined goals of growth, service and profitability. These included everything from incorporation and web site design to asset purchase and management. We then set sub tactics with budgets, timelines and identified the responsible person for each Tactic. This enabled all of us to see at a glance where we were in keeping the project moving forward.
Finally, I cannot stress enough the importance of Transparency. Being open and honest with your partners, customers and employees will go a long way to fostering support for you personally and your business. I have found it always better to be up front and honest regardless of whether the news is good or bad. People know if you are being honest with them or bullshitting them. So be honest and genuine and you may find them going an extra mile to help you through a problem. That’s always been my experience.
I have been lucky enough to have been involved in half a dozen successful companies both as an employee and an owner/operator. Over the years I have refined my pitches and one of them includes having the right Talent, ample Treasure, Time invested, sound Tactics and lots of Transparency in place. That’s my key to success!
Darrell Pardy, CPA CA