Last week, my wife and I decided that we wanted to update a couple of specific items in two of our bathrooms. The master bathroom needed a new shower enclosure and the half bath needed a new sink and a coat of paint. Neither of these projects should have taxed our collective home improvement knowledge, and should have never taken more than a weekend, combined. Two weeks later, we finished these projects last night. So what was the problem? We didn’t plan everything out in detail. New tasks, issues, or ideas would pop up as we worked on the project. We knew what we wanted to do in theory, and I dove into the demolition. What can I say? I really love the demo part of construction. I can’t say that we would have avoided all of our pitfalls had we planned out the whole project, but we would have avoided several trips to the big box home improvements stores.
Could my home improvement woes be an analogy to a new business? Absolutely. Your company, your joint venture, your business is just like any other project. You need to know what you are going to do and how you are going to do it before you begin. This begins with the formation: are you going to form a limited partnership, a joint venture, a limited liability company, a corporation, etc.? What is your tax position: pass-through, S corp, C corp, etc? How will your distribution channels work: strategic partners, exclusive, profit sharing, indemnification, etc? Are you hiring resources for job functions or outsourcing: accounting, HR, marketing, sales, production, etc? How will you finance this operation: loans, investors, share purchases, etc? Where will it be located: brick and mortar, virtual, home office, etc? Where will you be doing business: local, regional, interstate, international, etc? Who are your customers, who are your partners and are they both? When the time comes, how will you wrap this business up? Etc.
Many people just dive right into the business. They jump onto the appropriate secretary of state website and complete the bare minimum to register a company, and run full speed ahead. Many times this works for them with no issues to address. However, it requires several different trips to your appropriate professional resources to resolve the failure to plan when an issue does arise. This invariably slows the business machine and becomes more expensive. Take a few minutes in front of every decision to consult with your trusted advisor network (legal, insurance, finance and tax, at minimum) and see what pieces to your puzzle you may be missing. It will come together easier in the end.
Tags: Trusted Advisors
