The incorporation or organization of a new business often invites the question, “What’s next?” Here are some things to identify in the first couple days which, if done properly, can increase the chance of success of the business.
- Know the Why.
The Why is the motivating purpose for the founder or founders: Why get up in the morning? It is a reason to put time and energy into the business, even during sub-optimal conditions. It is a reward that comes with success. The Why may draw on the mission of the business, although it typically is not identical to it. It may be a single thing, or multi-faceted. Knowing what it is helps promote focus and motivation.
- Plan for Growth.
Most businesses seek to grow and expand. But how is that going to be accomplished? By taking on new stakeholders? Attracting investment? Offering incentives? Each of these courses of action can have implications for the business. Before commencing one or more of them, consider how the organization and control of the company might change. There are numerous choices when structuring a company. It would be a disaster to unwittingly move from total control to a minority share—but sometimes it is possible. Proper planning and documentation can avert such problems.
- Have Detailed Procedures.
Although this seems self-evident, it is important to take time to annotate the processes and procedures of the business. Doing so promotes efficiency and accuracy for repeated activities. It also creates a library for how to tackle tasks that do not come up frequently. By preserving the process, you will not have to research it again later. Finally, it allows someone to step in and assist more readily.
- Anticipate Taxes.
Every business entity should anticipate having to pay taxes. Which apply – Payroll? Sales? Estimated? Something else? Identifying and budgeting for the relevant taxes and the payment schedules can help avoid the periodic financial crises as well as a lot of stress. Also, small businesses seeking to be taxed as an S-corporation have approximately two and one-half months from formation to make that election. Entities intending to make the election need to keep track of that deadline, or wait until the next tax year.
Getting the business formed is exciting, but laying the foundation for success is really critical. Be sure to allocate time in the first few days to these fundamentals, so that they do not get lost among matters that seem to present more immediate deadlines.