Your ambitions are large, but so far, your team is small. When you look around your table, you see a handful of co-founders, a marketing pro, an HR person, and your legal counsel. But you don’t see many other faces, so you know that when a truly unexpected challenge appears in your path, you might have a problem.
For example: What will happen if your committed investors don’t or can’t come through? If you negotiate a binding contract with a condition that doesn’t work in your favor? What if you misreport your earnings, fall short of shareholder expectations, or even experience an unexpected avalanche of profits that you aren’t sure how to properly invest or allocate? You got into this business because you love what you do, but the entrepreneurship learning curve is fast and steep.
We built our law firm from scratch, so we know the pains and gains of entrepreneurship intimately. Here is some advice on how we’ve learned to deal with the unexpected:
Put together a business plan
Have a business plan that you have vetted with key advisors, and go over it at least quarterly, if not monthly. Constantly assess where your revenue is coming from, and, who your customers are. Figure out your brand message -- can you tell someone what it is you do and who your customers are in a single sentence (and ideally not a run on sentence)?
Recognize areas of potential gain and loss
Staffing, marketing, product development, sales, delivery, tax reporting, shareholder relations and customer relations are all areas in which you can—and will—encounter increasing challenges as your company grows. Money can solve almost every problem, from a flawed product design to a trademark challenge. But unless you have limitless reserves, you’ll need to approach each new issue with caution and judgement. The small allocation and fiduciary decisions you make today will have a lasting impact on your growth tomorrow. In other words, the right moves now can keep you out of trouble later and allow you to gain maximum leverage from every asset you have, including your trademark, your data, your inventory, and the group of superstars around your table. Think through decisions wisely, and if you make a mistake, make sure to correct it as soon as it’s discovered and rethink your next steps. Surround yourself with people who are willing to tell you things you don’t want to hear.
Event the most valued and trusting partnerships can shift over time. For example, a vendor that currently provides a vital raw material at a fair price might merge with another company that holds different priorities. An employee who costs a certain amount today may cost much more in a few years, due to her accumulating skills and institutional knowledge. A customer base can dissolve, a tool can become obsolete, or a regulation can change. Will you be financially ready? The ground under your feet can and will shift with time, but as long as you maintain flexible guidance, you’ll stay a step ahead.