Organizing

Before you get too deep into the subject, have a bit of inspiring fun, by learning at a secondary school level, something about Fractals—as in the image on the right.

Cynthia Lanius is a math teacher and if you look at her page on the Koch Snowflake, you will be intrigued and you can actually use the method for problem-solving in the organization of what your startup does. Take the simple triangle as 'how to make the product' and let the iterations help you get to all the component parts of the problem.

The Parts That Make Up The Whole

What have fractals got to do with organizing a business? Plenty. Simply because you have an idea for a business, it does not mean you can start one. You have to get organized and structure your thinking on many parts that make up the whole:

• who owns the business
• who does what, and who is responsible
• how do you make it happen
• how does the product or service get distributed
• what is the order for things that need to be done
• how do you record progress/measure success
• what legal/tax structure will you use
• how to get the missing skills
• what are the ways to deal with liabilities, and even
• what do you have to do to get a business bank account?

The questions will be specific to you and your business, but sit down now and work out your own list, even if you do not yet have answers.

Think practically and strategically about:

1. who do you need on the team: partners; contracted; services
2. what resources do you need: financial and physical
3. possible organizational consequences over time.

Organizational Tasks and Actions

Now the hard and often boring work begins. The exciting part has surely been the creative and conceptual, but the ideas will never turn into cash without very careful organizational planning. Below there is a list of tasks and the actions on which decisions need to be made. The list is not exhaustive.

The last item is a SWOT analysis. You may have used this tool when you prepared your business plan, but now it is worth using again, now that you are operationalizing that plan. Successful businesses calculate risks and prepare contingency plans. Here is a place to be very honest and make sure that the SWOT is based on knowns, not aspirations.

Organizational Tasks and Actions

If you want more guidance on any of these topics, then visit the WorkSavvy Toolchest or Website Links for more help.

Professional advisers: Entrepreneurs often tell me that their first port of call after thinking that they want to start a business, is an attorney and/or an accountant. It is not a bad course of action, but it is likely to be an expensive one. My lawyer's advice has most frequently been, prepare to do it yourself and then check with me (there is plenty of software and internet-based help). Rather than a Certified Public Accountant, start with a qualified bookkeeper.

A seemingly grueling area is the field of patents and copyrights. But if you take a deep breath and take it slowly, it is not too tough and initially not an expensive pastime. A good place to start might be Nolo. In the US, the Patent Office is a great help to novices on patents, trademarks and copyrights. The website is a great help, and for example you can file a provisional patent for only $100 if you are a 'small entity' (half the standard fee).

Two books will really help:

• For legal matters: Small Business Survival Guide;
• For accounting: Keeping the Books.

If you incorporate an LLC, you will need to keep a minimum of statutory records. I recommend keeping your company in a box. A box file where you keep all the important or official papers, like company registration. A very convenient way to do it is to buy an inexpensive Limited Liability Kit and Seal from Bizfilings. WorkSavvy has one. There are most legal forms also available free at docstoc.com.

Incorporation

You have important choices to make on incorporation. In summary they are:

1. Sole Proprietorships/Sole Traders: you are fully liable as an individual and normally your revenues are taxed as personal income. There is no capital separate from the individual. The least amount of bureaucracy of all forms, though in some countries (e.g. France) the formalities are nonetheless somewhat burdensome. In the US, if you 'do business as' or DNA for short (i.e., you use a trading name that is not your own personal name), then you will need to do a (simple) DBA filing with the State or local jurisdiction (you'll need it for a business bank account).
2. Partnerships: there are various forms of partnership in different countries. There can be two or more partners, generally collectively liable and taxed either on a personal or corporate basis. Partnership types vary by country but can include limited partnerships.
3. Cooperatives: some countries have the cooperative structure available. This structure type has no shares.
4. Limited Liability Companies: the entity is separate from you and is designated differently in different countries (examples are: in the US—LLC; in UK—Ltd; in France—Sarl; in Germany & Austria—GmbH). In some European countries there are specialist limited company types for different sectors as well as mixed private/public (state) companies. Limited companies have capital in the form of shares, are controlled by members or managers and, as the name implies, have limited liability. In the US, profits are taxed as your personal income and thus you avoid double taxation. WorkSavvy LLC was set up online at the Secretary of State's corporations division in my state within a week of application for $75. Each state has its own corporations division and most have help available online and by phone.
5. Public Companies or Corporations: these will tend to be larger entities with more members and/or those seeking considerable amounts of capital investment. The legal requirements, particularly on disclosure, are more onerous. the designations in the different countries include: in US—Corporation or Inc; in UK—PLC; in France—SA; in Germany & Austria—AG, but watch out: in Switzerland an AG includes limited liability companies.

Whichever route you choose (in the US), you will need an Employer Identification Number from the IRS. You will even need one if you decide not to incorporate (not a good decision). In the US a non-incorporated business will need at least a DBA (Doing Business As) registration in the state where it is located. A guide worth scanning, at the very least is the IRS Tax Guide for Small Business.

Another number you will probably want (in the US) is your NAICS (North American Industry Classification System) number. Go to the US Census Bureau site and search for the keyword that best describes your business. For example, mine is 541611 for 'Business Management Consulting Services'.

To help you decide which way to go, a good place to start is LLC or Corporation? How to Choose the Right Form for Your Business. If you opt for a LLC, the guide Form Your Own Limited Liability Company is a good place to start, then you can use Your Limited Liability Company: An Operating Manual. These all come from Nolo and you can find related titles on taxes, leases and other aspects of running the business. There is even LLC Maker with which you can create an LLC or upgrade your business to a LLC

For a shortcut to incorporating a business and lots of other helpful stuff, try Bizfilings:

Critical Path Analysis

You will not find the methodology here, since there are so many ways to tackle the problems of what has to be done when, before or after what. Suffice it to say that as you think about organizing your business, you need to make sure of the sequence. You can find a simple description from the NetMBA.

A formal critical path analysis, whether using the back-of-the-envelope technique or a highly sophisticated bit of software, I suggest you search for the term and choose the method you like best. You will see mention of PERT diagrams. They are those diagrams with boxes and arrows to show you pictorially what needs to happen.

These two helpful sample diagrams are from Visitask where you can find more project management help. In the Gantt chart you get sequence, but not dependence, i.e., which task can only be done when one before is complete. That's when you need a PERT diagram.

Entrepreneurial Teams

Entrepreneurs are often seen as lone swashbucklers, but the best are real team leaders, who can:

• be clear on strategy
• create and maintain urgency
• complement their own weaknesses
• delegate with accountability.

Almost any startup that seeks to get financed institutionally will need to show a strong team. There is plenty of research to back the notion that new venture success often depends on the founding team collectively, rather than just the lead entrepreneur alone.

Choosing the startup team is critical. Appointing other members of staff is a hazardous occupation. It is important not to hire when you do not need to and when you do to hire that you have planned on the right people.

Look at the pages on Urgency & Momentum and Leading & Managing to get more guidance.

Preparing Yourself

To start a business, you are going to need high levels of focused energy and productive discipline. And not a little stress, unless you work on yourself.

Four life domains: think about the ambitions and realities of your life in the four domains of

• your work and the business
• home and relationships
• community and society
• mind, body and spirit.

Examine and improve on the overlaps, conflicts, integration and authenticity of the domains so that you can operate optimally.

Possibility: allowing the possible is a natural talent of the entrepreneur. It is interesting that many entrepreneurs have been mould-breakers. Discontinuities or paradigm shifts are frequent in today's marketplace. In ways of doing business, too. The entrepreneur has to be awake to the art of the possible, not the impossible. The way my startup did business in the eighties was considered to be an impossibility, but that did not intimidate me. Also, impossible thinking will help you stay open.

Neuroplasticity: a natural concomitant of being an entrepreneur is that you will be working your brain on many levels: creativity, learning, intuition, deduction, calculation, and emotion. Make sure than you don't get one-tracked. Neuroplasticity is the brain's ability to reorganize itself by forming new connections throughout life, and you need as much of it as you can get. It has been described as, "one of the most extraordinary discoveries of the twentieth century."

Meditation: whatever your stage of spiritual development, meditation, you may like to know that brain research is beginning to produce concrete evidence for something that practitioners of meditation have maintained for centuries: mental discipline and meditative practice can change the workings of the brain and allow people to achieve different levels of awareness. Leading neuroscientists and quantum physicists discussions with the Dalai Lama led to much research on the positive link between meditation and neuroplasticity.

Wellness: no lecture is necessary on the importance of wellness. Diet, weight, exercise, drinking plenty of water, improving the functioning of the immune system are all important and need not bite heavily into the working day. No more than meditation. You can devote just minutes a day, but you need to fully intend to it. I do ten minutes of Qi Gong (chi gung) and 30 minutes of mindfulness meditation a day. The discipline is what keeps me at it. Just like taking a tablespoon of cod liver oil night and morning to improve my faltering immune system!

Personal Time Management

Self-assessment. Remember as you think about organizing tasks, you will need to begin with yourself. There is a mass of help out there, but you need to use a time management process that suits your personal style. Before you start getting a grip of managing your time better than you have done in the past, it is vital to know where you are right now.

Time management systems. If you type time management into a search engine, you'll get in the region of one million listings. Everything from to do lists to computer programs. They'll also include paper-based daily/weekly/monthly/year planner systems, or personal organizers for scheduling (e.g. Franklin-Covey, Filofax, Day-Runner in Letter/A4 to Classic/A5 to pocket sizes). I use Filofax, because it is more 'neutral' than the others.

Memorable stuff is always happening, but where do you file it all? In Evernote. I do. With free and premium versions, it allows you easily to capture information in any environment using any device or platform that's most convenient, making the information accessible and searchable at any time, from anywhere. A bonus is that you can add Web Clipper to capture web pages or selected parts of them.

Personally I change my system fairly frequently. If I use one for too long, I seem to revert to scatterbrain. The I know it is time to start a new discipline.

Goal setting. When you think about setting your own goals and managing your time successfully, it is important to balance and integrate the ones you set for your work, home and relationships, community contribution, as well as those for mind, body and spirit.

Whatever your planning system, it will all start with GOALS. Again a Web search will reveal a myriad of choices of methods. Why not get help? I suggest using Goal Enforcer to help you with tools to define, maintain, track, and achieve your goals.

Meetings: Reflect on the real cost of meetings, especially once your business is up and running. The benefits of face time are huge in building (or destroying) relationships, but money leaks out of meetings, too. Vital processes are: planning, managing, participating and recording—even for informal ones. Have fun and learn in the sandbox of effectivemeetings.com and try their Cost of Meetings Calculator.

Measurement—Hard and Soft

Numbers: An organized attitude to measurement is an imperative. It's fairly obvious that you need to keep up to the minute (I mean almost literally to the minute) figures on income & expenditure and cash. Even if your accounting is simple, like records in an Accounts Journal (take a look at NetMBA' note on General Journal Entries to see what I mean), you must keep a handle on what's going on. The basic set of books is described in Preparing the Financial Statements. You can see the Financing page for more on small business finance.

Sales: Data on sales and sales forecasts will keep you on track for your growth targets. In a matter of days you can lose the thread and the end of the month may be too late. At the simplest level view your actual sales against budget or forecast (variances). You can start with the figures that you prepared for the small business marketing plan or the business plan Income Statement, preferably expanded to give detail on individual products, services or market. Then you can manage by variances (real-life vs. plan) and ask yourself why things have not turned out as planned and what corrective action you can take.

I suggest you use some form of customer relationship management, keeping detailed and orderly information about your potential and actual customers and the actions you take to secure orders. Try Free CRM—CRM Software for Small Businesses or free Personal Edition CRM from salesforce.com, but otherwise be sure to keep track of sales potentials, suspects and prospects at the very least, so that you can monitor your activity and pipeline. If not you are going to find that when a sale is done, you suddenly have to start from scratch, the repeated filling of the pipeline is essential. See Savvy Marketing for more.

Soft data: As well as the hard data, you'll want to keep track of the 'soft' stuff as well. It is harder to measure, but start by recording matters like: feedback you receive on your products or services both directly and indirectly; attitudes of your colleagues and their comments on you; things that are changing in your marketplace; new products in similar markets; trend data that you read about (inflation rates, consumer sales, the housing market) since though these may not have a direct effect upon your business, they may change attitudes and behavior that do impact on your ability to trade. A good free monthly trend newsletter is available from Trend Watching. Another excellent source is Springwise and its network of 8,000 spotters who scan the globe for smart new business ideas, for entrepreneurial inspiration. There is a mass of resources available online. Take a look.

Timeliness: In both the case of hard and soft data, you will need to apply your judgment and take timely action. Easy to say and hard to do.

Ways to More Success

Before you crash ahead, take five minutes to read a 500-word article on "Five wAys to more success before you start". As you draw breath, you will surprised how much it helps you. When you get going, an article designed to help you is Leadership Loitering. Some books that will help you a lot are to be found among the Leadership Books in the Library.

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