Starting from scratch

October 2012 » Features » BUSINESS STRATEGIES
Keep business plans simple when starting a new company, opening a branch office, or offering a new service.
Gerry Salontai

Starting up a company, a branch office, a new service offering or other business venture from scratch can be a challenging and daunting ordeal – even with the most entrepreneurial spirited people. I can relate to this fact from having started several operations in my career and now working closely with a number of start-up businesses. And although this article may focus on the keys to keep in mind when starting a business, much of the fundamentals also apply to managing smaller companies and branch offices of larger companies.

So what are the key elements for a new start-up to survive and sustain itself?

There are obviously many requirements to building a business. The founder of my old firm, Jim Kleinfelder, used to say, "This is a simple business. Just get the work, do the work (well), and get paid for the work" and you should succeed. I've added to that through the years that if you don't do the first of these – get the work – you can forget about the other two. I firmly subscribe to Jim's simple approach combined with several other key elements to ensure you can start and sustain the business over the long haul.

An essential element of business, whether you are a start-up or a mature business, is to have a business plan. Imagine taking a vacation trip and not know where you are going, why you are going, what means of transportation you will take, and what you expect to do and see to give you the best experience. The same applies to business. Having a plan defines your future – how you will get there, measure your progress, and identify the expected outcomes and rewards. It doesn't have to be complex, in fact it only needs to be a handful or two of pages for that start-up company – just enough to be that useful "roadmap" that will guide the decision-making process and direction of that new venture.

What should be included in this plan?
A plan should include a clear vision of what you want to achieve, why you exist as a company, and a definition of what drives your business. I find that many companies from the small to the very large don't spend adequate time defining these. One must know where you want to go as a company over a reasonable time period. And defining why you exist – whether it's to serve clients, solve problems, create value for the shareholders, or a combination of these and others – goes hand in hand with that vision. The vision and purpose then helps you develop a clear understanding of what drives your business and helps define your competitive advantage in the marketplace.


Having a plan defines your future – how you will get there, measure your progress, and identify the expected outcomes and rewards.


The business plan needs to consider external factors such as regulatory, political, and economic conditions along with market, client, and competitor assessments. It also should consider the internal environment such as organization and quality. This internal and external assessment leads to the development of three to five objectives with supporting strategies that equate to "success" after a certain time period, such as the first year. From this, a tactical business development plan, revenue and profit targets, metrics to achieve, a detailed financial budget, along with identification of the risk factors to achieve the plan and identified corrective actions, are elements of a good business plan. Just remember, the plan should be relatively simple and as short as possible, containing only the amount of information that is needed.

So what now?
The real work begins after you have a plan. It's the execution that really counts. And the key to good execution is keeping things as simple as possible. Some have this temptation to accomplish everything at once in order to "conquer the world." Matching initiatives with the resources available – which often may be just a person or two – selecting those "critical few" that will make the difference is the best approach.

In 1990, I was asked to lead the expansion of our company in an untapped geographical region on the brink of a national recession with the help of a few talented staff. Our small team forged a vision and executed a plan to grow the region. We focused our attention to the immediate market opportunities that could generate work during the next year and began a consistent business development process. We focused on leveraging relationships from the parent company, albeit from an entirely different geography, while targeting new clients we had identified in our business plan that had work potential. Our efforts placed an emphasis on those clients with whom we could develop deep relationships – something I believe to this day that separates the best companies from the rest of the pack.

It is a balancing act to then get the work done. This is critical in any new venture because you will be judged and measured by how well you do on those first opportunities you are given. You must deliver quality work, on schedule, at budget, and meet your clients' expectations if you ever expect to get that next opportunity. I personally learned this the hard way earlier in my career and hold this as a priority. And at the same time, you must administer the business, invoice, and collect the money for the work you have generated. It's a lot to do. That's why keeping your initiatives to the number that can be accomplished, being laser focused and persistent, and keeping the rest of your business simple is key. Again, I find that even very large companies that are the best performers do these things well at every level in their organizations. Habits start small. There is no better time than when you start the venture. Just think "get the work, do it well, and get paid for it" and you will be on the right track.

Monitoring progress
If you have a plan and you are working toward objectives and goals in the plan, then it just makes good sense that the progress should be monitored. Plans should be monitored closely and contain feedback provisions to determine how well you are doing against the objectives, the established metrics, and overall schedule. This is the best way to ensure progress, but more importantly is to measure if the strategy that was developed is driving decisions that are showing progress. Monitor your progress often – at least quarterly.

Tracking information such as client contacts, project wins, backlog, revenues, detailed individual financial performance metrics, profit/loss, accounts receivable, and other appropriate short-term metrics is a must. The better you can measure your progress, the more likely you will achieve the objectives. And don't forget to keep it simple and not get lost in paralysis by analysis. I have experienced time and time again young leaders who create pages of spreadsheets to analyze how things are progressing when just a single handful of measurement points will tell you all you need to know. Again, whether a start-up or a mature company, the best seem to keep things very simple and thus perform the best.

Keep in mind that a very important aspect of monitoring the progress is to make necessary adjustments. Elements of any plan can be changed. Your ability to sense that progress is stalled and adjustments or mid-course corrections are needed is critical to the overall success of your venture. Convincing yourself that things will get better will not get you to that vision, let alone survive. Remember that hope is not a strategy.

The information in this article is intended to provide useful guidance for the initial start-up of a company, branch office, new service offering, or any other business venture. The key is to develop a plan of where you are headed, vigorously execute it, monitor the progress, and make corrections when needed. It's that simple if you remember to keep it simple.

Gerry Salontai leads the Salontai Consulting Group (www.salontai.com), a management advisory company focused on helping companies achieve success in the areas of strategy, business management, and leadership. He can be reached at 858-756-5169 or gerry@salontai.com.

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