Why am I writing about business structure? Well, I spent over a decade in an organisation and watched it blossom from an entrepreneur’s idea. That business began with less than a cent and evolved into a mid-sized consulting company. This was accomplished in one of the most hostile business environments on earth – Nigeria. I have also considered how so many brilliant enterprises in Nigeria fail to evolve and would like to help.
For clarity sake before I proceed, here’s what an unstructured business looks like:
- Potential clients try to reach you but you never pick up your phone or promptly return calls.
- You don’t have staff that are equally as competent as the founder or MD. Therefore, the business can’t grow beyond the number of briefs he/she can directly supervise.
- Your official email address ends with gmail.com or yahoo.com and you don’t have a website.
- You’ve not empowered other people besides the MD, to sign cheques and contracts.
- You are not registered as a business entity nor do you have dedicated or shared office space.
- You do not file annual tax returns or have audited accounts. You do not remit monthly taxes.
- You can’t do international business because you don’t have a debit card or domiciliary account.
- Your staff do not have job contracts or documented job descriptions.
- If the founder or MD should fall ill for 3 months, the company would fall apart.
There are many more examples, but you get the point.
Now, here’s a simple prescription for structuring your organisation.
1. DEFINE YOUR REASON FOR DOING BUSINESS
Your life concept will invariably affect your business objectives. If your ultimate desire is to just make money for instance, you won’t invest in long term structures and you’ll lack business focus. If tomorrow, fish becomes a hot selling product, you’ll jettison whatever it is you’re doing now to jump into the fish market. After all, the overall goal for you is to make profit in the shortest possible time frame.
Once you decide why you’re in business beyond profit (and the kind of company you want to build), then you can design a structure to get you there.
2. SET UP ADMINISTRATIVE STRUCTURES
As an entrepreneur, you may have highly creative ideas or products. But, if you do not have the capacity to develop those ideas and then present them to the world as marketable propositions, you will be frustrated.
Administration is the business of the business. It ensures products get to market on time, payments are collected as at when due and documentation is in order. You would be amazed what a properly filed letter or invoice can do for you, when a dispute arises with a client. Also, what a prompt response to a brief or a returned telephone call can do for your bottom line.
Hire an efficient operations person to handle the everyday issues so you the business driver, can focus on the bigger picture. And please, never get an immature unintelligent minion to run your operations. You will destroy your company. Find a responsible and trustworthy person who can capably represent the company in a meeting.
Stop trying to handle regulatory issues on your own. There are competent individuals and firms who consult for small and growing businesses. Instead of banging your head against the wall trying to file monthly taxes, pay someone a token to do it.
Growing businesses need basic templates to work with that are available online. For instance, an HR Contract for staff or a Management Accounts template you can populate with information from invoices and receipts. At the end of every month or year, assess how your business is doing financially. This will give you an accurate view of your company and inform you of whether you’re a going concern or are approaching death.
As a growing business, insure your most expensive assets. You probably can’t afford to replace them out-of-pocket.
3. BUILD YOUR TEAM
To grow your business, you need a small but critical number of people with clear job descriptions and deliverables. Everyone must pull their weight. Keep your organogram simple and some functions may be outsourced.
Here’s a list of people you need as you build a business structure:
Operations Manager: If you’re selling a physical product, this person typically runs sales in addition to operations. If this is the case, then they’ll need a support staff to take care of admin paperwork and documentation. The finance role for a growing team is usually handled by the CEO and supported by a contract accounting firm.
Accounting Firm/Accountant: This can be outsourced. You simply need someone to balance your books every month and to pay the required taxes. At the end of the year, they’ll do your audited accounts and file your tax returns.
Lawyer: This is usually outsourced too. This person reviews your business contracts and helps you with due diligence, when required.
Content Manager: You will need someone to oversee your website and social media channels. Again, you may outsource this. The person may also contract graphic design and programming.
Customer Service: Someone must take responsibility for customer inquiries and follow up. Have a dedicated person for this and ensure they work closely with your Content Manager for online leads and Operations Manager for offline leads.
4. DEVELOP A BRAIN TRUST
A growing business may not be able to afford a management consultant or commission market research. Also, the perspective of a single mentor may be too narrow for a long term vision. Therefore, you might need a group of people you respect within and outside your industry who can serve as an Advisory Board or sounding board.
The members of this group should be experienced, seasoned and wise. They should be approachable and willing to tell you the unvarnished truth. Their job is to meet with you, hear you out and provide insight from an outsider’s point of view. They do not make executive decisions and only provide counsel. They are your ad hoc focus group and help you to shape ideas for the market. In some cases, they may provide links and networks. You could decide to pay an honorarium for their help – it’s up to you.
5. HONE YOUR MARKETING
Besides having a good brand, website and other marketing tools; you need a hands-on person to physically sell your product to the market when it’s ready. (This may or may not be the company founder). It must be someone who has the personality and drive for it. If it’s too expensive to hire someone, get an agent you trust and pay them a commission. But nothing beats having an in-house salesperson. Like I said previously, sometimes this role is merged with operations in a small enterprise.
Without a driver, your business won’t grow. At times, your strategy may be to rely on referrals. Notwithstanding, you need someone to physically write proposals, attend meetings, do presentations, seal the deal, and most importantly follow up on repeat business.
6. GET AN OFFICE
Some larger businesses insist on physical site inspections before they give smaller businesses contracts. So, an office may become a business need at some point in your life cycle. Instead of trying to bear the cost of an office alone, identify 2 or 3 other people like you and share office space or you may rent a co-working space.
7. MEET PEOPLE
Move beyond being a local champion or competing with them. Broaden your perspectives and learn about best practices through reading and by meeting others. Travelling does wonders for your world view. You can do it physically or through the pages of a book or the Internet.
Spend time with potential clients, seeking to understand their world. Read what they read. It will help you to see things from their points of view and to develop products that align with their needs. Also, you’ll realize that customers prefer to do business with people who understand them and not people who speak technical industry verbiage.
So, these are my seven prescriptions for developing a business structure as your grow. I hope they help.Here are seven prescriptions for developing a business structure. I hope they help. Click To Tweet