Do Business Well

5. Building a solid foundation: infrastructure required to manage your business

Just as you need a solid foundation for a building, so you need theright infrastructure for your business. This needs to be addressed ahead of time. Seriously, many businesses fail because they become too successful. Their infrastructure can’t cope with their growth and so their business literally falls apart. Don’t make that mistake. Clearly define what infrastructure will be required to run your business, both in the short and long-term. Let’s look at the different components of your business infrastructure:

• Premises: What is the physical capacity your business will require? What will be the optimal location for you in terms of closeness to your customers, major roads and the location of the competition.

If you are thinking of starting a service or consulting business premises may not be important because you visit the customer on their premises. Both Eric and Mike are constantly on the move as they travel to where their clients are.

• Staff: Remember the fundamental law of business: People buy People. This issue is so important that we dedicate an entire session to it later on. At this stage, though, here are the key issues you need to consider in your business plan: what is your ideal staffing complement in terms of the number of staff and their competency levels? Also, assess your current operation to determine where you may need special skills or where you may have “skill gaps”. For example, you might discover that you will need a qualified buyer or a stronger financial person. Don’t hesitate to invest in high quality staff.
• Staff Training and Development: Once you’ve appointed the right staff, you need to decide what will staff training entail in terms of content and time allocated to it. Also, determine who will take responsibility for training. This is a vital component in setting up your business and it deserves a high priority. If you neglect the skills and attitude development of your people, you will neglect the growth and development of your business. It’s as simple as that. And yet, lack of staff training and development is one of the biggest mistakes made by entrepreneur
• Equipment: Determine the types of equipment that you will need and the specifications of this equipment. Where will you source it and at what price?
• Systems and Controls: You will need the appropriate computer systems in your business to manage stock, point of sale and financial recording. These systems should provide you with the necessary information to run your business at an optimal level. Without the right systems, your business will soon end up in a mess. Get at least 2-3 companies to “pitch for your business“. By that we mean, ask 2-3 companies to recommend the best systems for your business. The leading companies have had a lot of experience in helping new businesses get off the ground. Use their knowledge to help you. And before you hire them, check out their references.

The four most feared words in the English language are “Thecomputer is down”. You don’t want that to happen to you.

• Operations Manuals: The operations manual is your business bible. It should contain all information pertaining to the running of the business. It should also form the basis of all training. It is your business blueprint. It is the A-Z of how you do business. It is a guide that serves as a constant reference for your employees.

• The operations manual is a vital document and you should invest the right amount of time in preparing it. If the manuals are not developed yet, make sure that you provide for its development in your business plan, allocating the necessary resources to it.

• Transport: Determine the requirements you will have in terms of vehicles and other methods of transport. Do you need to be close to the airport and major highways? Do you need to deliver goods to customers? Or can you outsource this function?
• Warehousing: Determine your warehousing requirements. How much space do you need and what will be the ideal location of your warehouse? What are your security needs?

6. What marketing do you need to develop your brand names and ensure you achieve your projected sales forecast?

You need a marketing plan that will empower you to hit your sales targets and build your brand image in the mind of your target market. This aspect of your business is so important that we dedicate the whole of the next session to it.

7. Business Pre-opening procedures checklist:

We have included a detailed checklist in the Appendix for your personal use. Outlined below are some of the elements that you need to consider:

• Registration of company
• Name of company
• Registration of brand names
• Registration with statutory bodies (see Appendix)
• Administration staff /outsourcing this function
• Open bank account
• Telephones
• Fax

• Photo copies
• Financial package
• Print stationery, letterheads etc.

8. Budgeting your ideas:

At last, the brainstorming and thinking part of your business plan is over. Now you must translate your thoughts into a comprehensive, measurable budget to establish how much money (capital) you require to start the business, how much money you are going to make in the short term, and how you will generate an exciting return on your capital over the medium to long term.

As entrepreneurs we also want to know what ‘return on sweat’ we will achieve i.e. is all the extra effort going to be worthwhile because we will need to put in many more hours and cope with far more stress than we would working for a boss.

Possibly related posts: (automatically generated)
Making a Plan: how to construct a simple and workable business plan part 5

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• Making a Plan: how to construct a simple and workable business plan part 1
• Serious Selling Your Business part 2
• Serious Selling Your Business part 4
• You can capitalize the company with the minimum amount you believe is "reasonable."
• Serious Selling Your Business part 3
• Making a Plan: how to construct a simple and workable business plan part 2
• Making a Plan: how to construct a simple and workable business plan part 3
• It takes time so have faith: Six simple steps ( 1&2)
• Previewing the Business Plan: The Best Type for You

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