Phase 1 – Start Up
The start-up phase represents the formation of the new business.
The owner (The technician) has an idea. That idea is also wrapped within the owners personal goals. Remember it is the technician in us who starts a business, i.e. the accountant, plumber, hairdresser, architect, tree lopper. Whatever skills possessed personally, represent the only resource that are available, obviously technical skills are at the centre of the start-up phase.
Here is the first mistake contained in the traditional planning process. The owner needs simple plans that set up goals for Direction and Income. Firstly because without cash – the business hits that first barrier really fast. The second is the technician has no skill or capacity to use sophisticated tools outside of his or her particular existing skill set.
Therefore, the simple business plan should concentrate on defining the business and its product or service and getting the first customers. Because the owner is essentially using their “technician” skills, management activity is rejected in favour of the more immediate physical and emotional activity involved in physical labour.
Growth is as a consequence of the creativity of the technician/owner. At this stage the owner is very reactive; building a capability to react to fluctuating and changing demand becomes a real slog; ensuring that the limited funds and resources are spent “right” is essential.
The crisis, when it comes is one of confidence – losing the dream. The promised benefits are dwarfed by uncertainty, long hours of work and modest wages.
Survival and entry to phase two depends upon income from the immediate marketplace reaching adequate levels.
Obviously I have adapted Carl Gould’s underlying directions with knowledge gained in my travels. I still encourage people to read Carl’s book and there are a few others like Alexander Osterwalder’s 2009 book called “Business Model Generation.” Looking forward to your comments and going a bit further in my next blog. ~ Kevin
Some interesting texts the author recommends are:
Gerber, M. (1998) The E-Myth manager: Whey Management Doesn’t work and what to do about it, Harper Business, New York
Gould, C. (2010) the seven stages of small business success, Keynote Publishing, Charleston
Greiner, Larry E., Evolution and revolution as organisations grow (1972) HBR
Reynolds, S. (2010) Why People Fail: The sixteen obstacles to success and how you can overcome them, Penguin Group, Sydney
Tan, J., Fischer, E., Mitchell, R., & Phan, P. (2009) “At the centre of the Action: Innovation and technology strategy and research in the small business setting” Journal of Small Business Management 47(3):233-262