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Order Of Operations For Starting A Startup

September 28, 2023
Bill Kimball

Employees know where they are expected to be and when they are scheduled to take lunch or dinner breaks, and the manager knows where the employee should be. When operational questions arise, the manager knows who was scheduled to be at the site and can go directly to that employee. To run a profitable SaaS business, you must be able to recognize where your costs are coming from, or how much capital you need to operate. Start by familiarizing yourself with the fundamentals of Monthly Recurring Revenue and Annual Recurring Revenue , gross margin, expenses, and cash flow. They need to truly integrate into a small team, be willing to problem solve and go beyond their job scope to get a product released on time. Hiring the right developer isn’t all about their tech skills, though. They need to have strong communication skills, be able to work in a team environment, and an eye for detail so they can pick up on product problems.

Moreover, failing to terminate a family member for cause will predictably destroy morale among nonfamily employees, especially skilled employees. —such as for land, buildings, equipment, and machinery—should be paid off through long-term financial instruments that are known as secured debt.

In a startup, you have the opportunity to create and shape your future company’s culture. Start off the process by identifying the values that are important to you and are relevant to your product. Afterward, take those values and find ways to integrate them into operations. For sustainable growth, make sure your startup operations and organizational structure can grow into your future vision. Whereas the value chain strategy is the domain of quiet achievers, entrepreneurs who choose and succeed with an architectural strategy tend to have very high public profiles. This strategy allows start-ups to both compete and achieve control, but it is out of reach for many if not most ideas and incredibly risky when it is feasible.

It is imperative that each of these goals is patently understood and achievable for both the sales force and the company before the sales force is assembled. For unique or specialized products, some vendors will require a deposit from the customer before the product is made. This deposit reduces the financial risk to the vendor for a custom product that may be difficult to resell if the original customer backs out of the purchase. It also provides cash to the producer, who needs to buy raw materials to make the finished product. For the startup entrepreneur, paying for products beforehand could strain the cash available for ongoing operations.

There Are Three Broad Areas Your Role Might Fall Into:

A pedestrian approach can nevertheless create very lucrative businesses. Consider Foxconn, the Chinese electronics manufacturer, which is one of the few global companies that can bring new products from Apple and others to market at scale and on time. The identity of such corporations arises from competence rather than aggressive competition. And although value chain entrepreneurs are driven by the customers and technology of other companies, they focus on developing scarce talent and unique capabilities to become preferred partners. Is there a way to think through your strategic options without slowing down the process too much? It delineates four generic go-to-market strategies they should consider as they move from an idea to the launch stage, each of which offers a distinct way for the venture to create and capture value. While others might just credit her capabilities, she’s quick to cite the plan that CEO Chad Dickerson laid out.

start up operation

Entrepreneurship education is effective in increasing the entrepreneurial attitudes and perceived behavioral control, helping people and their businesses grow. An example of group-based experiential startup training is the Lean LaunchPad initiative that applies the principles of customer development and Lean Startup to technology-based startup projects. Founders or co-founders are people involved in the initial launch of startup companies.

Make Operations Your Secret Weapon

When a company is liquid, it can meet its financial obligations on time, typically on a very short timeline. If the company pays its bills on time, the risk to lenders is lower, so lenders charge lower interest rates; insurance companies may set lower premiums; and vendors may offer cash discounts for early payments. Maintaining liquidity is vital to the success of a small business, as it may have limited access to other financial options. I’d like to offer an alternative to the conventional “great idea” theory of startups for first time founders to consider. This guide can help you walk the path from nothing to a launched minimal viable product .

  • In the early stages of a startup, it’s unlikely the company will have funds to bring on customer support staff.
  • With both “voice” and “choice,” employees valued their work more and bonded with peers and the company itself.
  • With effort and determination, leaders can nurture and protect what’s right and true in their organizations.
  • In some areas it practiced radical agnosticism, abandoning or altering plans as necessary.
  • The organization, structure, and role of the sales force will depend upon whether the business is in the startup, growth, mature, or decline stage).

High context cultures with an emphasis on people-focused operations favor collectivism. As a result, leaders in such startups seek validation from colleagues, friends, and mentors. Whether you want your startup operations to be process focused or people focused depends on the cultural context. Therefore, be aware of how you communicate cultural elements as it influences operations. On the other hand, low-context cultures are process focused, relying on facts instead of emotions. They need validation in tasks and center the customer in all operations. What set apart successful firms was the creativity and autonomy employees showed.

Company Type Affects The Definition:

Most founders believe their start-ups are about more than their business models. Still, every strategy affects possible future pivots, removing some and opening up others. A venture must be mindful of this so that it doesn’t raise future costs but does enable opportunities to move from the start-up to the scale-up phase.

start up operation

Every machine will become obsolete at some time and will need to be replaced. Having the latest, greatest piece of equipment may be a temptation that your bank account cannot afford. Replacing equipment, whether major industrial equipment that needs professional installation or office equipment that can be set up by employees, is a critical decision. Too often, the criteria for selecting new equipment are the same criteria used to describe the old equipment’s ability. Using old job requirements for new equipment may be acceptable in an industry that undergoes very few changes over a very long time. However, most industries change drastically and need up-to-date equipment.

In the innovation space it’s easy to get overwhelmed by the apparent range of opportunities. Entrepreneurs fear that spending too much time weighing the alternatives will delay commercialization. The strategic commitments they make in moving forward limit their ability to pivot. The Syracuse University professor Carl Schramm argues that contrary to the teaching at many business schools, entrepreneurs really have no alternative to learning by doing. We all have those lingering items in our inbox or to-do list that we push off or tell ourselves ‘I’ll do that tomorrow’ but never do. It may be you don’t have enough time, but there’s likely a skills gap you need to admit.

How Agile Can Improve Startup Operations

The message is “We think you’re really good at what you do,” according to chief talent officer Jessica Neal. “We’re not going to mandate how you do it, but we’re going to trust and empower you to do great work.” Internal recruiters hire employees who fit in with this culture and train them to navigate it. And CEO Reed Hastings and other leaders have implemented a range of policies designed to enhance voice and choice.

Operational Business Plan

In startups, many decisions are made under uncertainty, and hence a key principle for startups is to be agile and flexible. Founders can embed options to design startups in flexible manners, so that the startups can change easily in future. This is more of an internal motivation, a psychological approach, which the leader develops via words and actions.

For the new entrepreneur, hiring people you know is appealing because it is easy, they are typically very amenable in the startup stages, and they share in the excitement of the new business. Entrepreneurs not only create new products and services, but also redefine the problem. They may need to make adjustments to resolve other environmental factors. For example, there was no need for paved roads before the advent of cars. Businesses that provide gasoline and repair work for automobiles were not necessary before the automobile became popular. The mass-produced automobile changed more than how a product was manufactured—it changed the way people moved.

A schedule of regularly planned maintenance that includes preventive repairs and inspections will reduce unexpected down time and equipment failures. Scheduling repairs before they are necessary keeps equipment running efficiently and smoothly, helps reduce costs over the long term, and allows for better management of expenses. Unexpected equipment failures not only interrupt operations but can delay delivery of products and services to customers. This can diminish your reliability and negatively affect customers’ confidence in your trustworthiness, potentially affecting future sales. Then they’ll launch it, try to raise money, and build out a tech team. The problem there is that good investors are actually investing in the team you’ve built. If you are building a tech startup and no one on your team can write code or do the technical work necessary, the bar to raise investment is much much higher.

Managers know that each task has a person assigned to it, and employees know where they should be or what they should be doing throughout the day. Complex businesses with many employees and many functions need more planning and structure. However, a written plan should list most tasks and activities that need to be accomplished, who will do them, and when. We also discovered that the best way to lower our fees from a banking perspective was to avoid currency conversion fees.

Think of it like a puzzle where your COO will fill in the missing pieces to round out your leadership team. Return to them and note how they structure your day and management style. Design thinking is used to understand the customers’ need in an engaged manner. Encouraging people to “consider the opposite” of whatever decision they are about to make tends to reduce biases such as overconfidence, the hindsight bias, and anchoring (Larrick, 2004; Mussweiler, Strack, & Pfeiffer, 2000). Employees will work for their manager because they are obligated to on the basis of assigned roles and positions of authority.

Build A Moat Or Storm A Hill?

We’re going to take a look at nine essential roles in a startup company, and what it takes to make each of them successful. This section could use an essay of its own so I’ll only touch lightly. In a small company its highly likely your operational role will have a fairly sizeable strategic element. The diagram below shows a rough overview of the activities involved in strategy formation and implementation. So if you want your toy manufacturing startup to be the epitome of fun, your culture needs to be fun.

That being said, you still need someone with the technical skills to ship the MVP. At a startup, the VP of sales doesn’t have the luxury of case studies or customer success stores to lean on when they’re prospecting. Instead, they need to convince prospects to take a gamble on an untested product, an unknown company… and hope it pays off. They need to be focused on closing as many deals as possible, and do whatever it takes to make it happen, so the company has a chance at surviving. In the early stages of a startup, a CTO must be willing to pull up their sleeves and do some heavy lifting to get a product or service off the ground. This means juggling different roles and being a master of all things when it comes to tech, including coding. While a CTO needs to lead the startup’s engineering team, it’s also their job to also focus on what the customer wants from the end product, and use that to increase the company’s revenue.

Likewise, raw materials and supplies may have a price decrease because of shifts in the value of money. Is any legal instrument that can be used in the exchange of goods and services. Money includes paper money or coins, but it also includes checks or money orders. In developing countries, money might be any physical item that is considered valuable to people wanting to exchange some goods or services. Developed scientific management to introduce organization, scheduling, coordination, standardization, and cooperation among workers into the production process. Taylor saw a production plant as a large, multifaceted organization with many interrelated activities that should function as one large machine.