In any entrepreneurial venture, there is always a degree of risk. Entrepreneurs by definition evaluate risk and opportunity and then move forward.
Even with the best of intentions when you start a project, there are times when foundations may crack and you need to move on. Just as it is important to plan how to build a business, it is important to know what could be required to take one apart. You hope you never need to, but just in case, it is smart to be prepared for every circumstance, especially in times like these.
Set it up right from the start
Most businesses are formed either through incorporation or the formation of an LLC (Limited Liability Company). In the case of a corporation, there are basic documents or articles that lay out who does what, who owns what, and who is authorized and responsible for what. In the case of an LLC, the more simplified form of formation for a business, these may appear in the operating agreement. (Note, while operating agreements are not required by law in most states, they are a really good idea because they again lay out the foundational elements of your business and avoid confusion later on.)
Keep Excellent Records
Whether you are standing on solid ground or or a moving ice flow – keeping excellent records is a must. The most common organizational documents are contracts, letters, and financial records- but don’t forget your emails. Having a well organized system for important emails can go a long way in clearing up confusion. Emails document the business’ day to day activities, can point to agreements, clarify disputes, and should things go really wrong – serve as evidence of what was done and what was agreed.
Watch for tell tale signs
Set up a system to check your foundation regularly. Talk to customers, business partners, and suppliers. Are what you know and what they know in synch? When they are, your foundation is nice and tight. When you find gaps, you will find cracks. If you let them spread too wide, important information or opportunities can fall through. Too many cracks, and it all falls apart.
Be unfailingly honest…with yourself
Honesty with others is key to success; but, the most important person to be honest with is yourself. As entrepreneurs, we love our businesses. We enter with passion and excitement and hopefully over time we build something to be proud of. When we are infatuated with what we can do, we sometimes miss what is actually happening. That is why an honest assessment on a regular basis is critically important. If you choose to overlook key facts or flaws in your business, your model, or your team, you just might find that eventually you do not have a business, a model or a team.
If you catch cracks early, you have a chance to patch them. If you don’t…
Be sure you know how to swim.
Let’s hope the ice beneath your feet never starts to fracture. But if it does, having a plan in place and the right documentation can help you swim safely over to the next opportunity. They’re out there, you just need to find the right one.
Thanks for stopping by. Stay tuned….
I’ll be sharing more tips to help you get ready for 2011 throughout the month of December.
Joan Koerber-Walker
About the Joan:
An entrepreneur, author, speaker and corporate advisor, Joan Koerber-Walker’s journey has spanned from corporate America to entrepreneurship and non-profits, as well as into community leadership and into the halls of Washington D.C. To learn more about how CorePurpose and the CoreAlliance can help you grow your business, you can contact her by clicking here.
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