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3 Tips to Build Better Business Structure
Once you have completed all the hard work from business start-up through to the stage where you start building a team, or you have a recognised team after many years in business, composition becomes very important.
The right composition will help you grow the business further, control an ever-growing team better, and allow you as the CEO to be less operational and more strategic.
The following are my top three factors when creating a more solid composition for your business:
1. Role of the CEO/Owner of the business
This sounds evident, but when you're in the thick of daily operations and hoping to keep everything running and on the right track, few business owners stop and assess their own role.
When you start building a team or you have an established team, your own role has to change as you generate more people. You need to become the CEO rather than load the role that many do of basic manager involved in everything.
You will need to change your target to more strategic matters like financing for expansion, evaluation of progress opportunities, and creating a strong team that can little by little dominate your operational role.
Don't make the error of wanting to create a team without moving your own role to ways to best add real value to your small business.
When you get to point 3, it'll be clear if you need to change your own role.
2. Legal Ownership
I'm just heading to assume you have a restricted liability legal entity for your business framework, and also have the right legal and financial composition in spot to protect your business and personal resources.
The other form of legal ownership is collateral, usually when who owns the company needs to 'lock in' good employees or praise those who succeed.
Once you give worker equity in your enterprise, you set a precedent for others to follow. How much show of your business are you prepared to give others, on what basis will they earn it or buy in, what framework will you create for shareholder voting privileges, do all collateral holders have the same weighted shareholding, etc.
And finally, what goes on when you yourself have a falling out in clumps with one particular employees, so you can't shake them off because they're an equity holder in your business. It happens.
You might consider two other choices: prize good performance with a benefit system or bonus offer incentives. The other option to compensate those who have contributed to the growth and success of your business by offering to sell your enterprise to them when you're ready to walk away.
Please remember, not everyone needs to have collateral in your business, and too many people hardly understand that equity includes obligations and legal tasks. Think twice about this strategy.
3. Your Company Chart
Often people don't bother with this as it's 'too formal' or 'too structured', but an organisation chart is a test of how well you've set up the framework of your business.
If you draft your map of the company and you have bins/roles with spaces and no-one to fill them, or you have others usually the business owner in more than one box, then your framework is not setup for future growth.
The main element people who article directly to the CEO or business owner, have to be able to take responsibility for his or her area, and never have to defer to the CEO on the majority of decisions or problems.
When you have the team set up and you find they still have to visit you for advice Accountants in North Sydney on a regular basis, you need to factor in some more experienced and capable people into the structure.
