Skip to content

Setting Up a Small Business Infrastructure

May 18, 2008

Part II

The next two components to setting up the nuts and bolts of your business involve people and processes.

It’s important to line up your advisor relationships. Think of your key relationships as a group of advisors, whether that’s an official board or some of the people you work with on a daily basis.

Assemble a board.
You may not have one, but I highly recommend it. I found that one of the most important things in building both companies was having a board of directors. When establishing and growing a company, it's helpful to have people you respect and whose opinions you respect giving advice about business issues. But the most important thing I have found is that a board is critical for my accountability. Having a board of directors forces me to prioritize and have discussions I wouldn’t otherwise have. In short, it sets aside time for me to get out of the weeds and think more strategically about building my business.

Pick an odd number total of people for the board. (If you ever have a vote, you need an odd number.) Three is a good place to start. Hold regular recurring meetings to get the most benefit. Also, use the board for your network effect (See the post on The Network.) Because they’re tied into a wider network and can help with hiring and any kind of support you might need. BTW, never ever surprise your board. Board members understand that things happen but what they don’t want is to find out at the last minute. So when bad news is coming, involve them and get their help in finding the solution. You’ll get to a better solution and it is way less stressful for all involved.

Make friends with the landlord.
It’s very important to build a relationship with this person. I think of my father and his businesses: every time he needs more space, he calls the landlord and they work on it together. This has been true for me as well. Consider your landlord as part of your advisor circle. As you grow, you will rely on him or her to help with the physical aspects of the business.

Hire an attorney.
This depends on the type of business you are running. Does your company have special needs, like a product that requires patents and/or trademarks? Or, you may just need to have an attorney guide you through the process of becoming incorporated, or whatever your business structure is. I have always been fortunate to work with great attorneys that not only protect the legal interest of the business but also can provide valuable insight into growing the business. Think about it, a good attorney touches hundreds of businesses in his/her career and all that experience can be at your fingertips.

Work closely with an insurance agent.
Find an insurance agent to help you set up the company benefits. Once you have found that person, work together to set up your plans. Keep in mind that the decisions you make about benefits have long-term repercussions. For example, if you want complete health coverage for yourself and your family, when you have one employee will you offer the same to them? When you have 10 employees, will you offer it to them? If your company is only going to be five to 10 employees, which is the size of the majority of small businesses out there, you might not be as concerned about paying vastly different amounts (based on the family and ages of the insured) for the same benefits across all employees. But if you plan on growing bigger, then you might be concerned, for example, that those employees with families may have to pay significantly more. If so, you may then have to compromise on a plan that works for everyone. (I’ll talk more about health insurance plans in Part III of this series.) is an excellent resource.

Hire a bookkeeper and an IT guy.
I would argue that the two most critical pieces of your business operations are keeping your finances and your technical operations running smoothly. (Other than and Paycycle) the Bookkeeper List Web site is an excellent resource for securing your financial help.

For IT help, turn to any number of resources, including Geek Squad on a national basis, or any number of smaller, regionally-based software and hardware support companies.

Equip the office.
You don’t have to spend a lot of money to have a nice office. You can buy inexpensive furniture from IKEA or Costco, and keep décor to a bare minimum. I have done this at both companies and think it reinforces some important values for our customers and our employees. And we have managed to still make it nice.

For, we went for an open environment, no cubes, just desks and phones. We really lucked out because we got all the furniture in the office for free and at an enormous discount from a company that was going out of business. (I heard about this through The Network and jumped on the opportunity.) In addition, we got $150,000 worth of servers for $15,000. You’ve got to be prepared for moving fast on some of these things.

Stay tuned, we are not finished with setting up the business infrastructure. In Part III, we'll discuss the essentials of Tools, Benefits and Policies.


From → Uncategorized

Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: