building and cranes

Startup Planning Questions: What to Do Before the Launch

by Larry Sharp

 

What is the opportunity?

By failing to prepare, you are preparing to fail.
– Benjamin Franklin

IBEC’s first consultant and later CEO, Ken Leahy drilled into me, “You do not have a business if you do not have a customer”. Since then the key question for me is to identify a meaningful business opportunity early on. Vision is important, but it cannot be the key component at the beginning. Do you have a customer? What is the problem to be solved? The answer can be derived from research and counsel, but it is important to determine the need for the product before moving too far toward planning and product development. Some call this the value proposition and it articulates why customers need the product or service. With no need, customers will not pay, and without sales, there is no business.

A couple planning to start a business in a large Asian country came to us with an idea. They planned to make wedding dresses in the country at a low cost and market them in the USA for considerable profit. The idea sounded good to everyone they discussed the idea with. Fortunately, they retained a consultant who pushed them in the direction of robust research and analytics. The day when everyone realized there was no ‘business opportunity’ here, there was sadness and tears – it seemed to be the death of a dream!

Fortunately the couple accepted the result and turned their attention toward a government website which clearly stated a need in the area where they planned to live. They and the consultant began to focus on the opportunity and before long they were living in-country running a tour business, selling tours at a 50% margin.

Then on the missiological side, is there an opportunity to reach an unreached people? Is there an opportunity to transform a community? Can the missio dei of God be effectively integrated into the business?

Another component of this relates to the variables going into the process. Is the practitioner convinced he/she has the ‘wiring’ for business? Are they convinced that God is calling them to this endeavor in this country and with this people group? Are they prepared with appropriate studies, competencies, gifting, personality, abilities and experience – both for business and for mission? Is this the opportunity for them and at this time? Too often people do not realize that running a business is a full-time job – but it is a job that allows one to live out kingdom values for the glory of God!

What will the end look like?

If you don’t know where you are going, you’ll end up someplace else.
– Yogi Berra

Here is where a little ‘visioning’ takes place. I like to ask the entrepreneur or business leader, “If you leave this country in ten years and never return, what do you hope will have been accomplished during the next decade while you operate this business?” Most missional entrepreneurs do not plan to “flip” their business  to a new owner any time soon, but most are not going to be their for life either.

This is where we remind the client of the “Quadruple Bottom Line” of good business as mission.

1. What will profitability and sustainability look like? Will there be a succession plan? What will be a training plan? How will change be managed? What is the exit strategy if you are successful? What if something goes wrong (risk analysis)? Will the business scale? What will you do with profits?

2. Will the business create jobs? We often speak of the Great Commandment of Jesus which includes the part about loving your neighbor. In a world of poverty, injustice, and unemployment, job creation is “what Jesus would do”. Will this business create jobs?

3. Will the business create spiritual capital within the business and the community, and provide a climate for making disciples of Jesus? Is there a good clear pathway to create and live out kingdom values?

4. Can this business grow while the owners maintain their commitment as good stewards of the environment, of the gospel and of righteousness? Can it offer foretastes of kingdom realities? Is it reasonable that we can be righteous throughout the history of the business? Amy Sherman in her book Kingdom Calling calls this the “tsaddiqim” from Proverbs 11:10.1

In IBEC we call this 360 degree success.

Currently it is a problem that many small business startups in BAM are initiated by mission-trained people who – have the advantage of language, culture-training, love for people, passion for truth, but – have limited or no business acumen or experience. They tend to think, “I have been successful in learning a language, living in a foreign culture, and in influencing people, how hard can it be to start a business?” Wrong! In the history of IBEC consulting, the businesses started by missional people who tended to devalue the importance of business competence, training and experience, more often failed than succeeded.

Such was true for a project which started out as an NGO effort to purify drinking water. Because the large Asian country decided they were going to stop issuing visas to NGO practitioners, IBEC tried to help this worthy effort to become a for-profit business. It was very difficult because the owners were trained and prepared for NGO and mission work and it was hard to identify with the business community, develop business skills, market the product, legitimately qualify for a business visa and achieve the Quadruple Bottom Line. In the end the business, which had potential, did not succeed, even though the NGO water company had a viable product, an obvious demand, and the owners were skilled in the product.

Read Part 2 – Startup Business Planning: Discovering Your Business Model

Larry Sharp is the Founder and current Director of Strategic Training and Partnerships of a Business for Transformation (BAM, B4t) consulting firm, International Business and Education Consultants (www.ibecventures.com). Larry served 21 years in Brazil and then 20 years as Crossworld VP of Operations and as Vice President of Business Partnerships. He is currently a VP Emeritus and consultant with Crossworld. Since 2007 he has devoted energies toward Business as Mission (BAM) and currently is a consultant on BAM and education themes. Larry travels within North America speaking and teaching in conferences, colleges and churches on themes related to Business As Mission (BAM, B4t) and missions.  His travels abroad relate to BAM, crisis preparation and management, and team building. 

 

1 – Sherman, Amy L. Kingdom Calling – Vocational Stewardship for the Common Good. IV Press, Downers Grove, IL. 2011.