DaD on Incubation
Key elements to turn an idea into a good business plan. DaD shares with you some of the keys to successful incubation of a new business project. These keys are based on the experience of successful entrepreneurs who are CEOs of companies DaD has invested in.
1 To incubate well, you need to know the target market very well.
To incubate well, you need to be very familiar with the market in which you plan to launch the new company. And if this is a new market (not existing up until now), you will have to create a very detailed and thorough business plan, using figures from existing markets which you could learn from, in a creative and relevant way. In many cases, similar companies or markets exist in other countries. International research, adapted to the national reality, is also a very valuable source of information.
2 The business plan has to respond to a consumer need.
To incubate well, you need to be very familiar with the market in which you plan to launch the new company. And if this is a new market (not existing up until now), you will have to create a very detailed and thorough business plan, using figures from existing markets which you could learn from, in a creative and relevant way. In many cases, similar companies or markets exist in other countries. International research, adapted to the national reality, is also a very valuable source of information Sometimes, an idea can flourish at a time when the market is at a different level of maturity, but launching it too soon is a bad idea. The company needs to sell in a limited space of time, to sustain itself as a business.
3 The costs on which the business plan is based, have to be realistic.
The costs taken into account in the initial business plan have to be realistic, even conservative. Plans can never be fulfilled 100%, and you have to be prepared for the context changing. On the other hand, managing costs that are below the average costs on the market, transmits the message to potential investors that the entrepreneur does not know the reality of their market, and thereby reduces the potential for receiving investment for that project.
4 The structure of the plan is as important as the detail of its content.
When drawing up the plan, the solidity of the entire project is fundamental – that the plan is realistic and well thought out. And it is equally important to cover each of the areas included in the plan in-depth and applying great attention to detail.
5 The entrepreneur and his team are the most important variables, even at the incubation stage.
To progress with a new project, it is of utmost importance to have a good team of professionals, and for the team to be led by an entrepreneur (or entrepreneurs) with the strength and flexibility of character necessary for taking a business forward.
DaD on the team
How to create and manage a good team of people. “Anticipating the changes?,” Planning your development? DaD shares with you some of the keys to creating a good team, which is the most important variable in successfully moving forward with a new company. These keys are based on the experience of successful entrepreneurs who are CEOs of companies DaD has invested in.
1 The fundamental key to creating a good team is selecting the right people.
The key to creating a good team lies in selecting the people, and correctly defining the functions. It is recommended that the team is made up of profiles and talents that complement each other, and that all the members share human values (such as the capacity for sacrifice, entrepreneurial spirit, perseverance, flexibility and a liking for change, and seeking ongoing professional development..etc) which will be the basis on which the company’s culture will grow. The company’s culture is a weak, but also fundamental, variable. Therefore it is highly recommended to nurture and protect it – and listen to the team when it selects or rejects a candidate for a job based on their ability to fit into the company’s culture. To perform good staff selection, it is necessary to have a clear idea of the desired attributes for each position and use a selection method in line with what you are looking for
2 In a good team, the salary is linked to the contribution of each member.
The salary of each of the members of the team should be fair, and reflect the contribution of each job involved in the project, in both the short and the medium to long-term. When setting salaries, it is also important to consider how easy or difficult it would be to replace the people who occupy each post
3 Leading a team means understanding the differences between the people, and managing these differences.
To manage a team well, it is essential to understand the differences between what each member needs to progress in their job and feel comfortable in the company. It is important to listen to, motivate and manage each person in a different way, and it is extremely important to dedicate time to understanding and responding to these differences. This very personalized management of the team (without falling into the category of paternalism) is often even more important in a company that is starting out, in which peaks of work, difficult times and changes are part of the day to day.
4 The profiles of the team have to evolve with the business.
The profiles required will be different at each stage of development of the project. In the beginning, more multipurpose profiles are needed, and as the company grows, it will see a need for more specialists. Ideally, it is best to have profiles which are capable of evolving hand in hand with the company’s needs, but it is realistic to expect some losses. On the other hand, taking into account that salaries in a start-up company are usually lower than salaries in other sectors, the opportunity for constant internal promotion within the company is one of a start-up’s main weapons for attracting talent.
5 The leader of a start-up company requires specific attributes.
- 1) The ability to not give in to setbacks,
- 2) The ability to constantly identify realistic opportunities,
- 3) The ability to reinvent oneself in a pragmatic and effective way, and
- 4) The ability to keep the team motivated and focused on the project.
The main difficulty which an entrepreneur usually experiences when the business is up and running, is understanding the need to delegate after having fought, often like a lone wolf, during the period when the company was being launched.
DaD on Indicators
For monitoring and control, such as setting and managing the key business indicators (KPIs) DaD shares with you some of the keys to successfully introducing work processes and KPIs (Key Performance Indicators- which are the management indicators which enable you to see if the business is going in the right direction). These keys are based on the experience of successful entrepreneurs who are CEOs of companies DaD has invested in.
1 The indicators are the responsibility of the entrepreneur (and of the project leaders).
When launching a business, the management indicators are intuitive, and are in the entrepreneur’s head at all times. As the business grows, it is highly likely that these indicators will evolve, and it is fundamental that the entrepreneur maintains this awareness and grasp of all of them, and follows them as if they were a compass for their daily work
2 The indicators have to be used in decision-making.
There are usually 4 or 5 main indicators. Having too many indicators complicates decision-making and the ability for action (and reaction) to situations which arise.
3 The indicators have to evolve hand in hand with the business.
At each stage of the business, KPIs are going to be different, because the priorities will be too. During the launch, the most important aspect is effective growth through increasing the client base and generating sales, and the KPIs reflect this priority. In a second stage, sustaining growth and the business potential remaining scalable will continue to be important, in addition to the new priority of cost control, and the search for synergies – because costs shouldn’t grow at the same speed as revenues. Step after step in the development of the business, it is important to constantly keep experimenting, learning and refining the management indicators
4 The indicators are not always free.
Managing business indicators becomes more and more complicated as the business grows. And, although there is the belief that most indicators can be obtained through free sources (e.g.- Google, Alexa..etc), there are cases where it is important for some businesses to invest in tools for measuring and linking all the indicators. In reality, although entrepreneurs have a nose for analyzing the figures for their business, it is important that they know their limits, and involve experts in this area of management, so that they can offer their opinion. Involving experts can represent a significant investment- in both consultancy and in staff from the company, and it is advisable to include these costs in the business plan (at 3 to 5 years) for those seeking financing
5 For the indicators to be effective, they must be well-communicated within the organization, and linked to the pay of those technically responsible
It is essential that the entire team understands the extent to which their individual roles impact the management indicators, and that the results in these indicators are reflected in the company’s remuneration policy.
DaD on Realism
What forecasts take into the implementation phase to the diversity DaD shares with you some of the keys to successfully focusing the launch of a new business. These keys are based on the experience of successful entrepreneurs who are CEOs of companies DaD has invested in.
1 It is fundamental to focus on making the business grow, from day one.
The first priority is generating growth for the business, and sustaining this growth in a constant way. Growth, at the start, is more important than controlling costs. Managing growth on the internet involves generating traffic to the page, managing the quality of the visits (the frequency of visits, the duration of each visit, the way of navigating between the different sections of the website…), and, if it is an e-commerce business, maximizing the conversion of these visits into sales
2 You need to thoroughly manage the areas of operations, marketing and commercial development.
The key areas of the business, when launching a business plan, are operations, marketing and commercial development. For each of these areas, it is important to have KPIs ( Key Performance Indicators, which are the management indicators for each of these areas that allow us to see if the business is going in the right direction) readily at hand, to quickly see what is working and what isn’t working, when the business plan is implemented. Within a business plan, there are actions (commercial, marketing and technological development…etc) which are going to work, and others which are going to fail. Therefore it is very important, where possible, to negotiate the implementation agreements of these actions assuming both scenarios, success and failure
3 You have to maintain an attitude of constant learning, and fast reaction to situations.
From outset, it is important to have an attitude of constant learning- test actions, control their results. If the results are good, it is important to expand the actions quickly. And if they are bad, you have to cut short the actions, and launch other alternatives – have flexibility. React. Don’t remain paralyzed.
4 It is advisable to surround yourself with expert advisers from day one.
When implementing a business plan for the first time it is very important to have good experienced advisers, who you can learn from, and gain support from, on an ongoing basis. These advisers can be part of the new company’s own team, or external advisers.
5 The profiles of the team have to evolve with the business.
The team which the business is launched with consists of, above all, multifaceted and multidisciplinary profiles. And as the business grows, these profiles will start to specialize. The ideal scenario would be to have a team which can, as a whole, grow and evolve based on the company’s needs. However it is realistic to expect several losses along the way. At times of exponential growth, operations suffer, and it is very important to find the balance between the suitable growth for the team, and the management of human resources that allows for keeping the team united at times of excess of demand.
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