What is business structure about?
Beyond people and the roles they play in business, structure is also about processes that are replicable and duplicable by others who come in to join the business. A process document for your business makes it easier for you to handover to someone else when you are not available. Even if you can’t afford to employ many people, you can have an advisory board members. You may not pay them, but they are there to advise you.
To do this, do a SWOT analysis for your business to know what you need in your business and what you already have. When you understand what your business needs, you can now choose people who can help meet those needs. For instance, if you realize your business needs the service of a finance person, get a finance person on your advisory board. Your advisory board members could be like mentors who have gained expertise in a field that your business requires help.
Business structure involves the little things, like registering a business name and opening a bank account in your business name, specifically for your business. It is also important to know that business structure evolves. They change with the economy. The legal requirements change too. Although, some things may still remain, for instance, the business name, if you decide to keep your business name.
Documentation is another important aspect of structure in businesses. For instance if you have a two years renewable supply contract with a hospitality organization, you can show your investors that you have a ready market for your products. This contract, in this case, is an asset for you. Why? Because the contract is documented. Without the documentation, there is nothing to show and there would be not track record to prove that your business is worthy of investment.
According to Aderinsola, here are some of the reasons why business owners must have proper structure in their businesses.
1. Entrepreneurs experience burnout when they have to oversee every aspect of their business alone. Imagine one person being the CEO, the social media manager, the accountant, the customer service person and more. This leads to unnecessary burnout and your business would not be able to grow as much as it is supposed to grow.
2. If you want to raise finance, no one would want to deal with you if you don’t have a structure. Where you are taking a loan or bringing investors on. You would also miss out on opportunities if you want to partner with other people or collaborate with other brands. For instance, you can’t franchise your business, if you do not have a proper structure.
3. Having your intellectual property protected is also part of the business structure. If you don’t have your intellectual property protected, people would steal it. You need to own it and have it properly articulated. If you don’t, then you are vulnerable.
4. For regulatory purposes, you can be susceptible to fines because you won’t comply with the laws if you don’t have a proper business structure, which has a negative effect on your brand.
Business structure is like a pain relief to the headache that your business could experience, it makes the life of the business less painful. Start putting structures in your business today and watch things turn out better in your business.