Many firms are operating on the assumption that how a business is incorporated affects the process of its long-term success. Many firms fail by becoming captive to the definition of corporate law or business development. Firms need to understand that they are exposed to new laws and legal environment on a daily basis, which can make their understanding of how a business incorporation affects the process of its long-term success more difficult. The fact that business development must engage with a broad range of topics, as well as the reality that the definition of which describes the process of how a business incorporates can change over time, means that firms need to understand that how a business incorporation affects its long-term success is not straightforward. A company needs to conduct periodic in depth research to monitor and in some cases to document changes in the definition of business development and corporate law.
Small firms may be best served by focusing their attention on two strategies: either developing their own strategy for how a small business incorporates or leveraging off existing business expertise and process innovation. Developing a strategic business plan requires upfront funding, which can be difficult for start-ups or existing firms in distress. For those firms that are able to draw on existing expertise, the challenge is leveraging existing business strategy to address new challenges and opportunities. Often this means engaging the services of firms that have the ability to both build new and innovative process and strategy structures to deal with rapidly changing environments.
For start-ups struggling with the question of how a business incorporation affects the process of its organization growth, it is important to understand that a small business strategy designed to address organizational complexity can be effective even when it is based upon a limited understanding of the processes that govern organizational growth. A good small business strategy will address the process by which a firm gets itself organized, from developing the board of directors, to developing management and leadership roles, to identifying roles and responsibilities of key personnel and finally to establishing processes for monitoring and measuring company progress. The fact is that many start-up firms fail to incorporate effectively because they fail to recognize that the development of their company growth agenda must include an analysis of how their organization progresses in terms of size, market share, market scope, competitive position and innovations. It may be helpful for start-ups to consider what businesses in other industries have done to address issues that they face in regards to being successful. In fact, it is likely that these companies have drawn on many of the same principles as start-ups in setting up their company growth strategies.
When starting a new business, start-ups should also consider how the question of how a business incorporates can affect the development of their firm in many ways.
- First, it is important for start-ups to understand the relationship between organizational size, market share and market penetration with respect to how the size of a firm relates to its potential for growth. There are many studies which describe how competition from existing firms affects market penetration. In addition, there are numerous studies which describe the fact that firms with larger market shares tend to allocate more resources to research and development while those firms with smaller market shares tend to be more aggressive in capitalizing on technology and new ideas. All of this suggests that the size of a firm impacts how the firm develops its business development strategy.
- Second, the ability to attract top management and top engineers who are the right people to solve a problem is crucial. Top management and engineering can impact the way a company grows because top management and engineers often determine the overall direction and vision of a business. All managers and engineers can be important sources of referral sources when a start-up firm is trying to develop its business development strategy. Therefore, developing strong relations with top management and engineers can be critical to how a start-up company grows. The fact is that although strong referral sources can be attractive to both start-ups and established firms, there are specific reasons why a firm needs to build strong relations with management and other key personnel.
Finally, the development of a business involves a process which can take time. Thus, old-fashioned referrals may not be effective for a start-up firm that needs to attract top management and other key personnel quickly. The need for fast organization progress strategy often explains why there is a need to develop effective and efficient referrals. Therefore, when a firm wants to develop a successful referral strategy, it must focus on attracting high-quality referrals from a diverse set of sources. This involves recruiting the right contacts who have the skills, experience and connections necessary to successfully promote a client firm and its products and services.