One of the most genuinely useful pieces of advice I can give you, is to write up a ‘what if’ document when starting your Company. This can prove to be an invaluable document to reference down the line, particularly when you have co-founders/partners in crime!
We all know it’s good practice to put together a solid business plan. Before you get too scared off, a business plan doesn’t always have to be this intense corporate speak document. A couple of pages going over a vaguely thought about plan and basic financials can often be up to the job, particularly if you’re a small business. My advice, write it as you would say it and get rid of jargon and meaningless corporate speak.
Prepare your escape routes
You don’t start up a Company to fail and I’ve every confidence with the right planning, you’ll be able to create a sustainable business. But it’s a very sensible idea to think about what might happen if things don’t go to plan or if your circumstances change. May be you fall out of love with what you're doing, you start a family, society collapses etc.
Scenario 1 - What happens if the money dries up?
This will likely mean you have two options. Either find some additional money (legal means please) from somewhere to keep going or call it quits and dissolve the Company. If you end up going down the latter route you need to establish what happens with any money and liabilities that the Company has. There are dedicated insolvency firms out there if the set up you have is more complex than you can personally handle.
Scenario 2 - You or a co-founder want to leave
This can be a tough one to navigate with an agreed plan, let alone if you haven’t already spoken about how this may work. I implore you to go into starting a Company with openness and transparency with your fellow founders. Peoples wants, needs and circumstances change over time so it’s only reasonable to sensibly figure out how an exit would work. Basically, if you avoid managing it like Brexit is handled then you'll be winning.
Having gone through the process a couple of times, it can be a stressful period as you balance your needs with that of your fellow founders. There’s a very high chance you’re going to be good friends so you want to make sure you come out of the exercise with this still intact. Too many times I hear of people splitting from Companies acrimoniously. This almost always comes down to miscommunication and a mismatch of expectations, all because these things weren’t discussed and agreed beforehand. Your lives could literally be on the line if you don't have an agreed plan during an upcoming zombie apocalypse!
Remember, it’s very easy to get caught up in the excitement and enthusiasm of starting a new Company. Don’t temper this but please do discuss and agree the 'what ifs' at the start.
Scenario 3 - Getting bought out
Congratulations, if this happens this likely means you’ve got a nice wad of cash in your back pocket and are ready to hit the casinos. Either way, it’s well worth agreeing with co-founders what the plan of action is here. You need to make sure you’re all on the same page. You don’t want to be in the situation where one of you really wants to grow and sell the Company but the other wants it to be a lifestyle business.
I’m a one-man-band, what’s the point?
If you're asking what's the point of existence then that's an answer for another time... but just because you don’t have any co-founders to consider doesn’t mean there are not multiple scenarios and situations that could crop up. This is where a ‘what if’ document can still have a valuable space in your Company preparation.
You should include these ‘what ifs’ within your business plan or if you want to get slightly pretentious like we have in the past, call it a manifesto!
We’ve been a Company for years, is it too late to write ‘what ifs’?
Short answer to this is no. It’s 100% not too late to talk about this with fellow founders and come up with agreed plans of action. Your life may depend on it! Well, Okay that is a little over the top but it's still important.
Check and update every year
Once you’ve put together the ‘what if’ scenarios it is very easy to simply forget about them and watch the years roll by (apparently forgetfulness is a symptom of ageing). It’s a great idea to use these as part of an annual review you have of the Company with yourself and any co-founders. You can update the ‘what ifs’ accordingly if people and situations have changed.
You can’t control everything
There are thousands of outside influences beyond our control, whether they be political, environmental or personal. Don’t get hung up on what you can’t control but embrace all of those things that you can. As long as you remain in a positive frame of mind and share common goals with co-founders you won’t go far wrong. Honest.