Resources underpin your organization. They set you apart from other firms that you are competing against and allow you to implement the strategy for your startup. This article explores five of the most important resources and capabilities for startup organizations.
Resource 1: Top management team
One of the most important resources for startups is the startup team. This may comprise the original founders of the strategy, who came up with the original idea for the organization, or people who were hired into the firm.
Your team is fundamentally important to your success – it is your team that will ultimately develop your product and service, build relationships with stakeholders to the firm, and be responsible for problem-solving the inevitable issues that your startup will face. Indeed, all the other resources that your firm will have or quire will come directly or indirectly from the team of individuals that you have in your organization.
Resource 2: Startup culture
Beyond having an experienced team in place, it is important that the team works well together. The culture within your firm is important – helping establish what is important for the firm. It is a lot easier to achieve your objectives if your team is working in harmony – with a clear understanding of what is important to organizational success. While some discussion and potentially disagreement is inevitable and may be needed to find the best solution, it is important that ultimately everyone is pulling in the same direction.
The culture of startups is regarded as one of the key things that can set small organizations apart from large firms. Startups lack the bureaucracy associated with large companies, and the culture can be a key reason why individuals may choose to work for a startup over a large company.
Resource 3: Network of contacts
While employees within an organization are clearly important to the ability of a company to achieve its objectives, companies also rely on networks of external contacts. From relationships with suppliers, potential customers, and possible future employees, the network of individuals that managers know can be critical to organizational success.
Contacts with other entrepreneurs can also serve as a source of knowledge, helping provide an outside perspective on decision making. Especially if you are pursuing a business alone, it is important to develop a network of contacts with other entrepreneurs whose skills and experiences you can tap into.
Resource 4: Finances
Another important resource for launching a company is the finance that will be needed to develop the product, buy materials, and grow the business.
Your need for financing is likely to be significantly influenced by your business model. Some firms can quickly be cash-positive, using retained profit from operations to grow the firm. Other firms are at least initially cash-negative – requiring constant financing to continue growth. This need for financing may be especially pronounced if there is a significant delay between you incurring the costs of your production (e.g., on raw materials or labor costs), and when you receive money from your customers (potentially many months after depending on your credit arrangements).
A large gap between when you incur your costs and when you get paid can mean that even if you are turning a profit, you may need financing to cover the short-term gap between the timing of payments.
Resource 5: Supplier relations, operations, and Manufacturing
A final resource that is important for startup firms is efficient operations – including relationships with suppliers, supply chain capabilities, and manufacturing arrangements. Your capabilities in this area (or relationships with others that you are working with to produce your goods) are an important resource for your firm.
There are several parts that you need to keep in mind when considering your operations:
- The efficiency of your operations: Are your operations efficiently set up, or are the opportunities for a competitor to be able to enter your market with more efficient arrangements, and in turn undercut your prices?
- The ability of your operations to scale: If demand were to increase, will you be able to scale your production with the arrangements that you have in place?
- The consistency of your products: Are your operations resulting in consistent output – both in terms of the quality of the product itself, but also in the time it takes to manufacture that product.