What you truly need is sufficient capital and an inspiring business plan.
by Andrew Silberman
You've read the story, "How to Incorporate in Japan," and perhaps attended the JETRO presentation in July. The word is out: whereas in years past you needed ｴ10 million in capital to start a Japanese corporation, now all you need is "ONE YEN!" Yes, you heard me correctly - "ONE YEN!"
Everyone reading this article has a yen to spare, and more than a few good-to-great business ideas. Heck, if you're the publisher of this magazine, you've got at least 30 of each. But that one yen and your business idea and another Y119 will get you a coke from a vending machine. You'll need a solid plan for the successful launch of a business.
A Capital Plan
The two biggest problems a new business faces are the same as they were 20 years ago (when I heard them at business school), and probably 200 years ago: undercapitalization and lack of a clear business plan. This one yen bonanza may only exacerbate the problem; at least you used to have to come up with Y10 million. Question: which business is more likely to be undercapitalized, Business A, with Y10 million paid-in-capital, or Business B, with one yen paid-in-capital? And for which business is the founder likely to spend more time on a detailed business plan?
Answer: it's the same company.
As for the business plan, I'm not talking about the type that Barry Givens says would "make God really laugh." I'm talking about, first, articulating the purpose of your business in a way that distinguishes it from others and makes it easy to recite by every one of your employees, clients and vendors. A tip: "Being the best _____ (fill in the blank) in the industry" doesn't cut it. Nor does "making a profit" or the more direct and honest "making a ton of money." That's like saying the purpose of your car is to hold gasoline. Yes, you need profits, but that's not the purpose of your particular company any more than the purpose of your life is to eat, drink and breathe.
Vision, Mission & Values
What you really need, besides the "one yen," is enough capital to get started and a business plan that motivates you and your team and makes your customers want to do business with you. You also need to be able to communicate your mission in a clear and compelling way.
"What makes you different from other sports agencies?" I asked a budding entrepreneur about two years ago.
"That's easy - our values."
"So what are the specific values that distinguish you from other companies?"
"Uh, um, well, it's all of them."
"If I ask your staff to name your company's guiding values, what would they say?"
"Well, we haven't really shared them with everyone..."
Before you laugh off this ill-fated entrepreneur (struggling to keep his business together after all his key managers quit last year), let me ask you some questions. Can you describe the purpose of your company...in 30 seconds or less? Is it a compelling story? Can you tell me the top three (or five or seven) values that guide (or will guide) your firm's actions? Do your managers share them? Do you even know your managers' guiding values?
You see, that's the big mistake firms of all sizes make. They think that by writing up a mission or a vision statement, or a set of guiding values, they are now a "values-driven" company. But are they really? Everyone has a set of guiding values, whether they've articulated them or not. But just because you've tacked a statement on a wall does not mean all employees share those values. If you're in the early stage of starting a business, you must take time to discuss your values and those of your senior managers/partners. This makes them real.
Those core values can be the cornerstone of your whole business. They will shape the way you sell, the way you present, the way you evaluate your staff. And they will guide your growth, no matter what level of initial capital you choose to invest. JI
Andrew Silberman is president and chief enthusiast for Advanced Management Training Group (http://www.amt-group.com), Developing Global Thinkers since 1992. He's the author of Andrew's Ax, a monthly newsletter you can subscribe to (free!) by writing to firstname.lastname@example.org.