What is the main step in starting a new firm?

The establishment of a new business requires a solid Strategy document. Michael Porter is considered to be the father of modern Strategy Management and is model "The Five Forces for Competitive Advantage" are still followed up till today as a core constituent for strategy development.

 

Accordingly, a robust strategy document should mainly include:

1. Economy Outlook: Encompassing Global economy down to the country/countries of strategy implementation and the economic dynamics of the business in question;

2. Regulatory Outlook: Encompassing the main regulations governing and affective the business in question;

3. Power of Suppliers and their expected effect on the success operation of the business;

4. Power of Customers assessing the expected demand of the products or services the business intends to offer;

5. Effect/threat of Substitutes and Complementary products/services.

 

In addition, a strategy document must assess the "Core Competencies" of the business and how it should be able through such competencies to survive and compete to achieve the desired business targets. This would normally include a "Vision", "Mission" statement and a set of business "Objectives.

 

The strategy should dwell down on the Operational and HR structure to achieve the desired business targets while ensuring effective cost control.

 

Finally, the above gets reflected and capsulated in a financial plan that depicted the business targets and expected costs to achieve an acceptable Return on Investment (ROI) to the shareholders/owners of the business.     

The main step for starting a new firm is the creation of the "Charter" document which will provide the main details of the justifications, needs, resourses, management, deliverables, assumptions....Etc