BUSINESS PROCESS SOLUTION

Diligence and Compliance: The Keys to Startup Success

Thamonwan Chuenchit Thamonwan Chuenchit

Startups tend to be comprised of young, dynamic people who are passionate about their work and emotionally invested in the company’s success. However, as the business grows more complex and market conditions change, startups sometimes struggle to implement proper processes.

It is here that many fledgling companies begin to go off-course. Failure to organise the business correctly and make necessary adjustments can lead to slowdowns in workflow, stalling the organisation just when it is most in need of momentum. Lapses in regulatory compliance are another common side effect of inexperience, resulting in fines and loss of investor confidence.

Having passionate workers is excellent, but startups must also implement clear strategies and efficient processes in order to ensure both regulatory compliance and long-term success.

Finding the right path

Most startups eventually fail, yet all of them begin with visions of success. Poor planning, lack of proper marketing, and strong competition can all weigh down a new business until it goes under. Yet even when a company avoids all these hazards, success is by no means certain.

Businesses that experience early success in the marketplace oftentimes decide to scale up too quickly. In many such cases, company leaders become overconfident, misjudging the market and investing in the wrong avenues. It takes a steady hand to guide a business through its early stages, where there are simply more ways to fail than to succeed.

Fortunately, many have walked this path before – and there is much to learn from their mis-steps as well as their achievements. Among the key variables for startups is financial acumen, a crucial skill for long-term success. A company can be highly profitable, yet still fail if it does not manage its money properly. Shrewd investments can help, but they are only part of the story; startups must also keep meticulous internal records, and stay abreast of any relevant regulatory developments.

In Thailand, for example, the government recently enacted the Personal Data Protection Act, the Cybersecurity Act, and new merger amendments to the Trade Competition Act of 2017. All of these regulations could potentially require significant action from startups.  

Failure to comply with regulations can sink the company even faster than having a shoddy product.

Aside from being a legal requirement, complying with financial regulations is simply good business practice. Keeping sound financial records and conforming to all applicable laws will build a good reputation with current stakeholders as well as potential future investors.

An organisation’s reputation is its most valuable asset, especially during the early stages, as the company’s own employees are also acutely aware of it. If the organisation has a stellar reputation for good products, excellent services, and above-board legal compliance, this knowledge will inevitably have a salutary effect on both employee morale and productivity.

An experienced guide can show the way forward

There is a tendency among many startup leaders to think they need to do everything themselves. While the do-it-yourself spirit is commendable, there is no shame in enlisting outside help when it is needed.

If the startup’s leaders recognise they need outside assistance in managing the business, there are essentially two options available: recruiting a management consultant or outsourcing. 

A management consultant can asses the current work processes, identify key issues and pain points, and propose solutions. Recommendations can include business process improvement, organisational restructuring, and digital transformation. The consultant can also stay on as a project manager to ensure the successful implementation of their recommended processes and systems.        

Outsourcing can be the smartest choice in many situations. For example, many successful young companies quickly outgrow their existing accounting capabilities. As profits increase and the business scales up, company leaders often begin to realise that their once-reliable accounting system has become a burden.

By outsourcing non-core activities, such as accounting and human resources, the organisation can comply with laws and regulations much more easily, while simultaneously freeing up employees to innovate and focus on their strengths. If even large multinational corporations can benefit by enlisting outside help, then the same such experts can surely provide valuable assistance for a startup.

The best path for a company is not always easy to see, and many highly promising businesses have stumbled and fallen before they were able to reach steady ground. Yet their failures need not be yours, and there is much to be gained by standing on the shoulders of giants. With the right people, the right processes, and the right strategic partners, startups in any industry can set themselves up for long-term success.