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Following the “ALAP” Model (As Little As Possible)

September 15, 2014
By Charlotte Baker

With resources like time, money, and preservation of equity often in the balance, making as little as possible (ALAP) your business mantra might mean the difference between shutting it down and start-up success. In remembering the lessons learned in my startup years across several companies, ALAP is the most valuable concept I can pass along to the early stage entrepreneur who is passionate about gaining momentum. It’s simple and the best path to get from “Concept Company” to a “2nd Stage Business” that is ready to scale.

ALAP allows you to focus keenly on what counts at a time when you only need to be “roughly right” to get your company off the ground. Precision is not the end game of the early stage entrepreneur as there are too many moving parts. During this stage of ambiguity you need only figure out what works and focus on getting to the next stage.

Here are the main areas entrepreneurs can apply the ALAP model for maximum impact:

  1. Focus. Revenue and cash flow are the only two elements you need to focus on during the first phase. Don’t make the mistake of getting distracted by other issues that are far ahead on the horizon. By focusing relentlessly and only on revenue and cash flow, the other aspects of your business will follow if these two main objectives are aligned.  At the concept stage, don’t be distracted by the corporate cloaks of employee handbooks, elaborate marketing plans, sophisticated contracts and employee reviews. Get it off the ground! Prove the concept works.
  2. People.  Surround yourself with people who know the things you don’t. You want people who are smarter than you -- self-starters who won’t distract you from focusing on things like revenue and cash flow. Trust these people to take care of the details of the business. There are other options as well.  For example, call on friends to help. Can a friend review your website in exchange for a nice bottle of wine? Perhaps you know an attorney whom you can ask about intellectual property or trademarking over dinner. There are also people who will work at a fraction of a cost:  ask a law student to review your contracts, pay a student to do administrative tasks or get an intern. You’ll get much needed and cost-effective help and they’ll benefit from the experience. Also consider where you can outsource to experts to save costs, time and energy. To this day I still extensively outsource legal counsel, accounting and HR even though we could well justify these departments in-house. Why? Because we focus on our core skills obsessively and there is little reason to build these skills in-house.
  3. Funding. It’s better to learn real time (through making some mistakes, of course, and being hungry) and with your own hard-earned funds than to lose control or ownership of your business. So if you think you can’t do without, keep thinking. Ruthlessly scrutinize your business plan and cut back wherever you can. When my partners and I first projected we needed $2 million to get our business started but couldn’t raise that much, it was back to the drawing board with the mindset of “ok, how can we do this with as little as possible?” We whittled the amount to a few hundred thousand dollars and here we are, 14 years later, with no institutional private equity or debt. Get creative. Ask vendors to create a flexible plan for you avoiding upfront capital expenditures, extending your payables to be 10 days after the associated account receivable. To entice those first clients to give you a try, create contracts that they can cancel at any time if they are dissatisfied. Most people are eager to help entrepreneurs however they can.

Starting up is a big deal that’s ironically made much easier by keeping it as simple as possible. I hope applying my philosophy of ALAP helps you find success in your business’ early stages.

Charlotte Baker is the co-founder and CEO of Digital Hands, a Tampa-based managed security services company. She is a frequent guest speaker on topics such as building entrepreneurial companies, advocacy of women in technology and raising awareness of cyber security threats. You can reach her at cbaker@digitalhands.com.