Advice for Entrepreneurs -Building a Managed Funds Business
With more women becoming entrepreneurs than ever before, there is a high demand for information about how to start a business. At the Futures Industry Association Expo in Chicago last week, one of the panel discussions included advice on building a managed funds business. The broad-based suggestions given to the audience were applicable to a range of organizations, especially the tips about how to execute start-up strategies.
The session was moderated by Paul Olin of the alternative investments group at Union Bancaire Privée. He was joined by speakers Arthur Bell of Arthur Bell Certified Public Accountants; Jim Little of Campbell & Company and David Matteson, partner at the law firm DrinkerBiddle.
In the discussion, Mr. Matteson drew a parallel between starting a business and getting married. He emphasized the importance of a pre-nuptial agreement. He advised that declaring ownership before the business takes off is essential and explained that things get complicated after the money has already been invested.
The panelists also advised would be business owners to place a high priority on developing a disaster recovery plan. Putting such a plan in place is essential if the business and the investors hope to recover from major unforeseen events. Mr. Olin gave an example: “A few years ago the East coast lost power over an innocuous event in Cleveland… trading is global these days and you need a business continuity plan,” he explained.
A business continuity plan is activated when an organization is faced with a crisis. The plan should include technology to recover lost data and guidelines to prepare for future incidents that could disrupt the organization’s productivity. This could be anything from fires to earthquakes or power outages. Hopefully your business will never need to turn to a disaster recovery plan however; it is always smart to be prepared.
If faced with a crisis, the panelists recommended risk management technology to secure your organization’s recovery. They also acknowledged that the capital markets are more reliant on technology than ever before. They recommend evaluating and utilizing technology to achieve your strategic goals.
After a company has taken off, Jim Little had a suggestion for when a key employee should step down. “If possible, hire a replacement 4-6 years before the employee plans to leave their position,” said Little. He believes this is adequate time for the understudy to go through training and learn the ropes of his or her future role. “Don’t think you can replace a senior level employee in a matter of six months,” he continued.
The financial industry saw this successor scenario take place Friday, November 30th, 2007 when Ed Zander announced his resignation from Motorola. The Financial Times reported that Zander’s successor, Greg Brown, had been groomed for the past few years to take over as chief executive officer.
Lastly, Matteson pointed out that you should seek the advice of many different experts when starting up a company. “The cost of not getting good advice is expensive,” Matteson said. “Research all of your options before taking off.”
