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How To Create A New Group, Company Or Association

By: Luat Tran Van

"A person who is successful has simply formed the habit of doing things that unsuccessful people will not do."

- Dexter Yager.

New groups and all kind of corporations can organise themselves in many different ways, but generally speaking, we can say that there are two different kinds of associations:

1)-Formal, or documented.

2)-Informal, or causal.

As a strategy for any growing group, either way could be correct or, on the other hand, unsuitable. All depends on the aspirations, goals as well as possibilities of the founding members of the group in question.

It is a common problem in all budding organisations that these are constructed with preconceived ideas, and based on doctrines from the past, and while these might be good in the present on certain cases, or have been good in the past, it would not be prudent to assume that they will serve well in the case of a new entity.

Each organisation, club, company or association is a different thing, and thus they cannot accept all recipes in the same way.

Perhaps the best that you can do is to establish some loose formal rules from the beginning, with the clear goal of complementing, improving or changing them in the near future on the grounds of empirical evidence of suitability.

"If you want to start or found a group of any kind, you will need to establish a basic set of governing norms, so as to establish the mechanisms by which further regulations are establish, as well as levels and limitations of responsibilities in each case.

You cannot predict the group’s behaviour in detail from day one. This is a mistake that the creations of – for example – some money trusts and non-profit organisations have committed in the past. If you set rules which a re too strict and limiting, you will face trouble in the future, as in the case of a millionaire who left his fortune to his descendants in a fiduciary trust, with the express condition that the money could be invested only in tramways.

You can imagine the rest of the story...

Well, this is an example of lack of flexibility in the basic rules of an entity or organisation, and if you create yours with a similar mentality, you could well become the creator and killer of your brainchild.

Once you have settled the objectives of your new group, you must establish how are you going to finance it, and how are you going to govern it. Thus, the creation of a group, club, company or any kind of organisation can be summarised into the following main steps:

1)-Establishing goals.

2)-Finding how to rule it.

3)-Finding the required money.

So we will deal now with each one of these.

1)- Establishing Goals

Goals are an obvious necessity, for they are the reason or reasons behind the creation of the organisation. If the creators of an organisation do not have a clear set of goals, they will probably fail in their endeavour unless they find some bearing along the way.

Organisations can change their goals with time: let’s say that you want to create a company to produce climbing equipment of a certain kind, you begin the manufacture, you start to sell your gadgets to mountaineers all around the world, and your main goal is to become the most important producer of such widgets, worldwide.

Suddenly, another company begins to manufacture something that leaves your gear totally obsolete. What would you do?

Certainly, you can choose to go bankrupt because even your past goal has become obsolete, but you can do something different in this case, which is to redefine your organisation by establishing a new set of goals and not looking back at those left behind in the process.

Many phone and communications companies around the world found themselves with saturated markets just a couple of years ago, and with no perspectives for growth, but then, the Internet appeared and their skies cleared. Now, these companies, or at least those capable of redefining themselves, are striving with new business.

2)- Finding how to rule it

Finding a set of rules to govern your company, group or organisation is essential, but they are not above goals in priority, because the rules that your organisation will establish should be tailored to its goals, and no the other way around.

Organisations that find their rules limiting, either change or break them. That is the case of – for example – countries where revolutions take place. Thus a good, clear and flexible system should be develop. Such a legislative system should be respected during the everyday activity, but it also should be easily adaptable to changes in objectives and even strategies.

There are three levels or layers of rules that you should consider:

1)-Statutory or constitutional.

2)-Legal.

3)-Normative.

In essence, the first level defines the organisation from a formal point of view, establishes its authorities, attributions as well as the mechanisms related to their replacement, if necessary. This level of ruling comprises documents such as the constitutional charts of different countries, the contracts by which commercial societies are created, as well as the will of the founders and main donors of non-profit organisations, and it has been so since Sumerians began stamping their personal seals on those clay tables where they wrote the first contracts in history, in cuneiform.

The second level of rules is the legal one. By means of laws, decrees, executive orders, etc. organisations and their representatives at various hierarchical levels establish what should be done. This level corresponds to the laws and decrees of our government, or in the case of companies, rulings from the CEO or Directory.

The normative level is the last one, and established how the rules laid by the legal layer are to be implemented. For example, if a law is passed by Congress or Parliament (legal level) by which air safety is to be improved after an accident, taking into account given factors, rules and standards are later established at a normative level in order to apply the given doctrine to reality, considering the limitations and characteristics of the existing aeroplanes, airports, etc.

One important point to consider is that in any organisation, normative and legal levels must remain subordinated at all times to the statutory or constitutional level, and this one, to the general objectives of the organisation.

That is, if your main goal is to make money by selling rucksacks, the statutes of your company must empower you to do so; the directives of your company’s various departments should act in unison with that objective, and your internal norms for personnel, quality control, etc. should be related to those levels as well.

If you set your goals in such a way as to conquer the worldwide rucksack market, but you copy the statutes of a charity organisation when you create your company, you would be making a mess. If you just copy the charitable institution’s internal rules, you would be making a mess, and if you just adapt its norms and standards, you would still be making a mess.

3)- Finding the required money

The last point to consider is how to find the money that you need. This part is perhaps the most challenging on the short run for any entrepreneur or creator of an organisation. Cases in which money is available without limitations are very rare indeed, and all new organisations will have to struggle to obtain their ‘oxygen’ in the form of cash.

Please bear in mind that getting a positive cash flow is not the same as building value. You can build value and yet, obtain no cash flow, or you can get your daily checks but with no value build-up at all. Art, for example, builds value without necessarily increasing cash flow, at least immediately: science builds value too. In the end, value builders make very good investment opportunities, but they are unfortunately difficult to fathom.

These two aspects of the problem are related, and in the long run, you will need both, but there is a tendency – for obvious reasons – to pay more attention to the cash flow side of the problem than to the value build-up. My advice is that you pay attention to both, because value will mean more money, more capital and more possibilities to attain your goals in the future.

Value is a complicated concept that I cannot explain in a brief article comprehensively, but think of value as the worth of something, apart from the bills or cheques that you could be paid for it on its sale.

Article Source: http://www.articlemanual.com

Please review further information and references at Andinia.com. You can also get in touch with Don Pablo Edronkin directly to learn more and exchange views about these topics.



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