The Cost of Cutting Corners Accreditation Lessons for Founders and Builders

The Cost of Cutting Corners: Accreditation Lessons for Founders and Builders

The SEALs have a saying: Slow is steady. Steady is smooth. Smooth is fast. The idea is simple but effective. Building something the right way is more effective than rushing through in the long run.

This is an important lesson for business leaders to grasp. In the beginning, so many companies are operating on a hope and a prayer. They don’t have systems. They hold things together with the business equivalent of duct tape.

And while behaving hastily—or in a way prone to error—is inevitable, it’s also something to be minimized as much as possible. The goal isn’t just to build something that works now. It’s to create a real business that can be built upon for years into the future.

In this article, we examine the risks of cutting corners and what you should do from day one to maximize your business’s chances of success.

Establish a Sound Legal Foundation

Accreditation means different things in different industries. For a university, it’s pretty straightforward. The school needs to meet both regional and federal regulatory requirements. Otherwise, the degrees that students receive from said university will not be legally valid. The idea in this case is to standardize learning as much as possible. For example, a nurse graduating from the University of Illinois has the same basic knowledge as a nurse graduating from the University of Arizona.

Not only are unaccredited universities bad for students—who can very easily feel duped or scammed—but they’re harmful to the institution itself, assuming that the school is acting in good faith and genuinely trying to supply its students with a sound foundation. It should lay the groundwork ahead of time.

Naturally, not every business has the same strict regulatory requirements as a university. Still, there are equivalents to what we’re talking about across many industries. For example, let’s say you want to launch an e-commerce brand. You’ve developed mock-ups for your product line. You’re getting a surprisingly good website done at an affordable price on Fiverr. You’re investing in software and developing a business plan.

All of this sounds great, but it’s not enough to launch a business on. There are also legal boxes you need to check to make sure that your business starts off on the right foot.

In this case, you’ll need to contact your state IRS to register your business to start paying sales taxes. You’ll need to set yourself up as an LLC. You’ll need to get a separate bank account for your business. Depending on your business’s structure, you may need to get insurance. If you hire anyone, you’ll need to document that hiring appropriately with the IRS and begin paying payroll taxes.

All of these steps can feel tedious and even overwhelming in the early stages of your business. But they keep you compliant and help eliminate headaches down the road. Let’s say things go really well, and three months into your business you begin selling 1,000 items a month. Now, all of a sudden, you think, Boy, that’s a lot of sales tax I haven’t been paying. Can you imagine the headache of going back and retroactively figuring out how much tax you owe on thousands of sales?

It’s better—much better—to do things right from the get-go. Ten minutes doing things right now can save you hours in the future. And that’s before we even calculate the value of legitimacy.

Beyond Legal Requirements

It’s worth keeping in mind that compliance is the very least you can do. There are lots of corners you can cut that don’t harm the legality of your business but do harm its chances of long-term success.

You’ll never get things perfectly right in the first year—or even the first several years—of operation. But you should proceed with a high priority on trying to do things right while preserving forward momentum.

In the next few headings, we look at things to keep in mind that can help your business run smoothly in its first few years.

Systems

Business owners love talking about systems. They can sound abstract to an aspiring entrepreneur who thinks, Isn’t a lot of this stuff self-evident? Why does everything need to be written down?

Well, the reason is pretty simple. You want things standardized and written down so that you don’t have to do everything. If you ever want to take a day off again in your life, you need systems. And if you want your business to scale seamlessly, you want good systems.

It’s through systematization that a McDonald’s restaurant can generate millions of dollars of revenue every year while being run by 16-year-olds. They aren’t making discretionary choices. They’re following clearly laid out steps in an employee handbook.

So how do you make systems?

Well, it’s an iterative process. In the early days, you’re going to be figuring everything out in real-time. Sometimes you’ll be making many choices in one day, and you won’t have the time to think too hard about the efficiency of any given choice. That’s okay. As we said, writing systems is iterative.

Here’s what you do: document every step you take. When you have a spare moment, review that process. Look for ways you can tighten it up—simplify. The more streamlined your process is, the easier things will be, the smoother your business will run, and the more money you’ll make.

This might feel like an unnecessary chore when you’re the only person working at your company, but you’ll need these processes documented to make any new hire. Writing systems in real-time gives you an incredibly solid foundation for future success.

Invest in Good Software

Again, this is another thing that you can do only to a limited extent in the early days of your business. Most startups won’t be able to afford thousands of dollars a month in software subscriptions. Fortunately, you don’t need to. Your goal should be to buy the best software you can afford for the highest-impact tasks.

For that hypothetical e-commerce company we mentioned earlier, that might be a tool that allows you to automate customer marketing. For a home service business, it could be a good CRM that includes a robust slate of invoicing tools.

You don’t want to purchase your software subscriptions blindly. You should do so always with this question in mind: What problem is this software solving for me? Is it worth the money?

As you pick up tools, you also want to think about integrations. In other words, you want to find software that works well together. Many new entrepreneurs are surprised by how many different software subscriptions are necessary to run a single business. There’s one for billing, one for bookkeeping, one for sales, one for marketing, etc. Some tools are more all-purpose, but they typically fall into the jack-of-all-trades category.

If you’re going to get a good tech stack, it needs to not only work well as disparate parts but also together, syncing data for seamless collaboration. Acquire new software with the same selective approach you might take to renovating your home—one piece at a time, chosen with quality in mind. No hasty choices.

This is a consideration for which it’s better by miles to get things right the first time. Changing business software is a bigger headache than many people realize, and while it will be inevitable at certain points of your business’s life cycle, you want to minimize the need for it.

Automate Everything

Okay, not literally everything—but as much as you can. Automation costs money but saves you time. And when chosen carefully, it can lead to major savings in the long run.

Many automations are simple: follow-up emails, or cross-selling or up-selling offers. For example, when you shop on Amazon.com, they will automatically push complementary products at you as you go to checkout. If you buy a weed trimmer, they might recommend motor oil or trimmer string. The chances are pretty good that you might follow through on that purchase because they are genuinely helpful items, and because you’ll save money by combining shipping.

The more you can automate, the more time you’ll have to focus on high-value tasks. The less money you’ll spend on new hires. You don’t necessarily need to automate from day one, but as your business begins to become profitable, automation is certainly a good direction to take your early reinvestments.

Conclusion

What do all of these recommendations have in common? They’re all about scalability. You want to organize your business in a way where it will be as smooth and effective with 1,000 customers as it was when you had only five.

Too often, a company begins to find success only to fall apart at the seams because it was built on a shaky foundation. You don’t want that to be you. Do things right the first time. Right doesn’t mean perfect. It means good enough. Improve with time. Look regularly for ways to refine your processes and use technology to simplify your life.

The better you get at following these steps, the more money your business will make, the less time you’ll need to spend working on it. It’s as simple as that. If you want a business that can grow and operate without you, you need to make the right choices early on.

It takes time. It takes effort. But it’s well worth it.