Enterprises need to consider many different issues when they establish a company. There are many basic steps that can help you to manage and prevent risks when starting a business in Vietnam. VIVA would like to share 05 steps to establish a company and manage business properly for a new business.
05 steps to establish a company and manage business properly
01. Choose the Forms of business – Capital Structure
- There are 5 basic Forms of Business: Limited Liability Company ( 1 member, 2 members above), Joint Stock Company; Private Company; Partnership. Each business form has its own characteristics, if you can handle it correctly, you might get many advantages in the management and operation in the future, otherwise, it might hinder and cause unforeseen risk.
- It requires to have knowledge about charter capital, capital structure, flexible capital, fixed capital, tax shield, capital risk, capital contribution procedures… before filling in business registration form to avoid conflicts with actual activities, even wasting tax costs, potential risks about responsibility and other administrative obligations.
Note: Filling in the application and submitting the application to grant the business license which is as simple as filling in motorbike registration. You need to determine the plan, business scale, financial organization, business management organization … so that you could choose a suitable form of business.
02. Fully implement procedures for compliance in business
- Compliance procedures after being granted a business license.
- Compliance procedures annually for tax, accounting, employment relations and compulsory insurances.
- Compliance procedures about intellectual property rights, business license in conditional business line.
- Applied and updated local laws and regulations strongly and strictly.
Note: These compliance procedures are mandatory to establish a company and manage business effectively unless the business is no longer in operation. If enterprise complies with the procedures proficiently, the enterprise can save costs as well as increase the effectiveness of business goal.
03. Setting up an internal management system
- In preparation for development, any business needs to set up the standard operating procedure to connect resources and manage risk.
- The standard operating procedure should be linked to functional department of the organization, the job description, key performance indicator, remuneration policy with rules and discipline.
- When you set up and operates successfully procedure, the standard of forms, you can consider requesting prestigious rating organizations such as BSI Vietnam, Bureau Veritas to certify ISO: 9001, and then applying resource management software such as ERP and SAP …
Note: Without an internal management system, the work will be overlapped, all things will “put on boss’s head”, at this time, the boss works as hard labor while the employees receive monthly salary with complaints about boring job. When you have applied and successfully operated ERP, SAP, … the organization will operate on its own, exploiting the resources including manage employment relations, now the business owner will not have to do anything except thinking about company strategy and meeting partners
04. Managing by numbers
- All business activities will be expressed in each data in financial reports. Reading and understanding financial reports is a way of collecting – controlling information and resources in business quickly and reliably.
- Create a budget estimate – financial plan, analyze revenue, cost, business result from Financial report. In this way, you look like holding a smartphone in your hand to review and control field resources of outside right in the air-conditioned room.
Note: These are expertise required, you only need a professional accountant instead of joining accounting classes.
05. Corporate Culture
Building corporate culture is the final step in 05 steps to establish a company and manage business effectively
- Identification, building, nurturing mission – vision – core value
- Each different business will have a different nature and identity, there are different standards of behavior, so there will be different kinds of corporate culture. There is no definition of good corporate culture or bad corporate culture, it is the appropriate or inappropriate culture, it will contribute to develop or restrain the business operation.
Note: Corporate culture is the combination of the mission implementation process, reaching the vision based on core values and through management tools. At the root of a business is the corporate culture which has come to define the future of that business and worth investing in.
These 05 steps to establish a company and manage the business might reduce risks for a new business. In addition, professional knowledge and multi-industry experience from business consulting agencies are a powerful resource and tool for many domestic and foreign businesses. Enterprises should choose a reputable consulting firm to accompany from the beginning, forming a consistent and transparent cooperation system in the business development process.
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