Armanino Blog

Operational Planning for Startups: What You Need to Do Now

by Jenn McCabe
June 21, 2019

Operational Planning - For your business to grow, it needs to run efficiently. You also need to avoid regulatory and legal pitfalls in murky areas such as overtime (and there are lots).

An accounting system is central to your operations and success. And as workflow is established, there are peripheral and critical workflows you need to integrate right away.


There are just too many options out there. Here's what to focus on.

  • You need accounting/enterprise resource planning (ERP) software. It's central to your operations and allows you to track accounts receivable, accounts payable, general ledger, billing and other crucial data efficiently and accurately.
  • You also need something for file protection and storage that scales, is easy to search, and can allow varying levels of security access. You don't want all your staff to have access to all your stuff.
  • Take a look at a project management/resource planning tool. This is a program that helps map out where you'll put bodies, and when work assignments will require you to get more bodies.
  • A customer relationship management (CRM) system is key if you have a lot of business development going on, you have staff in multiple locations, or you are trying to stay organized and manage prospective clients and contacts.
  • You need a payroll service and platform. Doing your own payroll by hand or with inside accounting software that "makes it easy" is a Black Diamond skill level, and it's prohibitively expensive if you mess it up. Time tracking tools work for payroll and/or for job profitability management. But select the right payroll platform and service early on. If you don't plan well, people will have to enter time in two systems, and that makes them angry.
  • Invoicing tools can be created in the accounting system directly, inside the CRM, or within the project management system. Of course, you also have to have client billing in the accounting software, so mapping is key or you'll end up entering everything twice. That's annoying.

Your different tools must work together, or you'll be stuck manually transferring data. Build a roadmap for a technology stack before implementing disconnected technologies that don't talk to each other.


How are you going to bill your clients?

This is the big number on your income statement. There are numerous technological, cash flow and tax ramifications to the decisions made for this workflow. You'll save yourself hassles and money by setting it up right at inception.

  • Start with excellent contracts with your clients and excellent sales agreements (see the legal section below). If you're a retailer, make sure clients know exactly what they are getting and what they won't get unless they pay for it.
  • Do you also need to bill sales tax? Excise tax? Find out before you sell a single item! This is an expensive mistake and now extends beyond the state in which your company functions. If you use e-commerce, before you sell anything, it's critical that you understand what your obligations are in each jurisdiction that you sell into.
  • Set up your technology stack so that your selling process leads smoothly into billing and collecting. It makes no sense to sell something and never invoice correctly for it.


People: Can't live with 'em and can't live without 'em.

  • As mentioned earlier, you need a payroll service and platform. Mistakes will cost you (and don't even think of paying someone under the table). Do it right, and know the rules on things like employee classification (around here we call "freelancer" the F-word...)
  • Once you've got one employee, you need workers' compensation insurance (see below).
  • The minute you have two employees or more, you need a basic handbook with some simple and clear policies regarding fringe benefits, holidays and paid time off.

Being an employer is risky business. Avoid trouble — get advice from a labor attorney or a certified HR professional.


Don't groan or shirk here. Someday, you'll be happy you have it.

  • You must have workers comp coverage, as per the above. Note that most states will also insist you have it for any contractors who can't prove they have their own coverage.
  • You need general liability coverage, known as "trip and fall" in some circles. This protects you in the most basic way from claims made by persons who say they were damaged or hurt in connection with your business.
  • Cyber insurance covers you in the event your data is breached. This can be crucial if you keep customer data on file.
  • Errors and omissions insurance covers all kinds of sins. It's a customized policy that addresses your specific industry risks. There are subsets of E&O that may be necessary, too, such as directors and officers coverage.
  • Umbrella policies bump the amount of coverage on underlying policies in an affordable way. This is a good strategy for avoiding a catastrophic claim, or simply for getting more coverage on top of all your other policies.

This is not a comprehensive list! So find a high-touch broker who knows your industry. Ask them to review your client contracts and the way you work so they can recommend the right coverage.


They're a necessary evil (apologies to all our attorney pals). If you've got partners, clients or employees, you'll need to document your relationships. Legal documents help prescribe the way the company owners will relate to each other, and what the company will do for clients (and won't do). This comes in very handy when it's time to break up...

Find a lawyer who knows your industry. Use specialists when you need them.

  • Corporate attorneys are invaluable when setting up operating agreements and determining how you'll govern your entity.
  • There's nothing like a real estate attorney when you're signing a scary lease commitment and you need options.
  • A labor attorney is good to have on speed dial, especially if you don't have HR staff or a qualified HR consultant. Labor work is an extreme sport in some states!

By planning now, you can keep yourself out of trouble and set your company up for success.

Need some help? Contact our outsourcing experts.

Stay In Touch

Sign up to stay up-to-date with the latest accounting regulations, best practices, industry news and technology insights to run your business.

Jenn McCabe - Partner, Outsource HR - El Segundo CA | Armanino
Related News & Insights
SaaS Market Trends
Between the uncertainty of 2022 and the highs of 2021, what will 2023 hold?

December 14, 2022 | 09:00 AM - 10:00 AM PT
Fraud: Current Trends & Hot Topics
Don’t let fraud negatively impact your organization.

December 8, 2022 | 11:00 AM - 12:00 PM PT
Year-End Tax Planning for High-Net-Worth Individuals
Our tax experts will dive deep into our annual year-end tax planning guide.

December 8, 2022 | 09:00 AM - 10:00 AM PT