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Open Source Startup: Disciplinary Policy Template

Welcome to Chapter 7 of Open Source Startup: Disciplinary Policy Template. For a table of contents, head over to the Introduction here

Ah. South African Labour Law. We all know very well why it's as employee-friendly as it is. Because capitalism can be nasty and there are plenty of people that need to be protected. But it does make it quite hard to build a business in this beautiful country of ours.

As a nation, we choose not to sacrifice protection of lower-income workers, therefore we need to figure this out and find a way to play the cards we've been dealt.

The first step is to have an Employment Contract. The second is to have a Disciplinary Policy (which is specifically referenced in said employment contract) - and to make sure every employee of yours has received it and read it.

A Disciplinary Policy is a safe guard against an enormous amount of time spent in the CCMA trying to get rid of a bad egg. And trust me, everyone is going to end up hiring a few bad eggs. Usual…
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Open Source Startup: Shareholders Agreement & Memorandum of Incorporation Templates

Welcome to Chapter 6 of Open Source Startup: Shareholders Agreement & Memorandum of Incorporation Templates. For a table of contents, head over to the Introduction here

This is Chapter 6 for a reason. These documents should be one of the first things you get straightened out in your startup - but often aren't. Sometimes, you need to get a feel for the environment first. Sometimes, you just procrastinate.

Be warned and be warned well: you make contracts in case of divorce, not in case of happy marriage. You need contracts when people fight, not when people get along. The longer you leave these documents, the harder they get.

And they get hard. They get complicated. But this is just a nut you're going to have to crack.

Let's start with a few definitions and some scare tactics...

What is a Shareholders Agreement? It's used to govern the relationship between the various parties in their capacity as shareholders (and often in their positions as directors) of your compa…

Open Source Startup: Investor Reports

Welcome to Chapter 5 of Open Source Startup: Investor Reports. For a table of contents, head over to the Introduction here

You've got investors and shareholders. Now you need to keep them in the loop and leverage them to grow your business. If you start with the simple premise that most investors simply don't have the time to read all your detailed information - then you're on the right track. Less is more.

Start by asking investors what information they'd like to receive and how often. If you don't get good guidelines, I've always found the following approach works well. And in the spirit of keeping this brief (which you should do) - this will be the shortest post in the Open Source Startup series.

Investor Reports should usually include:
Management AccountsAged Payables (who you owe money to)Aged Receivables (who owes you money)Balance SheetCash flow Summary (preferably nicely categorised)Profit and Loss (Monthly and/or Year to Date) All of these can be easil…

Open Source Startup: Investor Pitch Decks

Welcome to Chapter 4 of Open Source Startup: Investor Pitch Decks. For a table of contents, head over to the Introduction here

You've hired outside of the founders (or haven't). You've got a handle on a simple strategy and a set of goals for you and your team to explore. You've even modelled your business from a cashflow perspective and so you know what revenue you need to hit by when. Time to raise funding?

Not always. If you don't need to raise funding, don't. Funding comes with a bunch of strings attached. It is not the cure-all that the developing world believes it to be. Outside of very early stage seed funding (usually from friends, family and fools) - only look to raise funding if you have proof of traction, proof of revenue and you want to grow FAST.

Here's the ugly truth. If your business model doesn't show a 5x to 10x return for investors in 5 years... Don't bother. Think that through. If an investor puts in R1m, you need to give them be…

Open Source Startup: Cash Flow Template

Welcome to Chapter 3 of Open Source Startup: Cash Flow Template. For a table of contents, head over to the Introduction here

Cash flow. The lifeblood of any business - and a tricky little devil to keep under control.

Something I've always struggled with is a solid, simple, cash flow (or cash forecast) template. Accounting can get cloudy for everyone except accountants - and all entrepreneurs need a tool to tell them whether this idea or business they're testing has a chance of succeeding.

I particularly like this template because it can be used to test an idea and estimate revenues. It can also be used to run a business - it provides a very clear picture on whether you're making or losing money every month and how many months runway you have before you run out of money.

I've included some of the more common cost categories to get you started. Out of interest, the test data I've included shows a small business that's generating reve…

Open Source Startup: Performance Management Framework

Welcome to Chapter 2 of Open Source Startup: Performance Management Framework. For a table of contents, head over to the Introduction here

Once you start building a team, the single most important thing to do is get them aligned with the vision and get them moving in the same direction (as fast as possible). Do not underestimate how difficult this is. You may think everyone is in the same boat simply because they arrive at the same office. More often than not, everyone is rowing in a different direction and the cox (you) keeps changing the orders.

You can read for months on how to set up a performance management framework (we prefer to call it Goals, far less authoritarian) - and by no means do I think ours is the best. I've just always liked to go for something that is simple, something that can be created and moulded together with your employees and something that errs on the side of transparency.

There is a movement towards competency-based performance reviews - which is larg…

Open Source Startup: Employment Contract Template for South Africa

Welcome to Chapter 1 of Open Source Startup: Employment Contract Template for South Africa. For a table of contents, head over to the Introduction here

Handshake employment is fine. Until something goes wrong. Two out of the three businesses in my immediate vicinity have been visited by the Department of Labour for an audit. And everyone has hired a bad nut.

Covering yourself with a simple but effective employment contract is really important - both for you and the team you're building. Here's a nice, solid employment contract example for you to use.

Notes and things to think through:

Clause 4: Job Description. This is important and should be updated every year, even if just to reconfirm role and responsibilities. Startups have lots of role creep, so make sure you account for that in the job description.

Clause 5.2. Termination time frames. You might want to double check this - the wording on Basic Conditions of Employment…