Using the Risk Analysis for Initial Needs (RAIN) planning model and its resource-based audit (RBA) tool to support the creation of a time zero startup business plan will improve the perceived value of the startup plan to founders and stakeholders by identifying gaps between the needs and availability of the needed resources at time zero.
The case has been made that successful startups are beneficial to all stakeholders in the community, while startups that fail to sustain create significant costs, both actual and opportunity, for both themselves and the community. Depending on the source and the time frame referenced, emerging business failure rates range from 50% to 80% (BLS, 2016). This figure demonstrates the disappointing inefficiency of startups. What is not clear is whether the high failure rate, which has come to be accepted, is necessary. The creation of RAIN was motivated by the desire to seek a solution to the business problem of continuously high failure rates through improved startup business planning. RAIN improves the startup business plan by replacing traditional environmental auditing with resource-based auditing (RBA), and focusing on sustainability and scalability during the post-launch Incubation period. Using the RAIN startup planning model at time zero and throughout the early stages of the business lifecycle should improve sustainability and encourage founders to embrace developing and using startup plans.
Experts agree that entrepreneurial enterprises are creators of economic growth. In fact, a recent study by Guzman and Stern looked at the attributable growth for a community based on the quality of the startups (Guzman & Stern, 2016). It was found that “a doubling of the entrepreneurial quality predicts an increase of 6.8% in GDP in 11 years” (Frick, 2016). This study emphasizes the need for more successes, rather than more startups. “We’ve long known that new businesses matter to the economy and that it’s a small group of fast-growing firms that matter most, because of the jobs and innovation they bring”
(Frick, 2016).
Founders, investors, creditors, incubators, government programs, and entrepreneurial education programs all benefit from improving the sustainability rate of startups. These benefits include job creation, debt default minimization, and expanded economic growth through the multiplier effect of the surviving business entity (Guzman & Stern, 2016). Improving the success rate of new businesses through improved time zero planning will have positive consequences for the community and economy.
Author: Gilbert Gonzalez
Link: https://doi.org/10.28945/3844
Cite as: Gonzalez, G. (2017). Risk analysis for initial needs (RAIN): Improving a time zero startup plan through resource based auditing (RBA) and a launch focused strategy Muma Business Review, 1(8). 81-95. https://doi.org/10.28945/3844