how do i set avast! free edition to automatically start a scan and update.

Avast Free Antivirus / Premium Security
1

on startup.

2

You can’t… scheduling is only present in Professional version.

There are some workarounds:
Howto do with Home version: http://forum.avast.com/index.php?topic=3796.msg27225#msg27225
Drawbacks on Home version: http://forum.avast.com/index.php?topic=29962.msg246925#msg246925

For updates, you can configure it to automatic and also set how much time should it occur after booting.
To schedule an update, the Pro version is necessary also.