BUSINESSES & OPPORTUNITIES
3 Steps to a Profitable Startup Continued from page 28 ■
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How much will it cost to sell your product (marketing, travel, & entertainment)? How much will it cost for risk management and compliance (legal, accounting, & insurance)?
Then you can perform simple calculations to figure out how much money you’ll be losing or making. Revenue – expenses = profit. #2. UNDERSTAND HOW MUCH MONEY YOU’LL NEED TO REACH BREAKEVEN
Once you have an understanding of your revenues and expenses, you can make monthly estimates to figure out how much cash you will need to stay afloat until you can generate positive cash flow. You should also estimate any startup costs or capital expenditures you need to make in addition to your day-to-day operating costs. Adding these estimates together will help you know how much funding you will need before you approach investors or lenders or decide to use your own money to bootstrap your business. Make sure you raise enough capital that you can launch and operate until you reach breakeven. That way, you won’t have to scramble to raise more funding to stay in business when you could be out selling and making more money organically.
“When you have a clear understanding of the rhythm and flow of your revenues and expenses and their impact on your operating budget, you can hire a qualified financial officer you can trust to help you manage your business.” #3. TAKE CHARGE OF THE MONEY AND CONTROL IT
Don’t make the mistake BloomThat made of not paying attention to your money. After launch, don’t hand off your company’s financial statements until you have achieved breakeven. From day one, develop the discipline to generate and review simple financial reports and budgets on a daily and then on a weekly basis until you achieve ongoing profitability. If you know how much money is flowing in and out on a regular basis, you will know if your business model is working. Your numbers will keep you informed of the 30
How to Stand Out at Tech Startup Conferences
3. Treat Everyone as an Equal- Treating every conference attendee as an equal is an important lesson for tech conferences, and business encounters in general.
Tech startup conferences attract startups from all walks of life. Big and small, new and old, East and West Coast, VC funded, or still on the lookout for funding. If you’re anyone or anything on the tech scene, it is essential to put in the time and show up at the conference. While showing up is half the battle, it is also not enough. There are certain rules and protocols which may seem like common sense to some, but all too often are neglected by startups in all stages of the business.
4. Use Social Media- It is important to connect with a contact that you meet at a tech conference on Linkedin, and follow them on Twitter, which will ensure you remain on their radar, long after the conference is over. Some methods of using these to your benefit are taking pictures with your new contacts and tagging them, and retweeting quotes from the keynote speakers. This will often have a domino effect, which can put your social media pages in the eyes of the right people.
1. Relax and Loosen Up- Engaging your audience members, by talking with them, not at them, will leave a lasting impression. It will also help you relax. Participating in a conversation is always easier than giving a speech. Even when you are physically at the podium, use a conversational tone. 2. Don’t Drink Too Much- Tech conferences have liquor everywhere (at least the good ones do!). Drinking too much can impede you from making the proper impression, and from succeeding at these conferences. A drink here and there is alright, but getting wasted is a clear no.
“Have an understanding with
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AlexAnndra Ontra, Operations at Shufflrr.com, oversees Operations, including client services, sales and marketing. Alex applies her expertise in Presentation Management to service Shufflrr’s broad array of clients including Royal Caribbean, ADP, and Time Warner.
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Have an understanding with your team from the beginning that you will keep a stranglehold on salaries and operating expenses until you meet a specified goal or timeframe.
your team from the beginning that you will keep a stranglehold on salaries and operating expenses until you meet a specified goal or DON’T HOPE FOR SUCCESS – timeframe.” health of your business. When you have a clear understanding of the rhythm and flow of your revenues and expenses and their impact on your operating budget, you can hire a qualified financial officer you can trust to help you manage your business. To put your business on the path to profitability, here are some practices to maintain as you launch and scale your startup: ■
Make a realistic budget and operate the business within it.
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Have the person who does your books give you copies of your budget daily.
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If you have variances from the budget, understand why.
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Understand how the timing of revenues and expenses affects cash flow.
To help you stick to your budget, establish rules for yourself and your employees.
Home Business January/February 2017 ®
You would be surprised at how many individuals or companies with a great product neglect the tremendous opportunities that they have right in front of them. Keeping these notions in mind will ensure that the effort put into attending these conferences does not go to waste, and on y are maximized to their fullest the contrary potential.
PLAN FOR IT Even the best-laid plans cannot include the unforeseeable challenges ahead. But for the most part, the deal-breaking surprises — the ones that make a startup shut down before its time — can be avoided. The last people to be surprised about a startup that is headed into a death spiral should be its founders and investors. If you plan to generate a profit from the beginning, make reasonable financial projections, and stay close to the money, even the unpredictable challenges ahead are likely to be surmountable. Ed McLaughlin is the founder & CEO of Blue Sunsets LLC, a real estate and angel investment firm based in Darien, CT. Wyn Lydecker is the founder of Upstart Business Planning, where she works with entrepreneurs to develop plans that answer the questions investors ask most often. The Purpose Is Profit: The Truth about Starting and Building Your Own Business is available on Amazon and other booksellers. Learn more at www.ThePurposeIsProfit.com and connect via LinkedIn and Twitter.
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