Transcript
Paul Sturrock paul.sturrock@gmail.com @PSturrock www.simpleventuredesign.com
!http://www.flickr.com/photos/13902049@N00/5652405755/ el bidule cbdn
Simple Venture Design
Image from “Business Model Generation” Osterwalder & Pigneur
Implementation
Value= Opportunity/ Risk
• Modular adaptation and iteration • Accelerated learning • Risk reduction • Evidence based funding
Davide Casli, http://intenseminimalism.com/2010/the-dot-loop-the-simplest-process-possible/
W H AT ’ S Y O U R B I G G E S T L E A P
O F FA I T H ?
SMART GOALS
Relevant: Why?
Focus: Less is More
Time Based
Specific: 6 Ws
Attainable: How?
Measurable
What should you measure?• Sales Drivers
• Leads (clicks)
• Conversion
• Discount
• Repeat customers
• Customer acquisition
• Design your own!
What should you measure?• Profitability Drivers
• Yield and spoilage
• Returns
• Margins
• Return on assets & equity
• Revenue per employee
• Design your own!
• Customer profitability
Goal Double SalesPositive
Cashflow from Operations
Measure Revenue Net cash from operations
Strategy Expand Awareness Change payment terms
Tactics1. Identify Target Segment 2. Identify Awareness Channel 3. Position Value Proposition and
Differentiation 4. Develop Elevator Pitch 5. Clear Branding
1. Incentives for cash payment 2. Require deposit 3. Credit control system 4. Negotiate credit with suppliers
Start/End Dates
Time Allocation
Some Tools
• Subjective
• Teamly.com
• Max 5 goals : Year, Quarter, Month, Week, Today
• Trello.com
• Card based system based on agile practices
What are your next steps?
Finance in 8 Slides
Simple Questions• How much money do I have?
• How much money do I really have?
• How much do you make on each sale?
• How much do you make on each customer?
• What is your break even point?
• How much money do you have now?
• How did that happen?
Costs
• Product Costs
• Direct
• Indirect
• Fixed vs. variable
• Overhead
What are your major costs?
Assets (what you have) Liabilities (what you owe)
Cash £10,000 Accounts Payable £5,000
Accounts Receivable £15,000 Accrued Expenses £1,500
Inventory £20,000 Provision for Taxes £2,000
Current Assets £45,000 Current Liabilities £8,500
Equipment £50,000 Long-Term Loan £20,000
Property £100,000 Total Liabilities £28,500
Owner’s Equity £166,500
Total Assets £195,000 Liabilities + Equity £195,000
A Balance Sheet always BalancesBalance Sheet: How much money do I have?
Balance Sheet Basics
• Balance sheet is a snapshot
• Assets valued at lower of cost or market
• Working Capital = Current Assets - Current Liabilities
• Equipment is depreciated
• Owner’s Equity = Assets - Liabilities
• Assets= Liabilities + Owner’s Equity (Balance)
Turnover £150,000Cost of Sales £60,000Gross Profit £90,000
Salaries £10,000Premises £12,000Marketing £15,000
Admin £5,000Overhead Expenses £42,000
Operating Profit £48,000Interest £1,000
Profit before tax £47,000
Tax £9,400Net Profit after tax £37,600
Income StatementIncome Statement: How did that happen?
Payments Received from Debtors £20,000
Funds from Investors £50,000
Loans Received £25,000
Sources of Funds £95,000
Expenses paid in cash £10,000
Debt payments £10,000
Dividends £5,000
Uses of Funds £25,000
Net change in Cash (Cash Flow) £70,000
Cash Cash Flow: What really happened? Statement
Cash Flow Management• Get paid as soon as possible
• Incentives for paying cash
• Upfront deposits
• Credit control
• Chase payments
• Pay as slowly as legally and ethically possible
• Don’t let success bankrupt you!
• The more successful you are, the more working capital you need!
• Cash is King! Keep your eye on it!
Good Habits• Cash management!
• Monthly books
• Budget vs. actual
• Reforecast
• Credit collection
• 80/20 rule (don’t be penny wise and pound foolish)
• Use advisor but understand the numbers
Questions
Homework: What’s the Story?
Photo Credit:www.flickr.com/ Nicolò Paternoster creativecommons.org/licenses/by-nc-sa/2.0/
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