Wednesday, May 11, 2011

The Path to Launching A Successful Startup

The Path to Launching A Successful Startup

By Chris Benjamin, Rogue CFO (

The Path

1. Vision
You are the visionary. You have an amazing idea, and just know it will be a huge success. Your head can't keep up with the ideas flowing through your head. Online research, building a website, marketing, how much to charge. The list goes on. So much to do, and none of it can be done fast enough.

As entrepreneurs, we've all been there. Nothing in life could be more exciting. Now is the time to take this seed idea and provide all of the ingredients to make it grow into a sustainable venture that exceeds your vision.

I am not one for quotes, although I always take this one to heart:
"Do not worry if you have built your castles in the air. They are where they should be. Now put the foundations under them." - Henry David Thoreau

Congratulations, you are among the very elite who have the gusto to turn visions into reality.

2. Plan
Planning is everything. You need a framework as a foundation for your venture. It may all be in your head, but relaying your vision to another person is best done through a concise plan. It also forces you to answer the tough questions that maybe you've avoided. How much money do you need to launch? Who is your market, and where are they located? What is your value proposition? Convince everyone that you have an amazing idea.

Business Plans

Conceptualizing is best done through the traditional Business Plan. While there are many business plan templates and software packages available, there is one problem. They are very "fill in the blank", and it shows. No matter how much you smooth out the rough edges, a seasoned pro will take one look at your plan and know it was done through Q&A.

Why is this bad? It's too easy to avoid the questions you don't want to answer, and no one business plan should look like another. Focus on what the key points are. If the management team is what will make this ship sail, then we need to make sure that their experience is emphasized. If marketing is the key play in why this will take off, let's explore that and make sure the marketing plan is solid & thorough.

Whether you have a business plan already written and need advice, or you have nothing on paper and want to put together a plan that will showcase your idea, I can help.

Financial Projections

A requirement of any plan is a demonstration that the venture will make money. There are standard financial forecasts any plan should include, as well other financial data that not everyone else will but adds a lot of value to the reader. I am a CFO by trade, and financial projections are one of my strongest skill sets.

Profit & Loss Projections for 3-5 Years
Year 1 Balance Sheet by Month
Year 1 Cash Flow Statement by Month
Capitalization Table
Time line
Break Even Analysis
Best Case/Worst Case Analysis

3. Launch
Now that the plan is set, the vision is crystal clear, and team is ready, it's time to launch. Launching can take many forms, but is defined as taking your idea to the public, and creating a mechanism for someone to purchase your good or service.

Careful management of your resources and being dynamic are key. You want to be able to grow according to the plan, and want to be fluid enough to change quickly to your results after you launch. The business plan is a guide, but not a manual. Recognizing what is working and what is not, and making the appropriate changes will result in reaching your next level.

How can I help you here? I've been in several startup environments, and there is no set operational game plan to follow. It's a very fun, energetic, and exciting time. Use my experience to help guide your decision making, so that what your business plan dictates becomes a reality.

4. Grow

You've launched your venture, and it's becoming an instant success. Now is time to manage the company so it grows in the direction you envisioned, and there are several key factors to accomplishing this task. I can help guide you in several areas, although my expertise through education & experience would be to fill the roll of contract CFO (Chief Financial Officer).

What does a CFO do for your company? A lot. A short list follows of potential areas I can add value as we transition into the day to day operation & growth of the company.

All Accounting - journal entries, reconciliations, meeting deadlines, tracking expenses & revenue
Financial Reporting - Profit & Loss, Balance Sheet, Cash Flow Statements, and much more
Business Intelligence - intelligent interpretation of how you are performing
Budget & Forecasting - using the drivers in your industry, develop realistic forecasts & budgets
Cash management - especially important for a start up or small business
Board of Director Reporting - if you have investors, they will want status updates & regular meetings
Guidance, Strategy & Advice Consulting. Any way I can add value I will.

5. Choose

Now is your time to choose. You can continue to grow the company, and let your vision become your life's ambition. You've succeeded and want to evolve to a new higher goal. In some senses, you begin again with the new Vision and go through the Path again.

Others may have other ventures they want to pursue. They accomplished their goal, and created a sustainable, profitable, growing company. It's now time to be rewarded for your hard work, and use the value you've created to go in another direction.

Often referred to as the Exit Strategy, if you had capital investors, now is the time to let them be rewarded as well for their investment and belief in what you have accomplished.

Determining the exact exit strategy will involve a combination of several factors.

What is best for the company
What are your goals (stay & operate the business, become a passive investor, or completely liquidate)
What are the arrangements with the capital investors
What are the future plans for the company
Depending on how the agreement was structured, there are in general only a few exit strategies.

Merger or Acquistion with/by another company (M&A)
Go Public on a stock market
Liquidate investors and continue to operate the company

Within each of these is a myriad of possibilities. We will work together to structure an exit strategy that is in everyone's best interest.

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