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3mentions
2people
2007–2015years
100% recommend
Mentions per year
What Hacker News says
- Hi, firstly you're not alone when struggling with the financials part of a business plan... I most certainly did.
What I suggest is getting a second hand copy of Timmons' "New Venture Creation" book and look at (and copy) the Business Plan template.
You can pick up this book for $5 via Amazon (http://www.amazon.com/New-Venture-Creation-Entrepreneurship-...) and IMHO it'll be the best $5 investment you can make to assess your idea and build a 'formal' bplan (aka what an investor or incubator/accelerator will most likely want to see).
The template is quite comprehensive but just skip the bits that don't apply to your opportunity. Follow Timmons' examples as to how to work out the financials (and copy the example layouts given).
Good luck, btw read that book front to back... it's one of the only entrepreneurial books that has stood the test of time for me and I have gone to it through several different start ups.
- Okay well there isn't any right answer here and honestly what you are asking is extremely broad. Any advice is only valuable if it is tailored to your situation.
My biggest question to you is, “do you have a business plan?” Sure the thing gets obsolete the moment it hits the printer but I've found the discipline of writing one and doing the financials a very good thing.
If you don't have a business plan I would honestly start there. New Venture Creation: Entrepreneurship for the 21st Century by Timmons has an excellent Business Plan Template. In my younger years I won a business plan competition at my university with it. The book also has a good opportunity screening framework which is really helpful. Buy a second hand copy of the book and you don't need the latest edition. I have the 5th edition of the book and it is used time and time again when needed to do business plan stuff.
Once the full business plan is done, I have found that condensing it all down into a one page business plan for the start-up team members keeps everyone in the loop about the big picture moving forward. You will probably need to keep revising the one page business plan depending on what is actually going on. I wouldn't change the full business plan unless you are doing a major pivot or if any significant amount of time has passed (like 1 year).
Having worked through the full business plan you will have figured out where you want to go and what you will need to get there. How you move forward really depends on what type of business you are in, and what your business model is. You should have also done a bit of project planning in the business plan and I would have paid close attention to the critical path of your start-up (and maybe done a Gantt Chart with who is doing what).
Having said that I would pay close attention to your burn rate—or how quickly you are using up your cash. This is sometimes called your 'runway' for launch but I like to call it your 'death clock'. You must get to a point as quickly as possible where you are break even including a living wage for founders and staff. I think PG from HN has a blog post somewhere about being 'Ramen Profitable' which might be worth a read.
Anyhow having a 'death clock' can motivate you and your team to hit break even before you run out of cash and die. Fear is an excellent motivator in the short run. If you have a great team I don't think you need to really push them too hard beyond that because they will know what they need to do to get to break even before you die (if they don't what the heck are they doing in your start-up team?). Having said that you'll need good team communication and coordination and I would say weekly meetings with a sort of whip-around where everyone gets a chance to tell it how it is... something like:
A) This is what I did last week, this is what I'm doing this week B) This is what I worked, this is what didn't work C) I need help/I'm at full capacity/I have spare capacity.
Also try to get someone to summarize the team's progress against your critical path. Are you early, on track or behind? If you are behind what can the team do to get back on track?
If you have already hit the break even milestone, congratulations... you have a new type of problem set on your hands. You'll need to do the same sort of process but motivate with carrots rather than fear. This really starts to get business specific. If you give more info maybe I can offer more ideas.
Good luck!
- I bought the book because Tom Byers is great, although I haven't read it cover to cover.
As much as it's possible to reduce entrepreneurship to 'theory', this book does a good job of it. It's good to be able to structure your thinking about strategy and marketing and operations etc, although I think in reality most entrepreneurs are so busy trying to execute that strategies are pretty quickly thrown out the window :)
Check it out in the library or bookstore before you buy it. An alternative is New Venture Creation by Timmons and Spinelli, which I quite like.
