We live in a world ruled by clickbait headlines, visual media, 280 character tweets, and Instastories that disappear within 24 hours. Blink, and you’ve missed an entire news cycle.
Well guess what, this same trend also applies to business plans.
With mass attention fading to 60 second sound bites; you can be sure that no one wants to read 3,000 words of text about your business. The formal 30-page business plan is thoroughly dead. If you don’t believe me, Google it. Brad Feld, a top venture capitalist in technology calls business plans an historical artifact. And I agree!
Unfortunately you can still see a business plan listed as a requirement for some loan applications. But stop and think about the purpose of the business plan. Its sole purpose is to convince someone who will never meet you that you have sound business judgement and a financial plan that will realistically result in you repaying your loan.
There are far better ways to convey this information than a written document that is outdated as soon as you hit print (or send).
So what should you do?
Well, an in-depth financial plan is essential. So build it first.
In that plan you’ll have to make a lot of assumptions about how your business will perform financially and each of those assumptions will be based on your knowledge of the markets you serve, the region you are in, and the specific products you sell.
Next, spend time documenting those assumptions that form the base of your plan. Do it in short crisp sentences –headlines really. Include the key facts about your market, products, pricing and capacity. Then turn that outline of key facts and assumptions into a powerpoint or visual presentation that has lots of pictures, graphs and very very very few words.
Finally, summarize your key points in paragraph form so that you can provide a bit of context or backup documentation that goes along with the powerpoint. Don’t worry too much about quoting data and studies, just link to any reliable sources online that illustrate your points.
In the end, you’ll end up with three short, crisp documents:
Each document can, and should, be kept up to date with simple edits at the end of the month, or season; or as you try new markets, products or add business lines.
Trust me, this is much easier to manage, and for the most part, your bankers will thank you.
To learn more about how to build a more profitable company and get the cash you need to grow, visit my website: https://www.cfoonspeeddial.com
The first place I recommend companies go to for business loans
Kiva is a modern marvel—it’s so good on so many levels. Kiva is my number one choice for the fastest, cheapest, least painful loan, and it’s the first place I recommend small and growing companies go for loans to support their growth.
What Is Kiva?
Kiva started as a global source for micro-loans to women in developing countries. It’s since expanded, but the premise remains the same—empower small business owners to succeed. In the US, small companies can raise up to $25,000 in loans at 0% interest. (0%=free money). You can’t beat that!
How to Get Started with Kiva
Loans are funded and completed by backers who resonate with a particular business. (Yes, this means its a crowd-sourced loan.) First you need to set-up your profile and tell your compelling story. What’s your backstory? Why do you need this money? What will you do with it? How will it benefit people? Be specific.
Then ask a trustee (like me) to endorse you. Follow this link to get started.
You’ll start your campaign by asking your friends or family member to back your campaign for $25 or more, which you will repay. For loans up to $10,000 Kiva will require you to recruit the first 20 to 30 lenders for your campaign. If you set a higher goal of up to $25,000 you’ll have to recruit 65 backers for your loan.
Once you’ve reached that threshold Kiva will publish your campaign on the site and you can start promoting it via social media and other outlets. The more support you build, the higher your campaign will be featured on the site and the faster it will get funded.
The companies I’ve backed have literally received loans from people all over the world.
Kiva also has grant support from other financial institutions and often offers significant matching funds to help you fund your loan. For example, you could benefit from a 1:1 matching grant which would mean $2 increase in your loan with each $1 you raise.
A Great Example:
In fall 2016, my client Bibber and Bell wine shop raised $10,000 on Kiva so they could expand inventory in advance of the holiday season. Not surprisingly, this is the high season for wine and liquor purchasing; owners Damian and Robyn knew that any wines they were able to purchase in September would sell quickly, allowing them the cash and profits to continue increasing their wine purchases through the end of the year. 16 months later and Bibber and Bell have repaid almost half of their original loan.
PS: Bibber and Bell also sells online. See the great selection and score some for yourself online via bibberandbell.com
Why I recommend Kiva:
Banks and other business lenders often will not make loans to businesses that are less than two years old. And if they will, the rates and terms are often very high. Plus, lenders will look closely at the credit history of the business owners, and often require a personal guarantee for the business loans. This can be an extra road block for small companies or business owners without a stellar personal credit history. Kiva looks at your willingness and ability to recruit people you know to lend money to you as proof of your creditworthiness - and it works! Overall Kiva has a 97% repayment rate for its small business loans.
For businesses that are short on cash a Kiva loan is often the fastest and cheapest way to raise the needed funds. Plus, while paying back your loan on Kiva you’ll actually be building a stronger credit history for your business -- which means better terms when you do apply to more traditional lenders.
Visit Kiva.org to learn more.
Are you ready to start on the path to profitability? Get my Financial Success Series, starting with the Seven Numbers Every Business Owner MUST Know, followed by access to monthly insights and my top resources to grow profits and impact.
How a farm-centric company built a profitable business using investor capital
Home Sweet Homegrown is a Farm-centric company, founded in 2013 by Robyn Jasko. The company started as a farm, grew into producing hot sauces and recently added a local cafe/restaurant to increase their profitability and sustainability.
They began the business by crowdfunding their seed money on Kickstarter, and in 2013, became the highest funded hot sauce business in Kickstarter history, raising more than $53,000.
Their unique value? They actually grow the food for their product. Which proved to be a blessing and an obstacle to growth.
After their 2013 Kickstarter success, they were featured on MarthaStewart.com and many other media outlets which led to an opportunity to sell their hot sauce in Whole Foods, but they needed enough capital to produce and bottle the orders—a challenge that sinks many beginning enterprises. So they started researching how to raise capital.
This story was originally posted on Slow Money NYC -- a non-profit organization that connects farmers, entrepreneurs and investors that are committed to creating a local and sustainable food system.
I'm re-posting the story here because growth capital is a huge need among most of the businesses I work with. This story clearly demonstrates the power of finding the right resources to support growth not just in the moment, but for the long-term.
This is the key to what Slow Money is all about nationally -- patient capital to support sustainable food and farming.
Full disclosure: I'm a proud board member and co-chair of Slow Money NYC.
How did you choose the right investors?
Knowing that choosing the right investors would be critical to their future success, Robyn looked for investors with a farm and sustainability focus. She wanted someone who understood their product, how it’s different from every other product, and most importantly wanted financial partners who mirrored her values.
She turned down one investor group because they weren’t aligned with Homesweet Homegrown’s values and the offer was not a good deal, financially, for the farm. So they kept looking.
They interviewed 4 angel investor groups before choosing Foodshed Investors NY in 2014.
In February 2014, she approached Foodshed Investors of NY (through Slow Money NYC), and, after two pitches in 6 months, she had 6 investors on board for a $90,000 convertible note, maturing in November 2017.
How did you prepare to pitch the investors?
Robyn knew the importance of good books, clear projections and succinctly telling the story of how you envision the path of growth and profitability will make or break a pitch. “I have a lot of spreadsheets,” she says. She was able to pull up all her numbers and share them with the potential investors.
But, for a good partnership, it’s not just about the numbers. The investors also came out to visit the farm, “which was exciting” to “show the farm and share it with a group of environmentally and sustainably-minded investors who saw our vision”.
What has raising capital done for the business?
The money raised allowed the farm owners to dive in, run the company full time and explore every business growth opportunity at full throttle for more than year.
Homesweet Homegrown demoed their product at Whole Foods for a solid year, they did markets every week, and their farm was able to grow.
In 2017, they had over 1,000lbs of peppers turned into hot sauce, and their product is distributed worldwide.
With the money they raised, Homesweet Homegrown was also able to open a cafe in Kutztown, which is doing really well. It has a very Brooklyn warehouse feel, and most of the food is harvested from the farm. But most importantly, it provides daily revenue — which has allowed Robyn’s husband to join her to work in the business and helped stabilize their growth.
What is your relationship like with your investors now?
Every 6 months, Robyn does a break-even analysis and compares it with their books to see how close they are. She’s very benchmark and goal oriented which keeps the business on track and makes her investors very happy.
They have investor calls about once a year, but their contact isn’t confined to that. Robyn also talks with the investors individually based on company needs and the investor interests and skills. For example, they had a distribution deal and teamed up with one of the investors to help get on that deal. Another investor helped them with patent advice.
Robyn calls on them for mentorship or to look over the paperwork. Her investors always give their time—and they often come down to the farmstand to just hang out or say hello. It’s a comfortable relationship.
“As investors, they’re long term partners for us.”
What have you learned through this process?
Stay focused on growing the business. We’ve had to adapt to keep growing; and to generate enough profit to support the family.
Projecting what you want to do to grow is an invaluable exercise for any business owner.
Outsource your bookkeeper and accounting. It’s important to get that part right, and not waste your time on it.
Find the right partner; and the deal that is right for your business. Don’t take the first offer if it’s not right.
Do not OVER raise, and be comfortable with the money you raise—terms and partnerships.
Have questions about how to start to raise money for your business? Send your questions to hello@CFOonSpeedDial.com and we'll answer you directly.
Too many business owners leave their personal lives out of the financial equation. They’re so focused on the business’ ‘success’ that they never stop to consider where they want to be in relationship to it—now and in the future.
The thing is, we’re not just business owners, we’re people with families, retirement goals and any host of other responsibilities.
You can’t separate yourself, your life and your future from your business.
If you’re not looking at where your family income needs to be now and in the future, if you’re not considering what you want your relationship to your business to be in the next 5-10 years, if you’re not PAYING YOURSELF then you’re walking a dangerous line that might not go the way you want it to.
When I start talking with business owners about their long-term goals I always ask how well they pay themselves, and you'd be shocked to know how many are barely paying themselves.
Fewer still intentionally take profit dividends from the company.
Believing that if you work hard and sacrifice you’ll get a big payout someday in the future is NOT A PLAN. For most entrepreneurs, it’s a fairytale.
Let’s be real. If you’re not paying yourself enough to support a comfortable lifestyle, family and future then you’re not going to be happy or thriving in your business. By the time you (and your family) start to resent your business you’ll be running short on options.
Funding your family needs first should be a top priority for every business owner.
In order to set realistic business goals you also have to be real about your family economy and how much you need in cash, savings and retirement funds.
You cannot separate your personal needs from your business goals.
If you’re a business owner and you’re not satisfied with your take-home pay, its time to integrate your personal financial needs, your future needs and your business financial strategy.
To make a solid plan for yourself, your business, your family and your future, schedule a call with me. On the call I’ll do an instant profit assessment of your business and we’ll discuss how your business can serve you better. A financial strategy call with me is free, whereas miscalculating your financial needs might cost you everything.
Hello 2018. Deep breath.
Here we are a few weeks into the New Year and many, if not most, of us have already given up on our resolutions and fallen back on our old habits.
Fine, I get it. I’m guilty of it too.
I had a 4 day exercise streak going, but the snow and big freeze that overtook NYC (and most of the east coast) in early January killed my multi-day record. I’m not giving up though, and neither should you.
Does this sound familiar? Come January, each of us is committed to making it our best year yet.
We start the year out strong, full of hope and chutzpah, a real GO GET IT attitude.
We’re going to smash our income goals. Watch our business grow. Eat healthy, move more, and on and on.
But something happens and all those big aspirations fall by the wayside until they’re picked up again next December, which is absolutely detrimental, catastrophic even, to your livelihood.
Here’s how NOT to let that happen in a simple 3 part process.
To turn a big vision and long-term goal into an actualized success follow this simple recipe.
Take DAILY action and support it with Focus, Repetition and Resilience.
Let’s break it down:
This process is one I go through myself and guide my clients to do as well.
I’m using this process right now with my client whose top priority is decreasing the debt she owes on the build-out of her bakery. It’s not going to happen overnight, but each quarter as the business grows, she’ll be able to increase payments and eradicate the debt.
To accomplish her debt eradication goal, Erica has to both increase sales (with new customers) and keep other expenses down. This one goal translates into two areas of weekly focus and action; without a system to manage it, she would likely fail to achieve her larger goal, costing her business tons of money in the long run.
All goals are attainable when you break them down into manageable pieces.
If you’re a woman with a growing business at or near $1 million in revenue and you’re ready to smash your 2018 financial goals, schedule a call with me. We’ll identify what your top weekly focus and your high priority actions steps this quarter need to be to make it happen.
Here it is, New Years!
Time to wipe the whiteboard clean and start again.
With all the people out there writing and coaching about business planning, I’m going to keep it simple and recommend that you start with just three words.
This is actually a New Year’s ritual I began about 7 years ago which has been popularized by business coach and social media expert Chris Brogan.
The 3-word practice is deceptively simple:
I love this practice because the challenge of choosing just three words forces you to zero in on your most important themes, values and priorities. In turn, they guide other crucial choices throughout the year. It's fun, effective and really helps connect the drier planning processes to both vision and values.
In the past, my 3 words have helped me keep motivation and intention alive long after most New Year's resolutions have quietly disappeared.
My 3 words for 2018 are:
Fierce is my label and touchstone for 2018. It describes this historical moment for women in business, politics and media. This is our time to be fierce, take risks, stand up, stand out.
This word will be my constant reminder to not let mediocre results, temporary blocks or the status quo define who I am or what I care about.
A node is the point at which lines or pathways intersect or branch, a central or connecting point. The word is commonly used in transportation, computer science and network diagraming.
I’m using the word Node to emphasize community and trust. In a network each node is critical to the flow of knowledge, experience and skills that define access and success. I see my writing, speaking and community-building as a node—a gathering point and a conduit for growing social enterprises.
The more we work together, amplify each other, and collaborate, the greater success and impact we will all have.
Gear-up means to get prepared, inspired, or to overcome a challenge.
This phrase really works for me because I love cycling. When I think about gearing up I have a strong physical feeling about the work involved in tackling a hill and an instinctual understanding of how important the right gears and shifting at the right time are to actually making it to the top of said hill.
In business, gearing-up is about leveraging systems to make the work easier. It’s about having a strong mental model for how you will move forward when faced with a challenge. It is about seeing the peak, persevering to the top, and knowing that the hard work is going to pay off in the end and you’ll be treated with a fabulous view and a sweet downhill glide.
Those are my three words. Simple with a whole lot of meaning behind them. And amazingly enough, they’ll keep me focused for the year ahead.
Things are complicated enough, we don’t need to add complexity to our guiding principles for the year to come. Pick three words, remind yourself of them daily, and use them as your guiding principles—it makes for a streamlined year.
If you want more details on the 3-word process, check out Chris Brognan’s #my3words post.
Most businesses owners I meet are so overwhelmed with keeping the day to day of their operation running — constantly putting out fires and responding to opportunities — that they don’t have the time or energy to think about strategy or execute on their brilliant ideas to really help the company grow.
They’re constantly reacting instead of doing what they do best; the thing that is usually at the core of their business.
This misallocation of resources (you!) is a plague for growth stage companies. The underlying problem is usually weak organizational structures and teams that don’t fully understand their role and the role the owner should be playing.
To better illustrate this dilemma, let’s look at The Oracle versus The Queen Bee.
In mythology, an Oracle is a priest or priestess through whom a deity is believed to speak. They give prophecy and see the future. They offer wise, authoritative decisions and opinions. In short, they’re the end of the road—they know all, see all and (in business) are responsible for all.
Oracles, unfortunately, are generally mysterious, all powerful, and terribly lonely.
The Queen Bee, on the other hand, leads a pampered life. No matter what, team member bees make sure that the queen is fed and pampered so she can perform the one task that is crucial to the survival of the hive. In a bee colony, the Queen’s primary role is procreation, literally giving life to the next generation of bees.
In business, the owner’s central role is to generate, grow and protect the financial well-being of the company. This could take the form of thought leadership, business development, nurturing customer relationships, or fundraising.
The specific Queen Bee role is not the same for every owner or company. Your Queen Bee role has to be the role that you as business owner are called to do, enjoy doing, and do better than anyone else in your company. This role is literally the lifeblood of the business.
Think about it. Would you rather be the all-knowing Oracle, the lady everyone comes to for ALL the answers? Or would you prefer the role of Queen Bee; a leader who does one thing incredibly well and leaves the rest of the tasks to specialized workers who collaborate to promote the wellbeing of the business?
Of course you want to be a Queen Bee. Imagine giving one task, the thing you love MOST, 80% of your attention. Running your company would be a different playground indeed.
So, HOW do you move from Oracle to Queen Bee?
You have to change the way you operate and help your team understand your new role, their roles and the importance of each.
I first heard about the Queen Bee role from my friend and colleague Mike Michalowicz. (Thanks Mike!) He also described the process for narrowing your Queen Bee role. The Queen Bee role is part of Mike's next book on systems and automation - so stay tuned for more!
Here’s how to get started with this dramatic shift:
(This exercise can be done in 30 minutes, although implementing will take weeks or months.)
First: List the top 10 roles and tasks that you spend time on in your business.
Use sticky notes to write down each thing as it occurs to you. One role or task on each note.
Second: Identify your Queen Bee Role.
During this process, ask yourself: “If I can only do one thing from this list what is the one thing that I have to do to keep the business running? Can I do this one thing over and over and be happy?”
Your Queen Bee role should be a role you enjoy, that is central to the business’ well being and fits your specific talents and knowledge.
*If you started with more than 10 tasks keep giving up tasks/roles until you have just one role left.
Third: Remove the obstacles that prevent you from focusing on your Queen Bee Role (“QBR”):
Repeatedly narrow your focus week by week until you can consistently spend 80% of your time on your Queen Bee role; without working more hours than you want to in any week! (Hello weekends, welcome vacation time.)
Yes, it will take time (weeks or months) to break the pattern of everyone on the team coming to talk to you about each little problem or question in the company.
To accelerate the change stick to your Queen Bee role!
Insist that your team make decisions without asking you first. Identify team leaders who are responsible for day-to-day problems and empower them to make their own decisions (and learn from their own mistakes) instead of depending on you.
You can do it! And trust me, everybody in the company will be happier.
My Queen Bee Role is working directly with business owners to build financial success and fuel growth.
How to get the cash you need to grow your business
The fact is, every business needs cash to expand. And, if you’re in business, you want to grow.
However, there are only 3 types of capital that can fund your growth, and a huge variety of ways to get that cash (I’m going to cover 10 of them). But first...
THE THREE TYPES OF CAPITAL
To be fair, people get creative with money, and there are some exceptions to the rules I’ve laid out (like crowdfunding campaigns that are treated by the IRS as income but which entrepreneurs treat as investments), but in the end, all capital can be placed in one of these three categories.
The key, however, to your successful growth is knowing where to get the money you need to grow, and matching the source of funds to your business’ needs and the stage of growth you’re in.
10 SOURCES TO GET THE MONEY YOUR BUSINESS NEEDS TO GROW
Money and Banking
Banking is a funny thing. With every deposit we are actually putting our money in someone else’s hands and trusting that it will be there when we want or need it. We’re also giving that institution the power and ability to use our money while it is held on deposit.
What do you know about what your bank is doing with your money?
Business owners often choose to open bank accounts at places that are physically close to us (convenient) or where we have banked previously (known). After all, if you’re going to trust your hard earned money to someone it should be an organization or institution that is secure and dependable. But in the age of electronic banking, proximity is not always the best indicator of convenience. And size is certainly not a guarantee of safety or security. So, when I think about choosing a bank, I’m primarily concerned with three additional factors:
For many people the convenience and security equation leads them to choose one of the country’s biggest banks: after all they are are practically everywhere (convenient) and dominate that marketing landscape (well known; I mean, doesn’t everyone bank there?)
But big banks are not necessarily trustworthy (cough, cough, Wells Fargo).
Nor are they the most in tune with the needs of small business owners.
There are literally hundreds of banking options available to you depending on where you live and assuming you have reliable internet access for online banking. There is even a website devoted to helping you find a bank that matches your needs and interests. It’s called Find A Better Bank. The website is tailored to consumer/personal banking but you can also use it to find a short list of banks to research further for your business banking needs. But how do you know what you’re looking for?
The banks I recommend fall into three major categories: Independent Community Banks, Social Impact Banks and Community Development Banks or Credit Unions. To understand all the options available to you, here’s an overview of each type of bank to consider. Each type of bank also has an industry website you can use to search for banks that serve your needs.
1. Independent Community and Regional Banks
About 80% of small business loans are originated by regional banks. This is because regional banks are still in the business of building relationships. They are more likely to actually get to know you and your banking needs; and may possibly be more flexible about things like monthly fees and how they evaluate your loan application. Where to find them? Look on the main street of your town or local shopping area. Or check out the members of the Independent Community Bank Association
2. Social Impact Banks
Some banks include a social impact mission in their business structure and core operations. To be sure this is a solid commitment (not just “greenwashing”) you can rely on institutions that are certified B Corporations. B Corp members meet the highest standards of verified, overall social and environmental performance, public transparency, and legal accountability. To find a bank that meets this standard, Go to the B Corp website, under Find A B Corp and put the word Bank into the search bar. You’ll get a list of banks that are B Corp members. Seven of the current listings are based in the US (two of those are based in NYC.) All will open online accounts that give you full access, even if you’re not based in the same city or state. If you need international banking check out The Global Alliance for Banking on Values, an independent network of banks using finance to deliver sustainable economic, social and environmental development. The Global Alliance for Banking on values posts member information on a global map (most of these banks active in the United States are also B Corps.)
3. Community Development Credit Unions or Banks
These are specific banks and credit unions that are dedicated to providing financial services to underserved and under-banked communities. If you are lucky enough to have one in your town or neighborhood you’ll find they are a great way to know your money will be used to support your neighbors. Plus, because they are small and geographically focused, you’ll have the benefit of building strong personal relationships with your banker. To find opportunities in your town/city check these lists:
When you compare these options to the large commercial banks you can expect to find:
The catch? Some of these banks could be considered somewhat higher risk than large commercial banks. However, with deposits insured by the FDIC or another regulator, risk is not a big factor for deposit accounts under $100,000. If your bank balances are generally at or over $100,000 then you’ll want to add risk analysis to your consideration of banks along with price, convenience and social impact. Also consider keeping some of your funds (such as profit reserves) at a second institution.
Maybe shopping for a new bank sounds like a lot of work -- but remember it’s YOUR money; and it’s up to you to be sure that your money is being used to build the world you want to live in (and leave to future generations).
Click here to download a spreadsheet you can use as a template for comparing different banks that serve your community -- It’s filled in with information from several New York City options which you may find helpful in your comparison shopping.
Hi, I'm the founder of CFO on Speed Dial and an enthusiastic social entrepreneur. I'm also into growing, preparing and eating good food. As a Brooklynite, I love my urban life; but also take every opportunity to get out in nature -- to hike, bike or kayak in beautiful places. It's how I restore my energy and find connections to the world.