How To Write a Business Plan Part 14 – Team Slide | Ep. #23 Business Podcast
Part 14 How to Write Your Business Plan
Whether you’re starting your business or growing it, you’re going to need some source of funding for your company. I lay out funding sources and how to figure out how much money you need.
We’ve covered your elevator pitch, problem, solution, product, market size, business model, traction, competition, barriers to entry, financial, and team slides for your business plan. Now we’re talking about how much money you need for your business💰
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Hello, friends. Welcome to another episode of Build a Business success Secrets. I’m your host, Brandon. See, White. And today we are on part 14 of our Siris on how to write a business plan. And today we’re tackling your funding slide as a quick review. Here’s where we’ve been. We started out with your first slide where we give our elevator pitch. And then we did another episode on your elevator pitch because it is so important to hook our audience very quickly, and we talked about the three mistakes to avoid. So if you didn’t catch that episode, go back and it is Episode 12 Part three of our Siri’s. Make sure you catch that. Then we tackled your problem. Slide your solution. Slide your product, slide your market opportunity, slide your business model. We talked about your attraction and future planning for traction. Your competition. Slide your barriers to entry or moat. Talked about your financials and projections. We talked about your team and how to set up your team slide. And today again, we’re talking about funding, so let’s not waste another second. Get right to it. All right, we are talking about funding. This is your next to last slide. So we’re almost finished. And the questions that we want to ask and ask ourselves and answer in this slide for our our audience and to be used as our own blueprint is how much money do we need to execute our plan? How much of it do we have right now? And where do we plan on getting the funding now? Regardless, if you are just starting a business and you’re growing it, we most likely are going to need funding at some stage within our business growth. Because if our business is taking off and we’ve got it started and now we’re growing it and sales are starting to take off, we’re going to need money for our cash flow, which we talked about in our finance slide and our financials air going to show that and they’re gonna lay out when we need money and how much of it we need. And then you always wanna have some sort of reserve in there to get us through tough times like we are in right now. We might have to have a few months of cash as a backup because revenue doesn’t happen as fast as we think or we have. Ah, disruption in production. Something can happen. And we wanna have that reserve. So for that, we’re gonna want to get some line of funding. Now that funding can come from many different sources, it can come from our own personal funding. We can fund it ourself. We could go the traditional route and go to a bank. Normally, that will require us to personally guarantee things. And that could be hard. Right now, Banks air really tight on requirements for businesses, obviously, because things are happening in our economy that have raised the risk of businesses so the banks don’t necessarily want to take that on. So a bank, and even in the best of times, a bank can be very stringent. So I’m not ruling that out for you. I’m just talking about what type of feedback and experience you should think about having when you approach the bank. Other lines of funding credit cards. Certainly you can do a lot with credit cards, and some credit cards are designed to help you. American Express has some really good programs with their credit cards, where they provide you a line of credit, or they extend your due date without interest. And there’s a ton of other ones out there. Capital One. There’s a Brexit card, which we’ve been trying for, one of the businesses that we have, and it’s done okay, but it has allowed us to have extended payables so that we can collect cash before we need to pay our bills. So credit cards is long as there used responsibly. Could be a great way to extend credit. Other ways could be that you raised a round of funding. You could also do that on a loan so that funding could come from friends and family. It could come from angel investors, and in some cases, if your business is a fit, you may go after venture capital. And once you go after and you qualify, so to speak for venture capital, then you move on to very advanced large types of funding with private equity firms and even the bigger investment banks. But that really starts with a venture investment, and ah, lot of entrepreneurs believe that the first place they go is the venture capital on. It’s because it’s sexy. It’s what everybody talks about, and having been a venture capitalist myself, I will tell you that venture capitalists rely on entrepreneurs. They are the venture capital customers, so to speak, without entrepreneurs. Venture capitalists really don’t have any business. They invest in entrepreneurs. Now Venture capital isn’t a fit for everyone’s business. I will tell you his story about that is I was in a very well known venture firm on Sand Hill Road in Silicon Valley, Paulo Alto and they were looking at one of the businesses that I was the CEO of and they wanna, Partners said. We just don’t think this is an adventure investable investment for our firm. We only think it’s worth a few $100 million and I said Thank you for that and most people would be rejected. The good news was was that they believed that we had a few $100 million business, but it still didn’t qualify for their fund and the reason is is because the fund where we were, which like I said, is very, very well known and we had the partners there is they have so much money, billions of dollars in their funds that they need to deploy money where the return isn’t going to be several $100 million Which do? You and me may sound incredible, but it simply doesn’t match what the financials that they have require as a return because they’re operating under a different type of model where out of 10 companies, maybe to hit it big to go, okay, and the rest die. So they need their winners to be incredible winners. So their threshold or their check list that they go through is they say, we believe this needs to be multi billion dollar company, because that’s what the return requires. So my point in telling you this story is that just because you’re not a fit for venture capital doesn’t mean your business stinks. Venture capital is used for a very specific type of company that is going thio grow extremely rapidly and for lack of a better way to put it, light the rocket and send it in the space. You’re not gonna you might pivot. You might make some corrections, but you’re going to space and you’re going really fast. And that’s what it’s really designed for theirs. And then once you have venture capital is Growth capital, which has a different checklist that they go through. And then friends and family, friends and family have a different type of checklist. So understand the type of business you have. Some people might just have a lifestyle, business and sometimes lifestyle businesses get a bad rap. These air businesses that grow at a decent clip don’t grow at 900% or 9000% a year. But they’re very good businesses that throw off great cash flow and some lifestyle businesses that I’ve seen with friends that I’ve had throw off several million dollars a year. That’s not a bad business. There’s nothing wrong with that. It all depends on the industry you’re in and how that market is designed. And what your job is is to figure out which bucket your business fits into and then approach them for the funding. So in this slide, what you are getting to is how much money are you going to need and when you’re going to need it? And then you’re gonna want to set goals, to be able to go get that money ahead of time so that you don’t wind up on the 30th of September and realize that you need to raise $400,000 to buy the inventory that you want and that you need that money in 30 days because 30 days is gonna be enough to create your deck, which you’re creating now. But you’re gonna turn your business plan that we’re writing here into a pitch deck, which isn’t hard. And we’ve we’ve set that up all along the way here. But you do have to adjust it for that audience like we’ve talked about the business plan that we’re building here is your roadmap is designed to recruit employees. It’s designed as a sales deck, and you can use it as a pitch deck. So all of these things are gonna have some nuances. But you’re gonna have to build it, practice it, reach out to people to get a meeting. Then you’re gonna have those meetings. And while sometimes you may get an investor on that first meeting, which I hope you dio, it doesn’t always happen like that. It’s just like dating. You don’t meet someone and then just go get married. I mean, well, maybe some people dio in Vegas or Reno now or somewhere like that, but in general. That just doesn’t happen. We have. We date, we have conversations with one another. We learn about one another. And we learned mawr of if we are a fit, so you really want to plan? And that’s why you hear me harp on this. Or should I say emphasize? I don’t want to use the word heart because that’s negative. But emphasize this over and over and over again. It’s because your financials tell the story of your business and what you’re gonna need. Like I said, the last thing you want to do is have a surprise. What? Let’s say your business is growing 300% month after month and you’re you found product market fit and you’re hitting out of the park. And then you realize that you need $400,000 September 30th to buy inventory, and if you don’t have it, everything’s gonna fall off. You’re gonna have all these orders that you can’t fulfill, and you don’t wanna be in that spot, and I don’t want you to be in that spot. So what you dio is use your financial modeling to come up with the funds that you’re going to need to identify the right source for the funding that matches your business and then build a pipeline to get it. One other tip. We’re a little bit long on this, but I want to drop one more. H P T for you is look for funding sources before you need it and go get meetings. Put a stake in the sand, and what I mean by that is have the meeting with the expectation that you will likely not get the funding because it’s either too soon or something. But have the meeting and set some goals with this entity or person and say you’re looking for funding, etcetera. And then in your milestone or your attraction slide set out where you wanna be. And here’s why. Because in six months you want to be able to open that door, back up and say, Hey, Mrs White, remember what we met and I explained to you what I was building, and I said that I would do this. You can look up the deck. I said I would do this and look what we accomplished. And now what you’ve said is a track record and your continuing a conversation and showing that you can accomplish the goals that you put down, which will give them confidence and setting up your funding. So with that, go back to your financials, figure out what funding you need and get it down on the slide. And one last thing. When you do set it up on the slide, you want to talk about the funding that you need the amount and then what you’re going to use it for, Really? That simple, All right? Or almost finished. We’ll see in the next episode. How good was that? Cool, right. All right, we are one slide away from completing your business plan. I am excited. Hey, if you enjoyed this episode, please hit. Subscribe so that you stay updated with all of our weekly episodes rate and review us. Give us some stars and let us know how we’re doing and tell a friend who you think would be interested in and pass on the love. Thanks for being generous with your time to help our podcast out until the next episode, when we wrap up your business plan, remember, you are just one business plan away. I’m rooting for your success. We’ll see you soon