Sunday, May 22, 2016

Make Your “Startup Ready to Launch!” Parts One & Two

Posted first here, then LinkedInGoogle+Twitteretc.

Preparing Rocket for Launch
Courtesy of US NASA
“When telescopes work [bringing an entrepreneur’s future closer to change the world], the world is full of stars.  When they don’t, everyone whips out their microscopes  [and focuses on the details and flaws],” says Guy Kawasaki in his first The Art of the Start.  “The reality is that you need both microscopes and telescopes to achieve success, [and the key] is to survive the microscope tasks while bringing the future closer.”
As part of the microscope tasks, Entrepreneurs need to set up their business with the following, via attorneys, accountants, government resources, academic and community education, online courses and the many books.
Then you can “Rocket Your Ready-to-Launch Startup” using something like our Startup 2.0™ Steps.

Start with a draft Overview using the content in our Mission, Market, Management and Money™ 2-pager.

 Mission – one paragraph – there are many definitions – pick one or use the following that makes up your 1-minute power pitch.

  • Problem – that needs solving.
  • Solution – yours that is unique and powerful (such as reduce marketing cost and time by 30% each).
  • Purpose – motivating to you, associates and partners.

 Market – in which your solution can make a difference – another paragraph (examples)

  • Target Demographics– type of business (commercial real estate brokerage); revenue range (10mm+); number of workers, if revenue doesn't define well enough (40+); typical expenses as a percentage of revenue (80%, according to Forbes); length of time in business (3+ years); growth rate (5%+).
  • Size – number or monetary magnitude (15,000).
  • Penetration – expected – percent or monetary magnitude (10%).
  • See Library and Paid Market Databases.

 Management – make a “deep bench” that is strong enough to adjust to a changing market and attract people and financial resources – show off the resumes, pictures and links to online profiles such as on LinkedIn.

  • Founders and CxO's – ask for full dedication in hours available; Founders generally earn a bill-paying salary and a percentage of profits via their equity; offer CxOs a percentage equivalent to $200K-$500K in 5th year – more if bring money or IP to the table.
  • Board of Directors – ask only 2-4 hours per month; offer a percentage equivalent to $60-100K in 5th year.
  • Advisors – few or no meetings; ask for only an hour or two a month; offer a percentage equivalent to $30K in 5th year.

 Money – Current or Projected – 3-5 years.

  • Expenses – be as certain as possible; indicates how much you really know about your business; show contingency planning – even a restart.
  • Income – reasonable estimates – 20%+/-; make sure exceeds expenses and soon; work backwards from Income to determine lead population.
  • Net Income – straight math – don't advertise publicly in conjunction with an investment amount and percentage received (to avoid SEC complications); don't make ROI claims publicly – provide the data and let financiers figure their own ROI.

Show Use of Funds

 Investors of all kinds – time, connections, equity, debt and delayed payment – want to know
 Show how each tranche will be distributed
 Be as certain as possible

Establish your Incorporation type – Sole, Partnership, LLC, S-Corp, C-Corp

 LLCs are a good place to start
 An LLC can become a full C-Corp

Determine your starting Location – virtual, home, office, facility

 Home is a great choice

 Many work spaces are springing up at reasonable rates
 Check unused office or warehouse space
 Establish a legal address besides your home or a PO Box
  • Forward ALL your mail – to home or wherever you are in the world
  • The Post Office is not forwarding financial- type mail – or what looks like it 

Part Two

According to consultant John Mullins, in his book, The Customer-Funded Business, only 1% of US startups receive equity funding, and it is worse in other countries.

Why?  Most likely, the other 99% of entrepreneurs did not set up their business well then learn to “Rocket [their] Ready-to-Launch Startup” using something like our Startup 2.0™ Steps.

Make sure your Patents are submitted

Licenses and Licensing

 Obtain your Business Licenses

  • Be registered properly
  • In-Home zoning restrictions could be an issue if too much traffic, employees, noxious chemicals or noise
 Obtain all other Licenses that you will need
 Think seriously about Licensing your IP if it is the majority of your startup, since:
  • Inventions will generally net about 20% of the profit – when up to speed
  • Allows you to invent, license then move on to the next invention

Decide on and begin to use your Bookkeeping method and Software

 Start out with something that’s transferable to other systems
 Software allows quick Profit/Loss Statements and other Financials
 Need to be very current – not more than 30 days – for banks and many other financiers

Select and start using your Professionals

 Attorney
 Accountant
 Bookkeeper – find through Accountant
 Consultants
 Coach

Initial Funding will show other sources how you’re managing the money

 Credit Cards
 2nd Mortgage(s)
 Friends & Family
 Suppliers
 Customers
 Associates
 Convertible Notes
 Seed Capital

Join Professional Groups

 LinkedIn
 Meetup
 Clubs
 Chamber(s)

Here are some more Resources for set up

 Gale Courses – online and free at many libraries
 Guy Kawasaki’s The Art of the Start books
 City, State, SBA, SCORE, some Chambers – though schedule may not be frequent enough, sometimes retreaded information from last Century; no consistent plan; and worth about what’s paid
 More of this information is available by contacting us

More to come on the Startup 2.0™ Steps

Feedback and suggestions are always appreciated here, by message or email.

Thank you very much, Kenton, USA 302KentonJ

LinkedIn • BRIEF • TEAM & Aggregate Resume • Startups 2.0™ Meetup (Denver, 4pm Mondays:  main, 1st; work session, 3rd)