Start Up Essentials Advice New Founders Need to Know | John Colley | Skillshare

Start Up Essentials Advice New Founders Need to Know

John Colley, Digital Entrepreneurship jbdcolley.com

Play Speed
  • 0.5x
  • 1x (Normal)
  • 1.25x
  • 1.5x
  • 2x
7 Lessons (36m)
    • 1. Introduction 2

      2:55
    • 2. 1

      5:08
    • 3. 2

      5:51
    • 4. 3

      4:58
    • 5. 4

      5:07
    • 6. 5

      6:22
    • 7. 6

      5:13

About This Class

Are You Afraid to Start your Startup: Grab the Frameworks You Need to Succeed as a Startup Entrepreneur and Get Going!

dc9665e6

          ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

This Introductory Startup Course covers 36 Major Issues which are critical to startups.

                                   If you are considering a Startup and do not know where to start...start here! 

                                   I create a 6x6 Matrix of Topics which I describe in brief detail to give you the basics from which to build your knowledge of Startups.  Through this simple and easy to understand approach, I will discuss the Six Most Important Topics relating to Startups: 

  1. Startup Market 

  2. The Importance of Profit in Your Startup 

  3. Startup Plan 

  4. Raising Startup Capital 

  5. How to Value your Startup 

  6. Startup Investors 

                                   I have provided a Video of each Topic, with a downloadable Slide Deck in PDF Format.  I also include a PDF at the end with a text summary of all the issues covered so that you have a checklist to take away. 

                     ****************************************************************************************************** 

  "Good and Clear Information - It gives you a good idea of what to expect from, when you are creating a new business, doing the start-up process and it's a excellent entry to the course Entrepreneurs Guide to Start-up Funding"  

  Mario Valadas 

                     ****************************************************************************************************** 

                                   The Course should take no more than 45 minutes. 

                                   If you want to start learning about Startups, this introductory course is simple and straightforward and will introduce you to 36 of the major topics you will need to learn about if you are serious about Startups. 

  "A clearly communicated, well curated guide that delivers a nice summary of the most important elements to consider before creating a startup. I've put a lot of time, research, and creative brain-storming into a hopelessly long business & marketing plans. Taking this course helped me to remind me to focus on the most important elements and remove the clutter. It's not intended to give you everything you need to get started but it will give you an idea of the process and point you in the right direction for anything you're missing." 

  George Maier 

                     ****************************************************************************************************** 

           Have I missed a Startup topic you would like covered? 

           Have a question relating to this Startup course? 

Just message me here - I would love to hear from you!

Best John

Business Courses From John Colley You Might Enjoy

Accounting: Understanding Financial Statements - https://skl.sh/3aeQf9u

Mergers and Acquisitions The Essentials You Need to Know - https://skl.sh/2Rh3KPn

Investment Banking 101 - How to Evaluate a Crowdfund Opportunity - https://skl.sh/2ETgKVq

Investment Banking 101: How to Maximise the Sale of Your Business - https://skl.sh/2VNqcPV

Start Up Essentials Advice New Founders Need to Know - https://skl.sh/2SSlTmj

Founders Introduction to Venture Capital Fundraising Part 1 - https://skl.sh/2Qc4xiK

Founders Introduction to Venture Capital Fundraising Part 2 - https://skl.sh/2W1gq0f

Venture Capital Liquidation Preferences – Critical To Your Success - https://skl.sh/2KXRMI3

How To Find A Venture Capital Investor and Negotiate a Term Sheet - https://skl.sh/31sTFT2

How to Create a Winning Presentation for Venture Capitalists - https://skl.sh/2u2WLLe

Private Equity 101 - Entrepreneur's Guide to Private Equity Capital Raising - https://skl.sh/30nsBnv

Marketing Courses

Digital Marketing Blueprint - Design Your Own Digital Business - https://skl.sh/2VLbk6b

Transcripts

1. Introduction 2: Welcome to my course. An introduction to start ups. If you're new to the whole startup concept in the startup world, this course is to you because what I'm trying to do is to bring you the key headline points about the issues you need to understand when you address the whole startup world. Now, to make it clear and simple, I've split this into six stages and you can see in the hexagons on the right. Here they are, the market, the prophet, the plan, the capital, the value and the investors in the subsequent lectures were going to go through and take a look at the issues relating to the market aunt to see. You know what you need to understand about the market you want to enter. If you're going to create a successful startup, then we'll look at the whole issue of profit. It's all well in good as a startup generating revenues, but that has to be profitable revenues eventually. But it certainly must be cash generative revenues. And you need to understand all the numbers. Well, look beaten some detail about the issues off, how you go about planning or start up, and I'll give you some clear pointers to hang your your plan on through that raising capital is obviously critical. When you're starting a company. Andi, you'll need to understand some of the issues involved, and I'll take you through those in the capital section. The issue of value is important because at an early stage of value issue could be very contentious. When you're bringing in new investors. How much is your business actually worth at the outset? Most of the value is in the future value of the business if you're successful, so we'll go through some of the issues to do with that and then finally will discuss the whole contentious matter of how you go about getting investors into your business in order to grow it. This course will also introduce you to my six minutes strategist methodology, where I use these nested hexagons to bring a complex topic together in a simple manner, and you'll see at the end how the whole course hangs together. Using this six by six matrix. Finally, you may be aware that I've got a course very successful course on you. Timmy entitle the entrepreneur's guide to start up funding and at the end of this course. If you wish to go forward and learn more about startups, I'll have a special offer for you. So until then, I look forward to seeing you in the next lecture, where we're going to discuss the market. 2. 1: 3. 2: way. Welcome to the second part off my course introduction to start ups in this lecture, we're going to take a look at the whole issue off profit. Now I'm going to do this. As you may expect in six stages, they are the five year P NL, or profit and loss account. Take a look at revenue assumptions. Then we'll go on to cost assumptions, and this will bring us logically to e bit D A, which is earnings before interest, tax, depreciation and amortization. Then we're look atyour growth assumptions, and finally, this will bring us to cash flow. When preparing a startup and in the planning phase, you need to put together a five year monthly profit and loss account. You will use this to create the basis of your cash flow statement, and indeed, it's the template for your financial model. Into this plan. You'll need to build your capital and operational expenditure and integrate it so that you have a fully functioning integrated model. But at the end of the day, you need to watch your cash flow. The starting point for this model is your revenue assumptions. You'll need to work out what you're selling your product or solution for how many your cell and when you expect to sell them. If you're putting this together and into a spreadsheet, you'll probably do well to have a separate assumption sheet, which will feed into your P NL. And this enabled you to alter your revenue assumptions without changing all the cells in the P and L account itself. Following on from this, you'll need to look at your cost assumptions. What what is the cost going to be of producing your products? A solution so that you can identify your gross margins. When you're doing this, you need to think whether they're going to be scale economies as you increase the number of units sold. Considers the pricing of your product defensible. Or as time goes on, we'll competition road your pricing over time. Have you factored in quantity or promotional discounts, then below this below the gross margin line you'll need to modern your fixed costs, salaries, office costs, rent rate, electricity, marking, etcetera. This is called SGN a in US gap, but you'll need to have a full, fully thought out basis for all your costs. Assumptions. When you do this, it will bring thee logically to the e bit d a line, which is that the main profit line that investors and particularly venture capitalists, look at when they're looking at the profit being generated by your business. Earnings before interest, tax, depreciation and amortization is a critical line because it's not distorted by non cash items, particularly depreciation and amortization, or indeed, by the balance sheet structure, interest or by what you owed to the tax man. And remember, taxes only paid after you've made a profit, and it's there for a derivative number. Having done this, I think now through what your organic growth assumptions are going to be, how quickly and why do you expect sales to grow When preparing this, you may actually choose to run different scenarios to see one impact this has on cash flow and therefore how much working capital the business will need. Remember, it could be just as dangerous toe over trade and run out of cash as it is not to sell enough. You should then use this detail, profit and loss model to create your cash flow into this. You need to build your assumptions about the capital costs needed to set the business up. The ongoing operational investment costs your need as the business grows and run this on a monthly basis to include include the cash generated from the operations of the business. The key here is to identify the maximum negative cash position, which, when added to a contingency amount, shows you how much capital you're going to need to get the business up and running to a point where it's self financing, otherwise known as cash break even depending on the cash requirement, this will help you decide how much capital you need to raise on based on your assumptions how many rounds of finance you're going to require. So under this heading a profit, we've looked at the construction of the five year profit and loss account. How you go about creating your revenue and costs. Assumptions how this logically leaves you to e bit D. A. Your earnings before interest, tax, depreciation and amortization how you can then take this P and l account to build in growth assumptions going forward, which will enable you to understand the likely pattern off cash flow for your business when you're gonna reach cash for break even and how much financing you're going to need. So that's it for this lecture. In the next lecture, we're going to look at the business plan and how you're going to executing. 4. 3: 5. 4: to this fourth lecture in my course introduction to startups in this lecture, we're going to take a look at the whole issue off capital on the capital requirement. Your business is going tohave. The's six headings I'm going to address this are under our cap. Ex or capital expenditure or pecs. Operational expenditure lena mean 18 months cash burn. And finally, the question. How much cap, ex or capital expenditure is the costs you're going to incur when you set your business up and get things running? This is going to include things like legal and accounting and other professional services. Cost to make sure you're properly a set up to trade. Your need to carefully detail these costs into your business plan. And you should strike the right balance between thrift and efficiency and not cutting corners on investment, which may later compromise your delivery quality or your ability to operate efficiently. OPEC's operational costs will increase as the business grows. Businesses need working capital to operate. Think of it like the oil in your car's engine. As the revenue grows, your working capital comment will grow with it when your model includes and integrated balance sheet. This working capital is captured in the balance sheet and changes to kasher, adjusted by the working capital, giving a realistic cash forecast projection. So if you think about it, as you gain revenues, you have more money tied up in Scott stock on other working expenses on this will actually eat cash, and you need to look bay carefully at the things in your business, which consume cash on which generate cash. Lena mean means essentially, you should aim to watch every penny the dot com days of what point? 01 point out when it was. Never mind the cash burn measure. The hype are long gone. Reduced salaries can be exchanged for small equity interests. Your startup team, but a bit more about equity in a future. Lecture the 18 months runway. Now this is important when considering your question. Cash requirements going forward to make sure that you have raised enough. Kaplan, you have enough capital to run the business for 18 months. Remember, raising capital is very time consuming and your need to be able to do a capital race and then focus on the business and to achieving some milestones in the development of the business before your next capital raise. Remember, running out of cash is the cardinal sin. Investors will probably rescue, but almost inevitably on very, very expensive or highly dilutive terms. Cash burn is something I believe every CEO of every startup should know he should. There is opening cash position in the morning and is closing cash position at the end of the day. And watching a measuring your cash burn is absolutely critical. Understand where the money is going and continually ask yourself, Is this the best use of the money? Can I spend my cash somewhere else? Tomb or effect? Remember, money can only be spent once. Think, should you be doing something differently, or can you do it more efficiently? The final question is how much and all this analysis should enable you to answer the question. How much capital do you need to raise? You should include a contingency fund. I would use as much as 25% is a working number, and you should also have ranged a number. Run a number of scenarios, adjusting your assumptions to see what impact it has on cash. What happens if sales increase it twice The expected rate. What happens if it the take up is only 50% of what you've assumed? These are questions which investors are likely to ask you, so you'd better have the answers ready. So let's recap. We've looked at Cap ex OPEC's running Lena mean the 18 months runway, focusing on the cash burn and then drawing this all together to understand how much money you're going to need to raise to get your business off the ground. So that's it for the Capital Requirements lecture. And in the next lecture, we're gonna take a look at the whole issue off value. 6. 5: 7. 6: way. Welcome to the sixth and final lecture in my course introduction to start ups. In this lecture, we're gonna take a look at the whole issue off investors. The six topics We're going to address it under our the elevator pitch, the slide deck, the role equity sources, bootstrapping and six reasons. The elevator pitch is a much talked about concept, but it's very simple to explain it. Imagine you enter the elevator a lift here in the UK with an investor, you have just 60 seconds to pitch in your business. What do you say to him to get his attention and make him want to hear more? BC's typically, say, if you can't describe your business in one sentence, you either haven't thought it through or you don't have a compelling proposition. The slide deck is the Power Point presentation that you would give to potential investor to explain your business on this can be the graveyard of many a startup project. It's so important to get them right. I could go into this in a great deal of depth, but Guy Kawasaki put it very succinctly in his 10 2034 which is 10 slides 20 minutes, 30 point formed. I normally recommend 13 or 14 specific slides, but I completely agree with the whole concept of his approach. You need to consider very carefully the role you want from your investors. Do you want them to be passive or active? Are you going to give them a seat on the board? If you're investor has relevant business experience, you should try to find a way to benefit from it through a working arrangement that suits both of you and that may being having him on some form of advisory board. In this case, with this investor, it's not simply just about the money. Let's talk about equity sources very briefly. There are different sources of start up equity capital and they for early stage businesses . They come typically from 282 areas. One is either friends and family, and the other one is angel investors. And these are high net worth individuals, often successful entrepreneurs in their own right who are reinvesting in early stage businesses. You should be clear clear that if you're taking your agent ants harder and savings that she can afford to lose the entire amount on understands that This is a very possible outcome. Angel investors tend to be financially successful, people who are more sophisticated, and they understand the risks much better, but they may demand more for their money. As a result, let's look briefly at bootstrapping before you rush off to find equity investors. Are there other ways to finance this great venture of yours? At one level, credit cards can be useful bank loans or other debt loans, which do not involve use. Rending any precious equity is also a source, although very difficult to get, particularly from the banks. And at this time, this whole concept of starting from your own resources is called bootstrapping, a curious term referring to the act of pulling oneself up by one's own bootstraps, which is clearly a physical impossibility if you're wearing them at the same time. Finally, let's just look at this issue of six reasons. This is normally my final slide in the day, but it also works with the elevator pitch. I ask entrepreneurs to summarize their business in six. Of course, that's not the six minute strategist methodology, an approach six reasons why investors should invest in their company. These should be compelling and are intended to close the sale to convince the investors it would be folly to miss the opportunity to invest in your great concept, your great idea or great startup, or worse for you invest in somebody else's. So that's it. Let's have a recap Under investors, we've looked at the elevator pitch, the slide deck, the role you might want, the investor to play, sources of equity, the idea of bootstrapping. And finally, this punchy six reasons why the investor should invest in you in the final lecture. In this lecture course, I'm going to go back and summarize everything we've covered on Bring it all together in the six Minutes justice methodology with my next nested hexagons, and you'll see how this all hangs together.