New Venture GMU Presentation by Silver Beacon Marketing

How will you know if you succeed?

Starting A New Venture

George BounacosSilver Beacon Marketingwww.SBMteam.com

Silver Beacon Marketing www.SBMteam.com

About George (aka Why George?)

GMU alum

Judge SOM business case competition

Fairfax County Consumer Protection Commissioner

COO, Silver Beacon Marketing

4 prior startups, plus federal and B2B work


Universal Successes





Without a mission and metrics,

how is success determined?


Qualified Successes

The Internet – inventors didn’t intend current use

Constantly changing storage media◦Tape (reel-to-reel, cassette)◦Optical drives◦Solid state drives◦Reset to cloud computing


Measure or

Perish

Organization

• Umbrella goal

• Strategic Plan – 6 mos.

• Marketing Plan – 6 mos.

• Tactical Plan – 1 month increments

Create a success metric



Why are we starting this venture? What is our financial plan? Who is accountable? How will we define success? When will our milestones occur?

Questions To Ask


Funny, but true concept #1


What does a startup business call Thanksgiving?


Thursday



Go All-In

New ventures are not 40 hour / week jobsPrepare to go all-inCommit:

◦Your time◦Your personal resources◦Your reputation


Warren Goes All-In

YourFour

Takeaways


Be RealisticFunding

Cash FlowSales ProjectionsCustomer Service




Funding Sources1.Bootstrapping

2.Savings

3.Credit cards

4.Family lending

5. Commercial lenders

6.Govt backed lending

7. Selling equity


Cash Is King

“Some people around here better get some perspective. My promotions budget at [company] was bigger than this whole place’s free cash flow.”

--COO to Morgan Stanley partner shortly before road show


Cash Is King

“Someone who owns the company writes on both sides of the paper.”

--the same COO after the IPO blew up


Cash Is King – The Simple Version

Pay yourself and the team

Pay your suppliers

Pay extraordinary expenses


Cash Is King – The Real Version


Pay your suppliers


Lower sales than expected




Pay your suppliers



Litigation / Insurance




Pay your suppliers



Litigation / Insurance

Debt servicing


Cash Flow – Famous Business Quote

Yesterday is a cancelled check.

Tomorrow is a promissory note.

Today is cash.

Graphic: allthingsd.com

Hockey StickProjections


Managers hate unrealistic projections


…but this projection is actual growth.



Sales Projections

Your organization’s sales growth will not ramp up like Twitter’s

Or Google’s

Or Microsoft’s


Sales Projections

KEEP IT REALOr

Go Home


Customer Service


Customer Service

25 people learn about 1 negative experience

Who knows if this is true?

Who cares?

Isn’t it enough 1 does?


Customer Service

Costs to acquire customers almost always more than to keep ones you have.

But who does that work?


Customer ServiceHiring people costs money.

Average customer service rep salary in Washington, D.C.:

$30,000

Fringe benefits:

$10,000

Explicit Cost:

$40,000 for one person


Customer Service

Who is answerin

gthe phone

when I go to lunch?

:sigh:


Customer Service

New organizations must budget customer or client service time.

That is time not spent making sales

…or working on strategy

…or doing anything but holding on to existing business.

YourFour

Takeaways


Be RealisticFunding

Cash FlowSales ProjectionsCustomer Service


BonusTakeaway



Change

Look for hidden competencies


Earth’s biggest bookstore


Starting a New Venture

KEEP IT REALOr

Go Home

How will you know if you succeed?

Starting A New Venture

George BounacosSilver Beacon Marketingwww.SBMteam.com