This presentation was delivered at the April 23, 2009 Smart-ups event in Eugene, OR by Dan Vishny (CFO for two start-ups companies). Dan is also known for having one of the top 10 best scores on the CPA exam - for the entire U.S.A.!
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Bootstrapping Entrepeneurs & Their Business Ppt
1. Bootstrapping Entrepreneurs & TheirBusinesses
A Marriage Made in _____ (fill in the blank)
Creating, Managing, & Understanding Startup Financials
Presented by Dan Vishny, CPA, MBA
(and Recovering Entrepreneur)
2. Successful Bootstrapping
• Define your goal
• Set the milestones
• Sprint to the milestones (it’s not a marathon)
• Invest in things that your customers see
• Discipline- set the rules and live by them
• Financial Advice
3. Financial Advice
• ♫ You gotta know when to hold em... ♫
• Don’t micromanage the finances
• Focus on getting the product to market
• The “Language” of accounting & finance
• Profit, Profit, Profit
5. Main Points to Convey
• You have done your homework
• You understand the costs involved
• You understand the market space
• Your assumptions are reasonable
6. Projections- Minimum Requirements
• 5 year Profit & Loss Statement
• 5 year Balance Sheet
• 5 year Statement of Cash Flows
• Valuation Statement and ROI Analysis
• Breakeven Analysis
• What if Analysis
• Assumptions
7. Breakeven Analysis
• Puts your business in perspective
• Worst case scenario
• Can you achieve break even and when?
– Compare to competitors
– Compare to last year
• Do you have enough production capacity?
• Do this analysis as often as possible
9. What If Analysis
What is the monthly breakeven in units based on various margins and increases in Marketing
Costs?
[---------------------- Margin Per Unit -----------------------]
10 $3,000 $3,500 $4,000 $2,500
$0 10 9 8 12
Marketing Costs $200,000 16 14 12 19
$400,000 21 18 16 26
$600,000 27 23 20 32
What is the monthly breakeven in dollars based on various margin %s and increases in Marketing
Costs?
[---------------------- Margin Per Unit -----------------------]
51,111 60% 65% 70% 40%
$0 $51,111 $47,179 $43,810 $76,667
Marketing Costs $200,000 $78,889 $72,821 $67,619 $118,333
$400,000 $106,667 $98,462 $91,429 $160,000
$600,000 $134,444 $124,103 $115,238 $201,667
10. Assumptions
Anticipate the Questions
• What will you charge for your product and
why?
• How do your marketing costs support your
sales growth?
• How do you scale up your business?
– How long? How much money?
11. Assumptions
Nail down the Costs
• Payroll- have you added 15% for payroll
taxes?
• Rent- get a quote from a broker
• Miscellaneous- add a cushion for error
• Detailed Cost Sheet