Ah, the financial side of your business. If this is the stuff that makes your eyes glaze over (and yet you’re an entrepreneur)…you’re the person I wrote this post for.
I know a lot of us aren’t big fans of doing the financials, and I understand why you feel that way–after all, it’s certainly more fun to build a product than it is to work on the freakin’ numbers.
By the time you’ve read this post, you’ll be able to do a financial model yourself (without hiring a crazy-expensive CFO!), and you’ll know the following:
How many sales you need every month to pay all your bills.
How to price your products so you don’t lose money on each sale.
When to hire your next employee (or when to quit your job)–based on the sales goals you set.
When you’re going to run out of cash (or, alternatively, how much cash you’ll be able to pay yourself every month without going broke.)
How much capital you need to raise (if any!)
How to quickly assess your business every month to ensure you’re meeting the goals you set for yourself–and how to know quickly if you’re in trouble, before it’s too late.
In summary, this is the blog post I wish I had 11 years ago when I was getting started in business. Let me state this unequivocally: Building a financial model has been paramount to the success of my business. However long it takes you to build a model (and it won’t take you too long if you follow the path I’ve outlined below), it’ll be worth it. It may even save your business from going bankrupt–or enable you to quit your job or hire your next employee more quickly.
Now let’s take a look at what a financial model is and how to set one up for your business… (more…)
Starting a new business, but stuck on finding the perfect idea? I hear you. In fact, you’re not alone.
Recently, I asked people who opted-in for more information on my upcoming “Art of Email” course what they needed most in their businesses. Although many people said “Customers!”, several people asked how they would go about finding the perfect new business idea.
Let’s talk about that. I know the phase you’re in when you’re stuck on the idea. You want to start a business. It pays better (maybe!), offers more flexible time by allowing you to set your own hours, and gets you out from under the thumb of a boss. Plus, it’d be awesome to work for yourself and get people to sign up for something you’re doing for them.
The problem is making the leap from where you are now to actually having a successful business. In this post, we’ll work together on the first few steps to get you to the point of building your new business’s foundation.
First, to have a business, you need two clearly-identified items: (more…)
Years ago, when I lived in Silicon Valley, there was a core group of about 50 people–the “cool kids”–who would make or break any social application that came about. Even though it often seemed, back in those days, that Twitter was down more often than it was up, the “cool kids” persisted in their use of it, and so it grew. Twitter’s founding team befriended and embraced the “cool kids” and success ensued.
Twitter was successful on a small scale until 2009, when Oprah joined it and Ashton Kutcher became the first person to get 1 million followers. The “cool kids” had started the revolution, but Oprah marked the day when Twitter became mainstream.
Over the years, the core group of “cool kids” slowly fragmented. Some of the influencers, like Robert Scoble, went on to grow huge networks of their own. (Scoble currently has 325,049 followers on Twitter and nearly half a million followers on Facebook.) Others returned to running startups, blogging, or even working a day job, much as they had done before. The “cool kids” didn’t as heavily influence Facebook’s rise to the top of social media, and they barely registered a blip as Pinterest pulled in record-breaking amounts of obsessed followers.
Many startups today try to implement that same model of getting Silicon Valley’s “digerati” to pay attention to their app/website/new social media network/whatever. The founders are convinced that if only Robert Scoble will do a video of their new company, or if TechCrunch will write an article about their latest round of funding, that they, too, will be successful. They see the outside results of something like Twitter, without understanding the view from inside the Valley–and how much things have changed over the past few years. (more…)
There are lots of posts online about how to make your first dollar, or even how to grow a modest side business. But there’s precious little information on how to build a billion-dollar company.
Before we get into the how, though, there’s something I want to address–and that’s why. Why would you want to build a billion-dollar business?
Even if you have decided you don’t want to build a business that large, I encourage you to read this anyway…it may very well change your perspective on how large you want your business to be.
Pushing Through the FUD
There’s a lot of FUD (fear, uncertainty, and doubt) around building large businesses. In particular, news media loves to hate on “workaholics”–people who seem consumed by their work. Reporters dish on divorces or family fallouts stemming from overworked parents or people who just can’t seem to disconnect from their smartphones.
So, the logical choice, if building a huge business causes you to be overworked and potentially lose your family, is to start a smaller business, right? One where you can work on the side to begin with and not over-tax yourself. One where you can still see your family. One where you don’t kill yourself for your business. It seems like a utopian ideal. But is it really possible? (more…)
You may have noticed this is my first blog post in 2013. Despite this blog receiving over 1.2 million unique visitors last year, I almost gave up on it entirely. Here’s what happened…and the huge mistake I made (which probably isn’t what you think.)
I’ve been wavering back and forth on what to do with erica.biz for a while. Unquestionably, writing this blog has had a huge influence on my life. It’s allowed me to meet movers and shakers in the tech industry and beyond, connect with people who would normally be hard to reach, and it’s even made me some money. (Though likely less than you’d guess, given my traffic numbers, as I put my focus into building my tech startup instead.) Heck, having this blog even helped me raise a small seed round of investment for my tech company–the first time I’ve ever been able to successfully pitch to investors.
With the help of meditation, I dug into my real fears and concerns about running a popular blog. Eventually, I was able to pinpoint exactly when and why writing on erica.biz lost its luster for me. I was surprised to discover that it stretched all the way back to February 2010. That’s when I made a mistake–although I only knew it was a mistake in retrospect.
I wrote a survey and opened it up to you, my readers. The survey wasn’t a mistake–I got hundreds of responses, and they were incredibly valuable. But I asked one question that was problematic. (more…)