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Venture Accelerator

INSTITUTE FOR ENTREPRENEURSHIP

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Recap last week:

*Pricing intro

*Alison - Sales approach

*Dan - BillGo

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Pricing

Questions?
You’ll present a price on Thursday…ask now

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Sales

Clarity, Confidence, Connection, Courage, Cash
“Holding the Baton”
Practice getting rejected ASAP
Energetic Buy-in

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Dan Holt

Know your core competency
Set your own boundaries
Understand what is urgent & important (Eisenhower Matrix)
Take time to do Life Visioning
Hire the right person for the right role; fire fast

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Check in:

Mental Health
Prioritization
Time Management

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Forecasting & Budgeting

vs

Bookkeeping

WHAT’S THE DIFFERENCE?

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Forecasting from Zero

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Market Sizing (Opportunity)

Total Addressable Market (TAM)

the whole of the market you could serve with no competition if everyone buys

Serviceable Addressable Market (SAM)

Market you can realistically serve; consider distribution, location, pricing

Serviceable Obtainable Market (SOM)

Market segment you can realistically serve in the coming (or first) year or other defined period

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Market Sizing (TAM, SAM, SOM)

Will this be accurate?
What is the point?
How many data points/sources?
Using dollars vs. people/units

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826,000 FF stores globally

8,000 FF stores in Chicago & Minneapolis

112 FF stores in Chicago & Minneapolis w/out competition

2500 foodies in XYZ zip codes

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Market Sizing - Let’s Practice

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Market Sizing - GS Cookies

Imagine you’re a Girl Scout

TAM - the whole of the market you could serve with no competition if everyone buys

SAM - Market you can realistically serve; consider distribution, location, pricing

SOM - Market segment you can realistically serve in your first selling season

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Remember break-even point?

How does SOM play into that?

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Terminology

Business Model
Revenue
Cash Flow
Proforma
Budget
Accounting Books

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Forecasting: Bottom-up vs Top-down

Bottom-up

HOW you’ll make your sales happen
We’ll sell to local stores (20) in 2024, with an estimated close rate of 30%
We’ll grow to state-wide in 2025 which is 385 stores

Top-down

We’ll get 2% of the market (TAM/ SAM)
We’ll close 10% of our SOM in year 1

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Bottom-up: GTM strategy

Channel	Year 1	Year 2	Year 3	Year 4
Direct to Consumer (in person)	Fort Collins farmers markets	Colorado farmers markets	none	none
Wholesale	none	Fort Collins stores	Colorado stores	Southwest Region stores
Online (Direct)	none	Colorado	Southwest region	West
Online (3rd party)	none	none	none	(prepare supply chain)

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ACTIVITY: Your Bottom-up GTM strategy

Sales Channel	Year 1	Year 2	Year 3
Direct to Consumer/ Biz (in person, online)
Wholesale through a retailer
Distributor

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Bottom-up: GTM forecast - Year 1

Channel	Year 1	Opportunity	Conversion	Units sold
Direct to Consumer (in person)	Fort Collins farmers markets	2 x 30 weeks x 200 people	10%	12,000 x 10% = 1,200
Wholesale	none	0	NA	0
Online	none	0	NA	0

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ACTIVITY Bottom-up - how much can you sell? (repeat for future years)

Channel	Year 1	Opportunity	Conversion	Units sold
Direct to Consumer (in person)	how?	how many ppl could you reach?	industry averages	Calculate
Wholesale
Online

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Bottom-up: GTM forecast - Year 2

Channel	Year 2	Opportunity	Conversion	Units sold
Direct to Consumer (in person)	Colorado farmers markets	25 x 30 weeks x 200 people	10%	150,000 x 10% = 15,000
Wholesale	Fort Collins stores	8 x 52 weeks x 1,000	3%	416,000 x 3% = 12,480
Online	Colorado target	eyeballs from ads	1%	100,000 x 1% = 1,000

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Where are the assumptions?

Channel	Year 2	Opportunity	Conversion	Units sold
Direct to Consumer (in person)	Colorado farmers markets	25 x 30 weeks x 200 people	10%	150,000 x 10% = 15,000 Revenue = 15,000* $50 = $750k
Wholesale	Fort Collins stores	8 x 52 weeks x 1,000	3%	416,000 x 3% = 12,480
Online	Colorado target	eyeballs from ads	1%	100,000 x 1% = 1,000

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ACTIVITY Where are the assumptions you’re making?

Channel	Year 1	Opportunity	Conversion	Units sold
Direct to Consumer / biz	how realistic? what are the risks?	how do you know this? might you be wrong? what is the impact of rain?	guess and test	worst case? best case?
Wholesale
Online

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what does it cost to pursue your GTM strategy?

SPEND $$ to MAKE $$

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Bottom-up: forecasting expenses

Channel	Year 2	Human Needs	Materials/ other costs	Profitability
Direct to Consumer (in person)	Colorado farmers markets	2 ppl x 25 x 30 wks x 8 hours x $15 hrly wage = $180,000	set-up, inventory, travel, marketing - $50,000	$750,000 rev -$480,000 COGS $270,000 -$230,000 sales exp
Wholesale	Fort Collins stores	8 x 3 meetings x 5 support calls = 1 - 2 sales ppl	swag,

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ACTIVITY Bottom-up: forecasting expenses

Channel	Year 2	Human Needs	Materials/ other costs	Profitability
Direct to Consumer (in person)				$X rev -$Y COGS $Z gross profit -$A sales costs
Wholesale

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Sales Forecast Worksheet

LINK

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Basics of Small �Business Accounting

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Best Practices

Separate finances and be careful what you spend

Track records and accounting

Update weekly and review monthly

Keep track of receipts and who will owe/need 1099s

Set calendar reminders for billing

Make timely payments and build credit

Create professional invoices and reminders

Stay consistent with billing process

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8 Steps to Clean Books

Open a business bank account linked to all points of sale
Itemize all expenses by type and department
Adhere to all income, employment, and excise taxes
Set up a payroll, savings, and documenting system
Identify the right payment gateway for your needs
Understand the tax obligations for your type of business
Regularly review bookkeeping and evaluate your processes
Consult with a professional or CPA as your revenue grows

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Financial Statements:

Income Statement or P&L

Cash Flow Statement

Balance Sheet

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Cash Flow Forecasts & Projections

A cashflow forecast is a prediction of your most likely future cash flow income, whereas a cashflow projection will factor in alternative scenarios to determine what future cash flow might look like.

Create a cash flow/sales forecast
Create a profit & loss forecast

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Profit and Loss Statement (P&L)

Includes:

Time Period
Revenue
Direct Costs
Gross Profit
Indirect Expenses
Net Profit

ACCOUNTING

Salaries and wages are the most confusing part of P&L statements. Salaries of people in administrative roles are not directly related to revenue, so they are included as fixed expenses.
It can get tricky when it comes to manufacturing roles. The labor used to directly make a product is included in the cost of goods sold section once the product is sold.
The labor that went into the unsold inventory is not included in the cost of goods sold section. And yet, they are not a fixed expense either, so the labor that went into unsold goods is not included at all in your current P&L statement.
Instead, you’ll include it under the cost of goods sold when that inventory is actually sold, and before then, it’ll be tracked on your balance sheet.

Other Terms for P&L: earning statement, revenue statement, operating statement, and statement of financial performance.

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Balance Sheet

Includes:

Current Assets
Long-Term Assets
Other Assets
Current Liabilities
Long-Term Liability
Owner’s Equity

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Schedule C

This is where your Profit and Loss Statement (P&L) and Balance Sheet will come into play!

Make sure to keep track of and declare any 1099s.

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1099 Form

The 1099 form is used to report non-employment income to the IRS. Businesses are required to issue a 1099 form to a payee who has received at least $600 or more during the tax year.

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THURSDAY: Funding Pitch

Structure: 5 min Pitch with 4 min Q&A from mentors
Use this presentation for:

Testing Your Assumptions
Asking Advice
Constructive Criticism

Goals: Demonstrate progress, Pressure-test sizing, pricing, and cost analysis

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Funding Pitch Elements - 6 slides

Clean, clear elevator pitch (20 sec)

Demonstrate focus on: Problem, solution (exactly the solution), first segment

Key learnings since last funding pitch (45 - 60 sec)

Customer & competitor discovery (if you haven’t spoken to more humans, do that TODAY)
what else have you tested and learned?

Cost Summary (fixed, variable by line item) (60 sec)
Market Size (30 - 45 sec)
First Pricing Strategy (Pricing + Reasoning***) (60 sec)

May include competitive landscape to show your price positioning

ASK: Request for Funding (be specific) (30 sec)

***probably most important element - show you have done the work to know WHY you’re pricing how you are

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This Week

Tomorrow - 2 guest speakers

Funding Pitch Thursday!

All sections are required; No funding without each element done with research and critical thought

Start: Sales Forecasts�(Due July 21^st)
Setup office hours over next 3 weeks to review/fine-tune your projections with Sidnee Peck
Watch Micro-Learnings

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Thank you!