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Angie Mohr. Finance & Grow Your New Business
FINANCE & GROW YOUR NEW BUSINESS. Get a Grip on the Money
Introduction
Part 1. INTRODUCTION
1. So, What Kind of Business Should You Start?
Introduction
Why Do You Want to Be an Entrepreneur?
Money
Freedom
Empire building
What Kind of Business Should I Start?
Manufacturing business
Retail/Wholesale business
Service business
Case Study
Eight Questions to Ask Yourself
Chapter Summary
2. Is It a Business or a Hobby?
Introduction
Case Study
What Is the Difference Between a Business and a Hobby?
It’s Not Always about the Money
Chapter Summary
3. Build or Buy?
Introduction
Building a Business from Scratch
Case Study
Buying an Existing Business
Financial Considerations in the Build-versus-Buy Decision
Considering a start-up business
Sample 1: Cash Flow Projection for a Start-Up Business
Sample 2: Discounted Cash Flows for a Start-Up Business
Considering a business purchase
Sample 3: Cash Flow Projection for a Business Purchase
Sample 4: Discounted Cash Flows for a Business Purchase
What’s Right for You?
Chapter Summary
4. Getting Your Personal Finances in Order
Introduction
Case Study
Your Retirement Goals
How much will you need at age 60?
How much do you have to put away between now and retirement?
The Concept of Net Wealth
Debt Management
Your Credit History
Insuring Your Assets
Life insurance
Mortgage insurance
Property and casualty insurance
Health insurance
Chapter Summary
5. Setting Your Business Goals
Introduction
Chasing the Almighty Buck
Case Study
What Is the Purpose of Your Business?
The Business Plan
Sample 5: Business Plan Outline
What Should Your Business Plan Include?
The Monthly Management Operating Plan
Your Exit Strategy
Chapter Summary
6. Putting Your Money Where Your Business Plan Is
Introduction
Projecting Your Funding Needs
Paying for the start-up costs
Case Study
Providing liquidity to the business
Sample 6: Cash Inflows
Sources of Funding
A Bank’s Perspective
Chapter Summary
7. Debt Financing
Introduction
Your Own Resources
Credit Cards
Suppliers
Friends and Family
Banks
Table 1: A Quick Reference to Ratios
Leasing Companies
Private Lenders
Chapter Summary
8. Equity Financing
Introduction
Common Shares
Preferred Shares
Partnership
Table 2: Equity Statement for a 50/50 Partnership
Joint Ventures
Venture Capitalists
Chapter Summary
9. Risky Business: How to Assess Business Risk
Introduction
Secured Loans
Case Study
Personal Guarantees
Fixed Price Agreements
Interest Rate Risk
Foreign Exchange Risk
Economic Dependence
Chapter Summary
10. Home Sweet Home
Introduction
Does It Really Save Me Money?
Case Study
How Will It Affect My Personal Life?
The neighbors
The on-call syndrome
The convenience
Willpower
Chapter Summary
11. Choosing Your External Team
Introduction
Your Lawyer
Case Study
Your Accountant
Your Financial Adviser
Your Board of Directors
Chapter Summary
12. Assessing the Competition
Introduction
Identify the Competition
Case Study
What Do They Do Right and Wrong?
How Are They Positioned to Take Advantage of Opportunities?
How Vulnerable Are They to Changing Market Conditions?
How Do You Stack Up?
Competitive Analysis
Intelligence Resources
Chapter Summary
13. Forecasting Profit
Introduction
Keep Your Bookkeeping Up-to-Date
Always Forecast a Rolling 12 Months
Tighten Up Billing and Collection Policies
Hire Someone to Do It If You Can’t
Keep on Top of Changes in the Operating Environment
Keep the Work Coming In
Continually Assess New Sources of Financing
Chapter Summary
14. Investing in Labor
Introduction
The Cost of an Employee
Salary
Employer taxes
Office space
Fringe benefits
Case Study
Calculating the Benefit
Direct labor
Indirect labor
Your Billing Multiplier
Five Signs It’s Time to Hire
Chapter Summary
15. Investing in Equipment
Introduction
To Buy or Not to Buy
Erosion
Financing
Risk
Chapter Summary
16. Financing Expansion
Introduction
Horizontal Expansion
Increase your capacity
Expand your geographic area
Develop new products or services
Case Study
Develop a franchise
Find new markets for your existing products and services
Vertical Expansion
The Dangers of Expansion
Liquidity issues
Triggering call provisions
Increase in fixed costs
Calculating the Benefits of Expansion
Table 3: Cash Flows for Grace’s Market Garden
Table 4: Discounted Cash Flows for Grace’s Market Garden
Finding the Money to Expand
Chapter Summary
Part 2. GROW YOUR BUSINESS
17. The Successful Entrepreneur
Why Small Businesses Fail
Managing versus Doing
The Four Foundation Walls
Case Study
Diagram 1: The Four Foundation Walls
Entrepreneurial drive and vision
Record keeping
Financial management
Planning and strategizing
Checklist 1: The Successful Entrepreneur
Chapter Summary
18. The Life Cycle of a Business
The Three Stages of a Business
Diagram 2: The Life Cycle of a Business
Infancy
Maturity
Decline
At What Stage of the Life Cycle Is Your Business?
How Can My Business Use This Information?
Checklist 2: The Life Cycle of a Business
Chapter Summary
19. A Systems Approach
Anatomy of a Franchise
A Real-Life Example
Case Study
Benefits of a Systems Approach
Case Study
Your Business as a Machine
Becoming the Head Mechanic
Checklist 3: A Systems Approach
Chapter Summary
20. Analyzing the Status Quo
Entrepreneurial Drive and Vision
Record Keeping
Financial Management
Case Study
Planning and Strategizing
The Busy Entrepreneur
Diagram 3: Typical Time Chart for a Business Owner
Diagram 4: Recommended Time Chart for a Business Owner
Defining Processes and Procedures
Case Study
Checklist 4: Analysing the Status Quo
Chapter Summary
21. Growing Your Business
Your Business Goals
Profit
Case Study
Freedom
Recognition
Peace of mind
Planning for Growth
Good versus Bad Growth
The Three Ways to Grow Your Business
Attracting new customers
Selling them more
Selling to them more often
Leverage Revisited
Checklist 5: Growing Your Business
Chapter Summary
22. Getting a Handle on Your Revenues
How Many Customers Do You Have?
Sample 7: Customer Survey Form
Case Study
How Often Do Your Customers Come to See You?
Sample 8: Billings by Customer Report
What Do Your Customers Spend?
What Kind of Customers Do You Have?
Case Study
Fire Away!
Sample 9: Terminating a Customer
The Next Step
Checklist 6: Getting a Handle on Your Revenues
Chapter Summary
23. Your Strategy
Your Business’s Vision Statement
Sample 10: Vision Statements
The Mission Statement
Sample 11: Mission Statement
Case Study
Your Operational Plan
Checklist 7: Your Strategy
Case Study
Chapter Summary
24. Testing Change
Advertising
Case Study
Prices
Environment
Case Study
Checklist 8: Testing Change
Chapter Summary
25. Your Product or Service
Why Should Customers Buy from You?
Competing on price
Competing on value
Case Study
How Is Your Business Different?
Selling a Product
Up Selling
Providing a Service
Case Study
Teaching Your Customers
Checklist 9: Your Product or Service
Chapter Summary
26. Your Customer Interactions
Telephone Interactions
Sample 12: Telephone Interactions
The Art of Closing the Deal
Case Study
Getting more people to call
Increasing your conversion rate
Sample 13: Potential Customer Interaction Review Form
Using Scripts
Sample 14: Telephone Script
Case Study
A Word about Screening Callers
Tracking Conversion Rate Changes
Checklist 10: Your Customer Interactions
Chapter Summary
27. Your Marketing and Promotions
The Lifetime Value of a Customer
Case Study
Covering the Cost of the “Dry Holes”
Case Study
Customers Beget Customers
Checklist 11: Your Marketing and Promotions
Chapter Summary
28. Your People
How Do You Know When It’s Time to Hire?
Case Study
What Will a New Employee Do?
Sample 15: Documenting Your Work Process
The Laws of the Land
Attracting Quality Employees
Sample 16: Employee Advertisement
The Interview
Hiring from an Employment Agency
Goal-Based Compensation
Case Study
So Long, Farewell, Auf Wiedersehen, Adieu
Checklist 12: Your People
Chapter Summary
29. Your Systems
The Goals of Systemization
Case Study
“How We Do It Here”
Case Study
Continuous Improvement
Sample 17: Human Resource Policy
Checklist 13: Your Systems
Chapter Summary
30. Your Systems
Another Way to Grow
What Are You Buying?
Asset purchase
Share purchase
Goodwill
Customer lists
Valuing the Acquisition
Sample 18: Valuing a Business Acquisition
Floor price
Ceiling price
Evaluating the Choices
Checklist 14: Business Acquisitions
Chapter Summary
31. Exit Strategies
Your Personal Goals
Heading for the Exits
Passing on the business to your children
Selling the business to an outside party
Liquidating your business
What’s My Business Worth?
Getting Ready for the Sale
The Mechanics of the Sale
Checklist 15: Exit Strategies
Chapter Summary
32. What Happens Next?
A Last Word
Resources for the Growing Business
Online Resources
Must-Read Books for Entrepreneurs
Glossary
Acknowledgments
About the Author
Notice to Readers
Self-Counsel Press thanks you for purchasing this ebook
Contents
