StartupCFO: 10 Critical Issues for Small Business

In fact, they consume way more capital. But, fundamentally, virality is a major driver of growth.

Enterprise startups target much bigger and more valuable customers. As a result, you need fewer customers and less capital relative to consumer in order to build a big business. Small business lies somewhere in between these two depending on whether your startup is targeting S or M. And unlike consumer where you discover new things through friends virality , small business owners are tougher to reach and tougher to convince.

Perhaps this is why many startups that start out targeting SMB move upstream to go after larger customers. Initially they targeted SMB.

Today they are an enterprise solution. There are many more examples like this one.

1. Modelling Freight Transport (Elsevier Insights).
2. The Portrait of a Lady : Volume I (Illustrated)!
3. StartupCFO: 10 Critical Issues for Small Business!
4. Why This New Race: Ethnic Reasoning in Early Christianity.
5. StartupCFO: 10 Critical Issues for Small Business by John Schenk (eBook) - Lulu.

This is equally true for a social network, mobile game or SaaS company. The key is to find scalable channels that let you acquire lots of users for less than you earn from them over time. This is where most startups fail when tackling SMB. They end up paying too much to acquire or they end up chasing bigger, more valuable customers. This consumerization of IT trend that started a while back is as relevant for a one person business as it is for any other business. These businesses need lots of working capital or a great receivables factoring solution.

If you are in a subscription-based business, you get paid up front for delivery over an extended period of time, so you tend to be cash-rich.

DO NOT assume that your boss actually understands the difference between accrual and cash accounting! They are often too embarrassed to admit their shortcomings. Having been in your position I agree with David. Keep the company lean and mean.

Try to keep everything on a month to month basis, instead of longer term contracts. This gives you the flexability to make cost cuts on the fly. Cash flow is king though. Dear Nolan - Conserve your cash and plan for the worst. New businesses typically over-estimate revenue, under-estimate expenses, and are too optimistic about the time until the business will break even.

• Download StartupCFO: 10 Critical Issues for Small Business by John Schenk PDF - Book Archive?
• Reflections (Nites Saga Book 2).
• SMB: The Third Market?

Few businesses have failed because they did not spend money fast enough. Good luck to you! Dave's answer is great. As a small-business owner myself, I can attest to the importance of cash flow. Get paid before you pay whenever possible.



Present clear and easy to understand information to your boss and try to understand the question behind his question. Cash flow shortages can kill an otherwise successful business. There will always be an unexpected expense or missed revenue. Lastly, one thing that has carried over for me from our household budget is to watch recurring expenses. If you have the cash, often times making a larger upfront investment will save you from recurring expenses that can eat away at your margins.

I assume you have a detailed business plan and execution time table. Since everyone knows that new businesses burn cash, you need to watch it like a hawk! Execute you business plan and maximize your successes and minimize your mistakes that are burning cash with little reward.

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It's an exciting time to be starting a new venture, but being the CFO in a start-up makes you reasonable to be very diligent on the use of the funds. Realistic and updated cash flow reports will be the life blood of your success or the root of your future challenges. I have to agree with Dave and the others.

Cash flow and burn rate is king - from firsthand knowledge of two experiences back in the dot-com era. The first was my own company, which I tried to fund from minimal start-up funds and purely through cash flow. I was eventually forced to fold my company due to cash flow crunch. Then I joined a high flying start-up back that had venture capital lined up at the door with huge checks at least for a while. Being fresh off my own experience, I counseled my employer, that despite the multimillion dollar checks coming in the door, to be mindful of their spending and to make prudent assumptions about how much and when to count on cash flow from the product and service.