Day 1 Day 1

Presented by Mona Reda

9/29/2015 1

Agenda

• What is a startup?

• Why startups Fail?

• How much do i need to have startup up and running?

– Expenses

– Working Capital

– Contingency reserve

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What is a startup?

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Why Startups Fail?

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Tell us about your startup?

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Coffee Break

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Cost of your Product/Service

Direct Cost

• They are always variable because they are related to production Ex :Labor cost, Raw Material

In-direct Cost

• Overhead costs not related to production of the Ex: Rent, Utilities, Advertising, interest on loans

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Pricing your Product/Service

Prime Cost

•Direct Labor

•Raw Material

Overhead Expenses

•Advertising

•Administrative cost

Profit Margin

Selling price

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How much do i need to have startup up

and running?

Expenses

Working Capital

Contingency reserve

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Startup Expenses

• The Expenses that you should have before open the doors of your startup

– Assets needed to start

– Legal requirements

– Marketing

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How much do I need to start my startup?

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Working Capital

• The Cash reserve you need to have on your opening day in order to meet your expenses while your business gets going.

• Examples : – Utilities

– Salaries

– Renting fees

For at least 3 months

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How much money do I need to keep my startup up and running?

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Contingency reserve

• It’s a money that put away for uncertainties that has negative economic impact for your financial plan

Risk Probability(P) Cost (C) Contingency Reserve (PxC)

Total Contingency Reserve

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Expenses Working Capital

Contingency Reserve

Total capital required

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Sources of Funding

Startup Cost Calculators

http://www.wsj.com/public/page/news-small-business-startupCalculator.html 9/29/2015 icealexandria 18

Day 1 Day 2

Presented by Mona Reda

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Agenda

• Funding Sources

• Who should i ask for money?

• Financial Projections

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Where your startup capital

could come from?

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Sources of Funding

Source of Funding Total %Startup Capital

Personal/Partner funds

Outside investors

Asset Related loans

Credit card debt

Bank Debt

Other

Total 100%

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What the investors need from you?

• What the investors need from you when they give you their money ???

– Make a return

– Safeguard the money

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Who should I ask?

Business Partners

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Family and Friends

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Crowd Funding

• In crowd funding you pitch your project on a platform that connects project creators to individuals from the public whose their money and decide the amount of funds they which to contribute

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Angel Investors

• Entrepreneurs who have already succeeded and made their fortune, may look to invest their funds in promising startups

Benefits :

– Experience

– Connections

– Understanding of Market opportunities

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https://youtu.be/keWxX62tC-0

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Business Incubators

• Provide support to startups, often from idea stage through early stages of development.

• They provide startups with

– Skills Training

– Business Advice

– Working Spaces

– Networking opportunities and connections

– Funding

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Business Incubators

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https://vimeo.com/57540852

Bank Financing

• When you seek a bank loan be prepared to demonstrate fully how you intend to spend the money they give you, and the potential of your business to repay the loan.

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Credit Cards

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Financial Projections

• Estimates of the future financial performance of a business .

• The Benefits of it :

– the financial plan translates your company's goals into specific targets.

– the plan provides you with a vital feedback-and-control tool.

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Starting Balance sheet

Working Capitals

Expenses

Funding Sources

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Payroll Projections

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Employee

M 1

M 2

M 3 M4 M5 M6 M7 M8 M9 M10 M11 M12 Total

Owner

Part time

Full Time

Total Salaries

Sales Forecast Product M

1 M 2

M 3 M4 M5 M6 M7 M8 M9 M10 M11 M12 Total

Product

Unit Sold

Sales

Total cost of goods

Profit

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Operating Expenses

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M 1

M 2

M 3 M4 M5 M6 M7 M8 M9 M10 M11 M12 Total

Advertising

Commissions and Fees

Licenses

Travel

Total Operating Expenses

Cash Flow

• Lists the flow of cash in and out of your business

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Cash M 1

M 2

M 3 M4 M5 M6 M7 M8 M9 M10 M11 M12 Total

Beginning balance

Cash inflow

Sales

Cash outflow

Income Statement

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M 1

M 2

M 3 M4 M5 M6 M7 M8 M9 M10 M11 M12 Total

Total Revenue

Total Cost of good sold

Gross Profit

Total Payroll

Total Operating expenses

Net Income

Financial Projections Applications

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