Cash is king. It is the oxygen of a business; without it your company is dead. There are two primary sources of business cash: revenue and capital funds. Generating revenue is the best approach. The goal is to create a sustainable business model which produces revenues, lots of it. This keeps your firm alive. Without revenues, you need to raise funds or die.
In a recent workshop for competitors of the CSU Blue Ocean Challenge (#CSUBlueOcean), Karl Dakin, of Dakin Capital Services shared his “7 Steps to 1st Dollar Revenue.”
Three of Dakin’s Steps to 1st Dollar Revenue.
- Develop, Sell, Build. Can you rearrange the order from the typical process of develop, build, sell? If you can sell and receive payment before you build, you can finance the production by sales revenue. This is what a growing number of entrepreneurs do for their projects with www.kickstarter.com and www.indiegogo.com But it does not end there. Tesla Motors, the hot electric car company, sold and got full pre-payment for 100s of cars. They used this to fund the development and production effort. You can too! What is the advantage you provide to early buyers?
- Components & Pieces. Does one component of your product have value on its own, without the complete system? Perhaps you don’t have to wait to generate some revenue until you have the complete system. Is there one piece which is a Minimum Viable Product (MVP in the words of Steven Blank)? Bring the MVP to market, get feedback, generate some revenue, and validate your market.
- Competitions. Businesses young and old can find competitions that will push your innovation forward with a purpose. There can be cash prizes and other valuable services made available to winners. What competitions can you enter? Sign up at iStart to receive notice of competitions. Seek out other websites that can keep you informed. For example, Radish Systems applied to the CSU Blue Ocean Enterprise Challenge. Out of 120 growing businesses that applied, only 16 were selected for the Enterprise Track competition which has a $250,000 grand prize. Radish is one of them! Come see the pitch day at the Venture Fest on May 24, 2014 in Fort Collins, CO. Learn more at http://blueoceanchallenge.com/
Summary. Be on the look out for Dakin’s book, coming soon, for the rest of his valuable tips. Go to www.SeedCapital2-0.com and sign up for Karl Dakin’s blog. In the meantime, get creative. Believe anything is possible. Take action now to be a bigger part of your firm’s revenue scene.
Theresa Szczurek (www.PursuitofPassionatePurpose.com, www.TMSworld.com, www.RadishSystems.com)